Simple Helix, LLC v. Relus Techs.
| Decision Date | 17 December 2020 |
| Docket Number | Case No. 5:20-cv-00453-HNJ |
| Parties | SIMPLE HELIX, LLC, Plaintiff, v. RELUS TECHNOLOGIES, LLC, and WELLS FARGO BANK, N.A., Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
On October 8, 2020, this court entered a memorandum opinion and order granting Defendant Relus Technologies, LLC's Motion to Dismiss and dismissing all claims against Relus Technologies, LLC ("Relus"). (Doc. 27).1 On October 14, 2020, Simple Helix filed a Motion for Leave to File an Amended Complaint Under Federal Rule of Civil Procedure 15 to reassert account stated and breach-of-contract claims against Relus. (Doc. 28).
Like its original contractual claims, Simple Helix's new account stated and breach-of-contract claims arise from the allegedly fraudulent conduct of Steve Shickles, its former corporate officer, to procure from Relus a $501,207 wire transfer to Shickles'spersonal bank account. For the reasons discussed herein, the court concludes Simple Helix's proposed account stated and breach-of-contract claims suffer the same deficiencies that precluded these claims as originally pleaded. In particular, agency and equitable principles foreclose Simple Helix from plausibly alleging that Relus breached a contractual duty to furnish Simple Helix the $501,207 sum. The court therefore denies Simple Helix's Motion for Leave to File an Amended Complaint Under Federal Rule of Civil Procedure 15.
Simple Helix's original Complaint asserted claims against Relus for open account ("Count 1"), account stated ("Count 2"), money paid by mistake ("Count 3"), conversion ("Count 4"), money had and received ("Count 6"), and breach of contract ("Count 8"). (Doc. 1-1). As referenced previously, Simple Helix's claims arose from Shickles's dealings with Relus, which culminated in Relus transferring $501,207 to Shickles's personal bank account. The court recounts the relevant factual background of Simple Helix's claims as described in its October 8, 2020, memorandum opinion and order.
On or about May 26, 2017, Shickles initiated a $656,358 wire transfer from Simple Helix's FirstBank account to Relus's bank account. (Id. ¶ 12). The $656,358 transfer represented a $501,207 overpayment to Relus, as Simple Helix owed Relus only$155,151 for materials, supplies, and services. (Id. ¶ 39). On May 31, 2017, Shickles emailed Relus employee Brian Eith from the fictitious email account "belinda.finley@simplehelix.com"2 to request a refund of the $501,207 overpayment. (Id. ¶ 13, 14). Impersonating Finley, Shickles wrote:
(Doc. 16-1 at 2).3 The account number Shickles provided corresponded to hispersonal bank account at Wells Fargo. (Doc. 1-1 ¶ 14).
Eith forwarded Shickles's email to Relus's Chief Operating Officer Scott Luce and confirmed the $501,207 overpayment as "correct." (Doc. 16-1 at 2). Eith further stated: "The rest [$155,151] will cover the Ciena/Juniper order." (Id.) Thereafter, Luce replied to Shickles:
(Id. at 1).
Shickles either instructed his administrative assistant Victoria Schulze to use her email account, "victoria.schulze@simplehelix.com", or himself used Schulze's email account, to reply to Luce: "That is confirmed." (Id.) The confirmation email sent from Schulze's account copied Shickles via his Simple Helix email account, "steve@simplehelix.com." (Id.) Thereafter, Relus refunded the $501,207 overpayment to Shickles's personal Wells Fargo bank account via a wire transfer. (Doc. 1-1 ¶ 17).
In its October 8, 2020, memorandum opinion and order, this court held Simple Helix did not state plausible account stated or breach-of-contract claims against Relus. The court assessed the account stated and breach-of-contract claims concurrently pursuant to the account stated paradigm, as both claims concerned an agreement or promise by Relus to refund the $501,207 sum Simple Helix overpaid for materials, supplies, and services. The court concluded Relus discharged any contractual duty to refund Simple Helix the $501,207 overpayment. Specifically, Simple Helix's allegations established that Shickles, acting as Simple Helix's agent, bound Simple Helix to his refund instructions, and, therewith, bound Simple Helix to the $501,207 wire transfer he procured from Relus.
