Omni Techs., LLC v. Know Ink, LLC
| Decision Date | 02 September 2020 |
| Docket Number | CIVIL ACTION 20-0175-WS-B |
| Parties | OMNI TECHNOLOGIES, LLC, Plaintiff, v. KNOW INK, LLC, Defendant. |
| Court | U.S. District Court — Southern District of Alabama |
This matter comes before the Court on defendant Know Ink, LLC's Motion to Dismiss or in the Alternative to Transfer Venue (doc. 10). The Motion has been briefed and is now ripe for disposition.
Plaintiff, Omni Technologies, LLC, brought this action in this District Court against defendant, Know Ink, LLC.1 The dispute arises from a commercial relationship between the parties, as memorialized in a series of contracts. Pursuant to the first of those agreements, entered into on July 21, 2015, Omni was designated the sole distributor of Know Ink's electronic poll books, known as "Poll Pads," for the states of Alabama and Mississippi, with the exclusive right to market, promote and solicit sales of Poll Pads in those territories. (Doc. 1, ¶ 6.) Aftersome disagreement emerged, the parties renegotiated their agreements and entered into a new Distributor Agreement (the "Contract") on March 31, 2017. (Id., ¶ 9.)2
By the express terms of the Contract, "KNOW iNK hereby appoints and grants [Omni] the exclusive and non-assignable right to market, promote and solicit orders on behalf of KNOW iNK" in the designated "Distributor Territory" of "State of Alabama and all counties therein." (Doc. 1, Exh. B, Art. II, § 1 & Exh. B.) The Contract further provided that Know Ink would provide certain specified compensation to Omni for these distributor services, in the form of commissions in prescribed amounts and percentages. (Id., Art. II § 4 & Exh. D.) The Contract was for a term of three years, subject to prior termination "with cause" as defined in the Contract. (Id., Art. VIII, § 3.) In the event of termination, the Contract specified that "the parties shall not be relieved of ... its [sic] obligation to pay any monies due, or to become due, as of or after the date of termination." (Id., Art. VIII, § 4.) On its face, the Contract "shall be governed by the laws of the State of Missouri." (Id., Art. X, § 5.)
According to the well-pleaded factual allegations of the Complaint, which are taken as true for purposes of defendant's Rule 12(b)(6) Motion,3 as of September 1, 2017, nine Alabama counties had purchased Know Ink's Poll Pads, but Know Ink attempted to divert credit for those sales away from Omni "in an effort to circumvent the parties' compensation agreement." (Doc. 1, ¶ 11.) The Complaint goes on to allege that on April 2, 2018, Know Ink transmitted to Omni a "Notice to Cure Breach of Contract and Demand for Compliance with Distributor Responsibilities," itemizing eight alleged failures by Omni that were "generic in nature" anddemanding compliance by Omni within 30 days. (Id., ¶¶ 12-13.)4 The Complaint further alleges that Omni responded to the Notice within two weeks, but "was unable to determine the exact nature of Know Ink's complaint or resolve the conflict." (Id., ¶ 14.) Omni specifically pleads that it "fulfilled its obligations at its own time and expense," but that Know Ink breached the Contract by failing to pay Omni commissions owed on sales to 13 counties and denying Omni the opportunity to provide technical support to those counties. (Id., ¶¶ 15, 19.)
Based on these alleged facts and circumstances, Omni asserts a string of purely state-law claims against Know Ink, including causes of action for breach of contract, bad faith, conversion, unjust enrichment, and open account. To the extent that any portion of Omni's Complaint may survive Rule 12(b)(6) scrutiny, Know Ink requests that venue be transferred to the United States District Court for the Eastern District of Missouri under 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses, in the interests of justice. Omni opposes all relief sought in defendant's Motion.
