Selby v. Schroeder

• Decision Date: 01 March 2021
• Docket Number: NO. 2:20-cv-00016,2:20-cv-00016
• Citation: 522 F.Supp.3d 388
• Parties: Becky A. SELBY, Plaintiff, v. Holly T. SCHROEDER, Defendant.
• Court: U.S. District Court — Middle District of Tennessee

522 F.Supp.3d 388

Becky A. SELBY, Plaintiff,

v.Holly T. SCHROEDER, Defendant.

NO. 2:20-cv-00016

United States District Court, M.D. Tennessee, Northeastern Division.

Filed March 1, 2021

Stephen S. Werner, Scaringi Law, Harrisburg, PA, Benjamin M. Rose, RoseFirm, PLLC, Brentwood, TN, James K. Simms, IV, Thompson Burton PLLC, Franklin, TN, for Plaintiff.

Michael D. Reed, Veronica L. Morrison, Mette Evans & Woodside, Harrisburg, PA, Vincent H. Peppe, Attorney at Law, Nashville, TN, for Defendant.

MEMORANDUM OPINION

WAVERLY D. CRENSHAW, JR., CHIEF UNITED STATES DISTRICT JUDGE

This case arises from a contract dispute over a blind horse named Niko. Before the Court is Defendant Holly T. Schroeder's Motion to Dismiss (Doc. No. 30). Schroeder originally filed the Motion in the Middle District of Pennsylvania. After the case was transferred to this Court to cure jurisdictional defects (Doc. Nos. 43, 50), this Court renewed the Motion and ordered supplemental briefing. (Doc. No. 83). Those briefs have now been filed, including: (1) Schroeder's Revised Memorandum in Support of Her Motion to Dismiss (Doc. No. 74); (2) Plaintiff Becky A. Selby's ("Selby") Response in Opposition (Doc. No. 87); and (3) Schroeder's Reply (Doc. No. 88). For the reasons that follow, the Motion will be granted in part and denied in part.

I. BACKGROUND AND FACTUAL ALLEGATIONS¹

Niko, the blind horse, is now ten years old. (Doc. No. 26 ¶ 11). Schroeder, a professional horse breeder, owned Niko but found the prospect of caring for her and her disability to be prohibitively expensive. (Id. ¶¶ 9(a), 20). A veterinarian that worked with Schroeder lamented that the only reasonable option was to "put [Niko] down" because of her blindness. (Id. ). However, Schroeder wanted Niko to be well-cared for, and so she instead offered the horse for sale on social media. (Id. ¶¶ 15, 20).

Schroeder and Selby entered into an oral contract for the transfer of Niko in October 2017. (Id. ¶ 11). Because Selby could not pay the $1,000 asking price for Niko, the parties agreed that Selby would obtain ownership subject to certain conditions. (Id. ¶ 18). As consideration, Selby agreed to care for Niko for the rest of her life and provide the horse's first-born healthy foal to Schroeder. (Id. ¶ 17). Schroeder would then transfer Niko's official registration under Selby's name. (Id. ¶¶ 19, 21). The parties negotiated remotely, as Schroeder lived in Tennessee and Selby resided in Pennsylvania. (Id. ¶¶ 8–9, 15). On a pre-arranged date, Selby drove from Pennsylvania to Kentucky, where Schroeder's veterinarian housed Niko. (Id. at ¶ 24). Selby picked up Niko and promptly returned to Pennsylvania to care for her pursuant to the parties' agreement. (Id. ).

As Niko neared the end of gestation for her first-born foal, Schroeder allegedly reneged and requested conditions that differed from those in the parties' original agreement. (Id. ¶ 25). Among the differing conditions, Schroeder now wanted: 1) all of Niko's offspring, not just the first-born foal; and 2) Selby to continue to care for Niko without any transfer of ownership rights or official registration. (Id. ¶¶ 24-25). Thus, despite the parties' original agreement, Schroeder has not yet authorized the Tennessee Walking Horse Breeders and Exhibitors Association ("TWHBEA") to transfer Niko's registration to Selby. (Id. ¶¶ 13, 38, 43(a)). Instead, Schroeder filed a police report with the Warren County, Kentucky Sheriff's Office claiming that Selby stole Niko. (Id. ¶¶ 39–40). On January 9, 2019, a sherriff's deputy called Selby to inform her of the police report; however, the case was not pursued further. (Id. ¶ 39).

Based on the foregoing, Selby brings four counts against Schroeder: (1) breach of contract, (2) fraud, (3) malicious prosecution, and (4) defamation.² (Id. ¶ 44). Schroeder now moves to dismiss each claim. (Doc. No. 30). Schroeder also moves to dismiss under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. The Court will address each argument in turn.