Critically, Simple Helix irrefutably established that Shickles possessed either the implied or apparent authority to request Relus refund the $501,207 overpayment pursuant to his instructions, and, therewith, bind Simple Helix to Relus's wire transfer. Simple Helix alleged "it overpaid Relus by $501,207.00", (doc. 1-1 ¶ 63) (emphasisadded), and it "rendered the statement of the account to Relus in the form of an email request for a refund of the overpaid amount." (Doc. 1-1 ¶ 36). Simple Helix thus imputed Shickles's overpayment and refund request to itself, and, by extension, tacitly averred that Shickles retained sufficient agency authority to contract and bind Simple Helix to these acts. Therefore, pursuant to its own allegations, Shickles's acts and representations were attributable to Simple Helix. Concomitantly, Relus transferred the $501,207 to Shickles's personal bank account pursuant to the email request from Simple Helix (via Shickles's agency authority), and, therewith, discharged its duty to refund Simple Helix the $501,207 overpayment.
Further, the equitable estoppel doctrine foreclosed Simple Helix's contention it formed a binding contract with Relus via Shickles's refund request and wiring instructions, yet was not bound by the $501,207 wire transfer Relus furnished pursuant to such instructions. To wit, because Relus detrimentally relied upon Shickles's misrepresentations, and Simple Helix enabled Shickles's misconduct by appointing him CEO and failing to "discover[] [his] scheme", (doc. 1-1 ¶ 26), Simple Helix - rather than Relus - should, in equity, bear the loss of Shickles's deceit. (Doc. 27 at 53-59).
Finally, the court rejected Simple Helix's passing request in its response brief to amend its Complaint to replead its contractual claims. However, the court nonetheless suggested Simple Helix could seek leave to amend its Complaint pursuant to Federal Rule of Civil Procedure 15, for the purpose of "presenting well-pleaded avermentsportraying Relus's nonperformance of a contractual duty."4 (Id. at 59).
Simple Helix proposes to file an Amended Complaint that would aver new account stated and breach-of-contract claims against Relus based upon the afore-described $501,207 wire transfer. The account stated claim ("Count I") asserts that Simple Helix "paid Relus $501,207.00 more than was due on its account." (Doc. 28-1 ¶ 23). Simple Helix alleges that "[u]pon being alerted of the overpayment, Relus acknowledged the overpayment and the amount of $501,207.00 to be refunded to Simple Helix." (Id. ¶ 24). Simple Helix avers that "[w]hile Relus attempted to resolve the stated account, it failed to act in a reasonable manner, and, instead of resolving the account by sending to Simple Helix the $501,2017.00 it was owed, Relus wired the money to an account at a bank [Wells Fargo] that it knew, or had reason to know did not belong to Simple Helix." (Id. ¶ 26).
Likewise, Simple Helix's proposed breach-of-contract claim ("Count II") alleges the "[p]arties' conduct, actions, and course of dealing" engendered a contract whereby "Relus [would] provide materials, supplies, and services to [Simple Helix], and [Simple Helix] would timely pay Relus the purchase price." (Id. ¶ 29). Simple Helix avers "itoverpaid Relus by $501,207.00", (id. ¶ 30), and maintains that because "Relus never provided any additional materials, supplies, or services that would entitle Relus to retain any portion of the $501,207.00 overpayment", Relus incurred an obligation to refund Simple Helix the $501,207 overpayment. (Id. ¶¶ 31-32). Simple Helix alleges "Relus breached its contractual obligation to refund the money to Simple Helix by ignoring the apparent signs of fraud by Shickles and sending the money belonging to Simple Helix to an account at a bank [Wells Fargo] that it knew, or had reason to know, did not belong to Simple Helix." (Id. ¶ 33).
Simple Helix requests "compensatory damages, interest, attorneys' fees, costs, and all other just and proper relief" for its account stated and breach-of-contract claims. (Id. ¶¶ 27, 34).
Pursuant to Federal Rule of Civil Procedure 15(a), a court should "freely give leave [to amend a complaint] when justice so requires." Fed. R. Civ. P. 15(a)(2).
"In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. — the leave sought should as the rules require be 'freely given.'" Loggerhead Turtle v. County Council of Volusia County, Florida, 148 F.3d 1231, 1255 (11th Cir. 1998) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962)).
Brown v. Williamson, 134 F. Supp. 2d 1286, 1288 (M.D. Ala. 2001).
However, "a district court may properly deny leave to amend the complaint under Rule 15(a) when such amendment would be futile." Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1262-63 (11th Cir. 2004...
To continue reading
Request your trial