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NAC Foundation, LLC v. Jodoin

United States District Court, D. Nevada

March 7, 2017

NAC FOUNDATION, LLC, a Nevada limited liability company, Plaintiff,
v.
COREY JODOIN, Defendant.

          ORDER

          Gloria M. Navarro, Chief Judge

         Pending before the Court is the Motion to Dismiss (ECF No. 20) filed by Defendant Corey Jodoin (“Defendant”). Plaintiff NAC Foundation, LLC (“Plaintiff”) filed a Response. (ECF No. 21). Defendant did not file a Reply. For the reasons discussed below, Defendant's Motion to Dismiss is granted in part and denied in part.

         I. BACKGROUND

         This dispute arises from two agreements allegedly executed between Plaintiff and Defendant, including an agreement for Defendant to purchase an interest in Plaintiff and a mutual Non-Disclosure Agreement (“NDA”). (Compl. ¶¶ 9-10, ECF No. 1). Plaintiff is a Nevada company that supports the research and creation of digital currency. (Id. ¶ 6). In October 2015, Plaintiff allegedly first entered into an oral agreement whereby it would give Defendant five percent interest in Plaintiff in exchange for Defendant's payment of $500, 000. (Id. ¶¶ 9, 13). Then, in November 2015, the parties allegedly modified the oral agreement by handwriting additional stipulations (the “Modified Agreement”) to specify, inter alia, that Defendant and his wife would be appointed to officer positions in the company, would organize a conference on Plaintiff's behalf, and would conduct business dealings for Plaintiff. (Id. ¶ 13).

         On May 9, 2016, Plaintiff filed its Complaint in this Court, alleging the following causes of action: (1) breach of contract under two separate agreements, the Modified Agreement and the NDA; (2) breach of the covenant of good faith and fair dealing; (3) defamation; (4) intentional interference with contractual relations; (5) intentional interference with prospective economic advantage; and (6) aiding and abetting. These claims center around Plaintiff's allegations that Defendant failed to pay the balance owed on the Modified Agreement, along with Defendant and his wife defaming and disparaging Plaintiff to its customers using confidential information. (Id. ¶¶ 17, 19).

         After filing its Complaint, Plaintiff moved for a Temporary Restraining Order and Preliminary Injunction to prohibit Defendant from using Plaintiff's confidential information and contacting Plaintiff's customers and contractors for any purpose. (See ECF Nos. 5, 6). The Court granted both of Plaintiff's motions. (See ECF Nos. 7, 18). Defendant then filed the instant Motion to Dismiss, arguing that claim three of defamation is insufficiently pled, and all claims relying on it should be dismissed. (Mot. to Dismiss 2:3-4, ECF No. 20). Defendant also contends that claim one for breach of contract specifically relating to the Modified Agreement should be dismissed because the Complaint merely alleges the existence of a condition precedent rather than a valid contract. (See Id . 6:10-11).

         II. LEGAL STANDARD

         Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as a factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “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.” Id. This standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         “Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). “However, material which is properly submitted as part of the complaint may be considered.” Id. Similarly, “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). On a motion to dismiss, a court may also take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(d).

         If the court grants a motion to dismiss for failure to state a claim, leave to amend should be granted unless it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to Rule 15(a), the court should “freely” give leave to amend “when justice so requires, ” and in the absence of a 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 the amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962).

         III. DISCUSSION

         A. Claims Allegedly Relying on Defamation

         First, Defendant seeks dismissal of claims one, two, four, five, and six because these claims “hinge[ ] entirely on whether [Plaintiff] properly alleged a claim for defamation.” (Mot. to Dismiss 4:10-12). Defendant gives no argument as to any further deficiencies in the pleadings for these claims. Plaintiff responds that “Defendant conflates the phrase ‘for the purposes of disparaging and defaming [Plaintiff]' with a legal requirement that Plaintiff ‘establish a prima facie case of defamation' for all six Claims for Relief set forth by Plaintiff in the Complaint.” (Pl.'s Resp. 3:17-19, ECF No. 21).

         First, the Court agrees with Plaintiff that most of its claims are not dependent upon the sufficient pleading of defamation. Defamation is not an underlying element of claim one, breach of contract[1]; claim two, breach of the covenant of good faith and fair dealing[2]; claim four, intentional interference with contractual relations[3]; or claim five, interference with prospective economic advantage.[4] While facts regarding defamation may be relevant to these claims, the failure to properly plead defamation does not ...


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