Defendant's Motion to Dismiss argues that each of the five claims asserted in the Complaint fails to state a claim upon which relief can be granted because it is inadequately pleaded. To satisfy Rules 8(a) and 12(b)(6), Fed.R.Civ.P., a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face," so as to "nudge[] [its] claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009) (citation omitted). "This necessarily requires that a plaintiff include factual allegations for each essential element of his or her claim." GeorgiaCarry.Org, Inc. v. Georgia, 687 F.3d 1244, 1254 (11th Cir. 2012). Thus, minimum pleading standards "require[] more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. As the Eleventh Circuit has explained, Twombly / Iqbal principles require that a complaint's allegations be "enough to raise a right to relief above the speculative level." Speaker v. U.S. Dep't of Health and Human Services Centers for Disease Control and Prevention, 623 F.3d 1371, 380 (11th Cir. 2010) (citations omitted). "To survive a 12(b)(6) motion to dismiss, the complaint does not need detailed factual allegations, ... but must give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Randall v. Scott, 610 F.3d 701, 705 (11th Cir. 2010) (citations and internal quotation marks omitted).
In Count 1 of the Complaint, Omni asserts a common-law claim against Know Ink for breach of contract, on the ground that "Know Ink has breached the contract by failing to remit payment as agreed and denying Omni's participation in the sales." (Doc. 1, ¶ 19.) Defendant now argues that dismissal of Count 1 is appropriate because the Complaint does not properly plead the elements of a breach of contract claim under Missouri law.5
To be cognizable under Missouri law, a breach of contract claim requires a showing "that plaintiff performed or tendered performance pursuant to the contract." Jennings v. SSM Health Care St. Louis, 355 S.W.3d 526, 531 (Mo.App. E.D. 2011); see also Williams v. Medalist Golf, Inc., 910 F.3d 1041, 1045 (8th Cir. 2018) () (citation and internal marks omitted). Know Ink argues that the Complaint lacks factual allegations to support the performance element, inasmuch as Omni's pleading concedes that Know Ink sent it multiple notices of breach and that the parties never resolved that issue. On that basis, Know Ink reasons, "it is reasonable to infer that Plaintiff did not perform pursuant to the Contract, as required in order to state a claim for breach of contract." (Doc. 11, PageID.64.)
The Court disagrees. Defendant's argument overlooks the Complaint's specific allegation that "Omni fulfilled its obligations" under the Contract. On its face, that allegation supports a reasonable inference that Omni performed pursuant to the Contract. Additionally, Know Ink's rather contorted construction of the factual allegations relating to the "Notice to Cure Breach of Contract" - and specifically its assertion that those allegations support a reasonable inference of non-performance - would turn the applicable Rule 12(b)(6) standard on its head. For purposes of this Motion, the Court draws all reasonable inferences in the plaintiff's favor, not the defendant's. See, e.g., Carruth v. Bentley, 942 F.3d 1047, 1053 (11th Cir. 2019) (). For the reasons already stated, the Complaint plainly supports a reasonable inference that Omni did perform under the Contract; therefore, Omni's pleading of Count 1 is not fatally defective in the manner asserted by Know Ink, and dismissal on that basis is inappropriate.6
In Count 2 of the Complaint, Omni asserts a claim labeled "bad faith." From the specific allegations of that count, however, it is difficult to discern the precise theory under which plaintiff is traveling. In one paragraph, Omni alleges that "Know Ink's acts and omissions amounted to the tort of bad faith." (Doc. 1, ¶ 22.) In another, Omni cites "Know Ink's breach of its duty of good faith and fair dealing." (Id., ¶ 24.)
In seeking dismissal of Count 2, Know Ink insists that "Missouri law does not recognize 'bad faith' as an independent tort," at least outside the insurance context. (Doc. 23, PageID.141.) Omni does not identify any authority suggesting that there exists a tort of bad faith under Missouri law in the absence of a bad-faith refusal to settle by an insurance company. Nonetheless, in response to the Rule 12(b)(6) Motion, Omni explains that "[i]t is the breach of the covenant of good faith and fair dealing that gives rise to the bad faith claim Plaintiff makes here." (Doc. 20, PageID.128.) Clearly, Missouri law does authorize a claim for breach of the covenant of good faith and fair dealing. See, e.g., Bishop & Associates, LLC v. Ameren Corp., 520 S.W.3d 463, 471 (Mo. 2017) (). Know Ink does not argue otherwise.7
Under these circumstances, the Motion to Dismiss is granted insofar as Count 2 brings a claim for the "tort of bad faith," but is...
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