II. LEGAL STANDARD

In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must look to the Amended Complaint, accept all of its factual allegations as true, draw all reasonable inferences in the plaintiff's favor, and "take all of those facts and inferences and determine whether they plausibly give rise to an entitlement to relief." Doe v. Baum, 903 F.3d 575, 581 (6th Cir. 2018) ; see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The Plaintiff need only provide "a short and plain statement of the claim" that gives "the defendant fair notice of" the claims brought against her. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must provide enough factual allegations "to raise a right to relief above the speculative level," id., but the Court does not weigh whether the plaintiff will ultimately prevail. Id. at 563 n.8, 127 S.Ct. 1955 (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ). The Amended Complaint must contain "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft, 556 U.S. at 678–79, 129 S.Ct. 1937.

III. SCOPE OF THE RECORD PROPERLY BEFORE THE COURT ON A MOTION TO DISMISS

As a preliminary matter, the Court must first resolve a dispute over the scope of the record at this stage of litigation. Each party attaches to her briefs exhibits that the other opposes as being outside the proper scope of a motion to dismiss. "As a general rule, a court cannot consider matters outside the four corners of the complaint when ruling on a motion to dismiss under Rule 12(b)(6)." Clark v. Walt Disney Co., 642 F. Supp. 2d 775, 781 (S.D. Ohio 2009). However, there are exceptions to this rule: "[d]ocuments attached to the motion to dismiss briefing may be considered part of the pleadings if they were incorporated into the complaint by reference and are central to the plaintiff's claim." Blanch v. Trans Union, LLC, 333 F. Supp. 3d 789, 791–92 (M.D. Tenn. 2018) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ).

Schroeder appends two exhibits to her motion that are neither referred to in the Amended Complaint, nor central to Plaintiff's claims. Those exhibits are: (1) a typed version of what she represents as reflecting a proposed and unsigned written contract following the parties' verbal agreement (Doc. No. 74-1); and (2) an affidavit showing that her understanding of the terms of the "arrangement" between her and Selby differed from the originally agreed-upon terms. (Doc. No. 74-2). Neither exhibit is appropriately considered on a motion to dismiss. First, Schroeder's written "contract" was never binding on the parties, as it was neither signed nor agreed to, let alone even seen by Selby. Nor is it referenced in the pleadings or central to Selby's claims.

Blanch, 333 F. Supp. 3d at 791–92. Second, Schroeder's affidavit is an improper attempt to squeeze a dispute of material fact into a motion to dismiss. Whether the parties had a meeting of the minds is a question for the factfinder or belongs in a summary judgment motion, not a motion to dismiss. See Flint v. Mercy Health Regional Medical Center, LLC, No. 1:19-CV-610, 2019 WL 6270916, at *3 n. 3 (N.D. Ohio Nov. 25, 2019) (citing Financial Resources Network, Inc. v. Brown & Brown, Inc., 754 F. Supp. 2d 128, 155 (D. Mass. 2010) ("A motion to dismiss addresses the plausibility of the claims in the complaint and assumes facts therein as true whereas a motion for summary judgment addresses whether genuine issues of material fact exist to support the claims. A different factual record and different standard of review govern summary judgment motions.")). And given that this case is still in the early stages of discovery, the Court will decline Selby's invitation to convert Schroeder's motion into a Motion for Summary Judgment under Fed. R. Civ. P. 12(d). (See Doc. No. 87 at 9).

Schroeder also argues that the Court should not consider a police report prepared by the Warren County, Kentucky Sheriff's Office, which is attached to Selby's response to the motion to dismiss (Doc. Nos. 87-1; 88 at 1). But unlike the exhibits discussed above, the police report is explicitly referenced in the Amended Complaint and is central to an allegation that underlies the defamation and malicious prosecution claims. (Doc. No. 26 ¶¶ 39–41, 44(b), 44(d)). Therefore, the Court concludes it is permissible to consider the police report as an exhibit on this Motion to Dismiss without converting it to a Motion for Summary Judgment. See Blanch, 333 F. Supp. 3d at 791–92. The Court notes, however, that it need not consider what is written in the police report because the mere fact it was filed and referenced in the Complaint is enough to appropriately analyze Selby's defamation and malicious prosecution claims. The Court will now undertake a choice of law analysis and examine each of Selby's claims.

IV. ANALYSIS

A. Applicable Principles to the Choice of Law

Because the Court has jurisdiction over this case based solely on diversity of citizenship between the parties, it must first decide what state's laws to apply to each claim. Typically, "[a] federal court exercising its diversity jurisdiction must apply the choice-of-law rules of the state in which it is located." Yang Ming Marine Transport Corp. v. Intermodal Cartage Co., Inc., 685 F. Supp. 2d 771, 779 (W.D. Tenn. 2010). There is a wrinkle here, however, because the case originated in the Middle District of Pennsylvania, which then transferred the action to this Court under 28 U.S.C. § 1631 for "want of jurisdiction." (Doc. No. 50). Because the transfer cured a jurisdictional defect, "...