Tammy Cooper, Cross Over Therapy, LLC v. Primary Care Solutions, Inc.

• Decision Date: 11 October 2017
• Docket Number: CIVIL ACTION NO. 16-259-EWD (CONSENT)
• Parties: TAMMY COOPER, CROSS OVER THERAPY, LLC AND KENDALL "KEN" BROWN v. PRIMARY CARE SOLUTIONS, INC., WILLIAM BULLOCK, MONICA LEWIS, AND KIM ROUNDTREE
• Court: U.S. District Court — Middle District of Louisiana

TAMMY COOPER, CROSS OVER THERAPY, LLC AND KENDALL "KEN" BROWN v. PRIMARY CARE SOLUTIONS, INC., WILLIAM BULLOCK, MONICA LEWIS, AND KIM ROUNDTREE

CIVIL ACTION NO. 16-259-EWD (CONSENT)

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

October 11, 2017

RULING AND ORDER ON MOTION TO DISMISS UNDER FRCP 12(B)(2) AND 12(B)(6)

Before the court is a Motion to Dismiss Under FRCP Rule 12(b)(2) and 12(b)(6) (the "Motion to Dismiss"), filed by defendants, Primary Care Solutions, Inc. ("PCS"), William Bullock ("Bullock"), Monica Lewis ("Lewis"), and Kim Roundtree ("Roundtree") (collectively PCS, Bullock, Lewis and Roundtree are "Defendants" and Bullock, Lewis, and Roundtree are the "Individual Defendants").¹ The Motion is opposed.² For the reasons that follow, IT IS HEREBY ORDERED that the Motion to Dismiss is GRANTED IN PART AND DENIED IN PART.

I. Factual and Procedural Background

Tammy Cooper ("Cooper"), Cross Over Therapy, LLC ("COT"), and Kendall Brown ("Brown") (collectively Cooper, COT and Brown are "Plaintiffs"), filed their original Complaint on April 22, 2016. The case arises from contractual relationships between Cooper and PCS and Brown and PCS. Specifically, in April 2014, Cooper executed a Site Director Consultant Agreement with PCS whereby Cooper was to serve as a Site Director in Donaldsonville,Louisiana.³ Brown executed a Site Director Consultant Agreement with PCS in July 2014, whereby he was to serve as a Site Director in St. Francisville, Louisiana.⁴ Plaintiffs allege that PCS, "through its alter egos and corporate officers, William Bullock, Monica Lewis and Kim Roundtree, devised an unethical, oppressive, unscrupulous scheme that offends established public policy that amounts to fraud, deceit, and misrepresentation" by soliciting Cooper and Brown to invest in "a purported franchise investment scheme without following federal or Louisiana franchising or security laws"⁵ and that PCS ultimately sold the offices established by Cooper and Brown to Seaside HCBS, LLC ("Seaside") without paying Plaintiffs a percentage of the profits derived from the sale.⁶

On March 21, 2017, Defendants' motion to dismiss the original Complaint was granted in part and denied in part.⁷ In that ruling, Plaintiffs' claims against the Individual Defendants were dismissed for lack of personal jurisdiction.⁸ Additionally, Plaintiffs' claims against the Defendants under the Louisiana Unfair Trade Practices Act ("LUTPA"), the Federal Trade Commission Act, Louisiana Securities Law, and the Fair Labor Standards Act ("FLSA") were dismissed, and Plaintiffs' claims for breach of contract, interference with contract, and conversion against theIndividual Defendants were dismissed.⁹ Plaintiffs were granted leave to file an amended complaint, and on April 11, 2017, Plaintiffs timely filed a First Supplemental and Amending Complaint (the "Amending Complaint") to address, inter alia, the substantive deficiencies noted in the court's March 21, 2107 ruling.¹⁰

On May 10, 2017, Defendants filed the instant Motion to Dismiss.¹¹ The Motion to Dismiss seeks dismissal of Plaintiffs' claims against the Individual Defendants for lack of personal jurisdiction, and also seeks dismissal of Plaintiffs' claims against all Defendants under LUTPA, FLSA, for conversion, and for unjust enrichment. Additionally, the Motion to Dismiss seeks dismissal of Plaintiffs' claims for breach of contract and interference with contract against the Individual Defendants.

