United States District Court, D. Nevada
C. MAHAN, UNITED STATES DISTRICT JUDGE
before the court is third-party defendant Christopher
Rangel's (“Rangel”) motion to dismiss TS
Dynamic Corp.'s (“TS Dynamic”) third-party
complaint. (ECF No. 16). TS Dynamic filed a response (ECF No.
19), to which Rangel replied (ECF No. 23).
before the court is plaintiff/counter-defendants National
Outsourcing Services (“NOS”) and Nationwide
Outside Services Corp.'s motion to strike TS
Dynamic's claim for punitive damages. (ECF No. 17). TS
Dynamic filed a non-opposition response (ECF No. 20), to
which the counter-defendants replied (ECF No. 24).
case arises out of a series of contract disputes. (ECF No.
1). Rangel owns NOS, which engages in the business of
outsourcing employee management tasks for various companies,
including employee benefits, workers' compensation,
unemployment insurance withholding, and Medicare. (ECF No. 16
at 2). After TS Dynamic expressed interest in buying NOS, the
companies agreed to a transfer twenty-five of NOS's
accounts to TS Dynamic. Id. at 2-3. As part of the
agreement, TS Dynamic agreed to pay NOS's tax and
workers' compensation liabilities, as well as a
percentage of revenues derived from current and future
accounts. Id. at 3. Under a second agreement, NOS
maintains that TS Dynamic agreed to indemnify and defend NOS
from lawsuits associated with workers' compensation
insurance. Id. at 4.
January 23, 2019, NOS filed a complaint against TS Dynamic,
alleging that TS Dynamic breached the agreements by failing
to make its contractually obligated payments and failing to
defend NOS from liabilities stemming from lawsuits against
it. (ECF No. 1). NOS also alleges that TS Dynamic, or related
defendants, have stolen NOS's identity and infringed on
its trademarked name to conduct fraudulent business. (ECF
Nos. 1, 16 at 5). NOS alleges that TS Dynamic has conducted
itself as NOS in Alabama and has failed to pay tax
liabilities under NOS's name in that state. Id.
March 11, 2019, TS Dynamic filed a third-party complaint
against Rangel, alleging that Rangel violated a non-compete
clause contained in the agreement. (ECF No. 12 at 13-15). In
response, Rangel and NOS filed the instant motions to dismiss
the third-party complaint and to strike TS Dynamic's
claim for punitive damages. (ECF Nos. 16, 17).
may dismiss a complaint for “failure to state a claim
upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6). A properly pled complaint must provide “[a]
short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2);
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007). While Rule 8 does not require detailed factual
allegations, it demands “more than labels and
conclusions” or a “formulaic recitation of the
elements of a cause of action.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
allegations must be enough to rise above the speculative
level.” Twombly, 550 U.S. at 555. Thus, to
survive a motion to dismiss, a complaint must contain
sufficient factual matter to “state a claim to relief
that is plausible on its face.” Iqbal, 556
U.S. at 678 (citation omitted).
Iqbal, the Supreme Court clarified the two-step
approach district courts are to apply when considering
motions to dismiss. First, the court must accept as true all
well-pled factual allegations in the complaint; however,
legal conclusions are not entitled to the assumption of
truth. Id. at 678-79. Mere recitals of the elements
of a cause of action, supported only by conclusory
statements, do not suffice. Id. at 678.
the court must consider whether the factual allegations in
the complaint allege a plausible claim for relief.
Id. at 679. A claim is facially plausible when the
plaintiff's complaint alleges facts that allow the court
to draw a reasonable inference that the defendant is liable
for the alleged misconduct. Id. at 678.
the complaint does not permit the court to infer more than
the mere possibility of misconduct, the complaint has
“alleged-but not shown-that the pleader is entitled to
relief.” Id. (internal quotation marks
omitted). When the allegations in a complaint have not
crossed the line from conceivable to plausible,
plaintiff's claim must be dismissed. Twombly,
550 U.S. at 570.
Ninth Circuit addressed post-Iqbal pleading
standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th