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Money Mailer, LLC v. Brewer

United States District Court, W.D. Washington, Seattle

April 23, 2018

MONEY MAILER, LLC, Plaintiff,
v.
WADE G. BREWER, Defendant. WADE G. BREWER, Counterclaim Plaintiff,
v.
MONEY MAILER, LLC, et al., Counterclaim Defendants.

          ORDER GRANTING IN PART MONEY MAILER'S MOTION TO DISMISS COUNTER/CROSS-CLAIMS AND GRANTING LEAVE TO AMEND

          ROBERT S. LASNIK UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on “Counterclaim Defendants' Partial Motion to Dismiss.” Dkt. # 140. On July 31, 2015, Money Mailer, LLC (“MMLLC”), sued Wade Brewer for breach of contract and monies owed. Brewer was a former franchisee of Money Mailer Franchise Corporation (“MMFC”), a company that shares owners, officers, and directors with MMLLC. As part of the Franchise Agreement, Brewer was required to purchase goods and service from MMLLC, an arrangement which resulted in the debt that MMLLC is attempting to collect in this lawsuit. Brewer suspected that MMLLC and MMFC had colluded to mark up charges for printing and other services without adequate disclosure and filed counter/cross claims against the two companies on September 17, 2015. Two years later, Brewer filed an unopposed motion to amend his answer to assert crossclaims against four individual owners, officers, and/or directors of MMFC and MMLLC. The amended answer was filed on December 11, 2017. All counter/crossclaim defendants have taken the opportunity to file a motion to dismiss.[1]

         MMLLC, MMFC, and the individual crossclaim defendants (collectively, Money Mailer) seek dismissal of most of the claims against them, arguing that the claims are barred by the statutes of limitations and/or are inadequately pled. The question for the Court on a motion to dismiss is whether the facts alleged in the complaint sufficiently state a “plausible” ground for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

A claim is facially plausible when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Plausibility requires pleading facts, as opposed to conclusory allegations or the formulaic recitation of elements of a cause of action, and must rise above the mere conceivability or possibility of unlawful conduct that entitles the pleader to relief. Factual allegations must be enough to raise a right to relief above the speculative level. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Nor is it enough that the complaint is factually neutral; rather, it must be factually suggestive.

Somers v. Apple, Inc., 729 F.3d 953, 959-60 (9th Cir. 2013) (internal quotation marks and citations omitted). All well-pleaded factual allegations are presumed to be true, with all reasonable inferences drawn in favor of the non-moving party. In re Fitness Holdings Int'l, Inc., 714 F.3d 1141, 1144-45 (9th Cir. 2013). If the complaint fails to state a cognizable legal theory or fails to provide sufficient facts to support a claim, dismissal is appropriate. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010).

         Having reviewed the First Amended Answer, Affirmative Defenses, and Counterclaims (Dkt. # 139) and the memoranda submitted by the parties, [2] the Court finds as follows:

         A. Statutes of Limitation

         “The district court may grant a 12(b)(6) motion to dismiss on statute of limitations grounds only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled.” Morales v. City of Los Angeles, 214 F.3d 1151, 1153 (9th Cir. 2000) (internal quotation marks and citations omitted). Dismissal of the FIPA, CPA, misrepresentation, civil conspiracy, and/or unjust enrichment claims on limitations grounds is not appropriate here. Brewer has pled facts from which he can plausibly argue that, exercising reasonable diligence, he learned that Money Mailer had misrepresented facts regarding the sustainability of the large franchise model, had misrepresented its intentions regarding credits, buy backs, and/or debt forgiveness, and was overcharging for printing services (among other things)[3] long after the parties signed the Franchise Agreement in 2011 and within the applicable limitations periods. Brewer cannot be faulted for initially assuming that Money Mailer would follow the law. The allegations of the amended counter/crossclaims do not foreclose the possibility that the limitations periods were tolled.

         B. Declaratory Judgment

         To the extent Brewer's declaratory judgment cause of action simply seeks a declaration that Money Mailer is liable under other statutory or common law theories, it is duplicative and would serve no purpose in this litigation. However, Brewer also seeks a declaration regarding the validity and enforceability of the myriad agreements he negotiated with MMFC and/or MMLLC, including the Franchise Agreement. That relief is not necessarily duplicative of that which is available through the other causes of action and has the potential to resolve on-going disputes regarding Brewer's debts and the parties' obligations under those agreements. This cause of action will not be dismissed.

         C. Breach of the Franchise Agreement

         Brewer's sixth cause of action states that Money Mailer breached “the Franchise Agreement, amendments thereto, and related agreements.” Dkt. # 139 at ¶ 8.2. He has not, however, identified any provision of the Franchise Agreement that was breached. To the extent he is arguing that Money Mailer misrepresented the financial viability of the large franchise model or temporarily boosted the franchise's income to make it appear profitable and induce Brewer to sign the Franchise Agreement, those facts may give rise to other causes of action, but they do not establish a breach of the contract terms.

         Brewer has adequately alleged breaches of subsequent agreements modifying the initial arrangement between the parties, however, including agreements to work together as a team to resolve the problems Brewer was facing, promises to transfer zones, reduce Brewer's debt, and/or credit Brewer's account, and a management agreement.[4]

         D. ...


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