II. Law and Analysis

A. Personal Jurisdiction Over the Individual Defendants

Fed. R. Civ. P. 12(b)(2) authorizes dismissal of an action where the court lacks personal jurisdiction over a defendant. "Where a defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists." Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v. Laplan, 686 F.2d 276, 280 (5th Cir. 1982)). When, as in this case, a court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction. Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008) (quoting Buillion v. Gillepsie, 895 F.2d 213, 217 (5th Cir. 1990) (citations omitted)). "Moreover, on a motion to dismiss for lack of jurisdiction, uncontrovertedallegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor for purposes of determining whether a prima facie case for personal jurisdiction exists." Id. ("Proof by preponderance of the evidence is not required."). However, in assessing whether the plaintiff has presented a prima facie case of personal jurisdiction, the court "will not 'credit conclusory allegations, even if uncontroverted.'" Sealed Appellant 1 v. Sealed Appellee 1, 625 Fed. Appx. 628, 631 (5th Cir. 2015) (quoting Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001)). The court may consider "affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery." Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002) (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985)). "[A]ll uncontroverted allegations are taken as true and fact conflicts are resolved in the plaintiff's favor." General Retail Services, Inc. v. Wireless Toyz Franchise, LLC, 255 Fed. Appx. 775, 792 (5th Cir. 2007).

"A nonresident defendant's contacts may support either specific or general jurisdiction." Service Steel Warehouse, Co. L.P. v. Eakin, Civil Action No. 10-151, 2011 WL 3439132, at * 2 (M.D. La. Aug. 5, 2011). "Specific jurisdiction over a nonresident defendant is present where the 'suit arises out of or [is] related to the defendant's contacts with the forum....'" Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984); Clemens v. McNamee, 615 F.3d 374, 378-379 (5th Cir. 2010) (stating that "[s]pecific jurisdiction ... requires a sufficient nexus between the nonresident's contacts with the forum and the cause of action")). "Alternatively, general jurisdiction exists 'when a nonresident defendant's contacts with the forumare substantial, continuous, and systematic.'" Id. (citing Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008)).¹²

The Fifth Circuit has set forth a three-step analysis for specific personal jurisdiction, whereby the court considers:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Nuovo Pignone, SpA v. Storman Asia M/V, 310 F.3d 374, 378 (5th Cir. 2002) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)). "A defendant has minimum contacts with a forum state if 'the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." Burger King, 471 U.S. at 474. "Even where a defendant has no physical presence in the forum state, a single purposeful contact is sufficient to confer personal jurisdiction if the cause of action arises from the contact." Nuovo Pignone, 310 F.3d at 379. "Once a plaintiff establishes minimum contacts between the defendant and the forum state, the burden of proof shifts to the defendant to show that the assertion of jurisdiction is unfair and unreasonable." Id. (citing Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir.1999)).

In their Amending Complaint,¹³ Plaintiffs allege that William Bullock is the president of PCS, Monica Lewis is a "director, consultant and managing partner of PCS," and Kim Roundtreeis a director of PCS.¹⁴ Plaintiffs allege the Individual Defendants and PCS recruited them by "offering them an opportunity to invest in Primary Care Solutions, Inc. and start their own satellite agency offices that promised to pay 40% of the profits monthly after a $25,000 sweat equity investment."¹⁵ Plaintiffs assert that "[i]n approximately March or April 2014, during a presentation meeting at the Baton Rouge office of PCS, Kendall 'Ken' Brown and others were told by William Bullock, Kim Roundtree, and Monica Lewis that the company had decided to franchise Primary Care Solutions"¹⁶ and that "PCS through its alter ego, President, William Bullock and alter egos directors, Monica Lewis and Kim Roundtree came to Baton Rouge Louisiana in March and April 2014 and convinced Tammy Cooper an employee of PCS in the Baton Rouge [sic] through fraudulent misrepresentations discussed above to sign a sham contract that contained an invalid non-compete clauses [sic]...."¹⁷ With respect to Mr. Brown, Plaintiffs allege that

In April 2014 after the presentation meeting where the PCS franchise plan was introduce [sic], Ken Brown was introduce [sic]by Kim Roundtree and Monica Lewis to a man known as Keil who would be moving to Louisiana to open a franchise in St. Francisville and asked Ken Brown to assist him to find a site; then later told him that Keil had changed his mind and on July 25, 2014 Kim Roundtree and Monica Lewis returned to the Baton Rouge office and told Ken Brown, a PCS employee, that because the deal with Keil had fallen through that they wanted to offer him the opportunity to start the St. Francisville office as his own and that he could either purchase the office with upfront cash or that he could obtain the franchise for the St. Francisville office through the plan to put up $25,000.00 in sweat equity.¹⁸

Plaintiffs allege that the Individual Defendants solicited them to invest in "a purported...