United States District Court, W.D. Kentucky, Louisville
MEMORANDUM OPINION AND ORDER
JOHN G. HEYBURN, II, District Judge.
Universal Administrators Service, Inc. ("Universal") and Stanley Warranty, LLC ("Stanley Warranty") are both in the home warranty business. In December 2011, they signed a contract (the "Dealer Agreement") whereby Stanley Warranty agreed to sell, and Universal agreed to administer, a home warranty program (the "Safe Secure Club"). Stanley Warranty terminated the Dealer Agreement by written notice in April 2013. Soon afterwards, Gabriel Collins, once an employee of Universal, began working with Stanley Warranty. According to Universal, Stanley Warranty then started its own home warranty program (the "Stanley Safe Club") to compete with Universal. This lawsuit followed.
The current motions to dismiss focus upon various close issues of personal jurisdiction and Federal Rule of Civil Procedure 12(b)(6). The Court will resolve each in turn.
This litigation currently involves six parties and 27 causes of action asserted through a Complaint, a Counterclaim, and a Third Party Complaint. Four different parties have filed motions to dismiss thirteen of these claims. For clarity purposes, the Court will identify all of the parties and claims.
Stanley Warranty initiated this lawsuit with a Complaint against Universal and its Chief Executive Officer, Jack Wainwright, alleging: (1) Fraud; (2) Breach of Contract (as to Universal); (3) Breach of Duty of Good Faith and Fair Dealing; (5) Defamation (as to Wainwright); and (6) Piercing Corporate Veil.
Universal responded with a Counterclaim against Stanley Warranty, asserting ten causes of action: (1) Breach of Contract; (2) Common Law Fraud and Deceit; (3) Defamation; (4) Trademark Infringement; (5) Misappropriation of Trade Secrets; (6) Aiding and Abetting a Breach of Fiduciary Duty-Civil Conspiracy; (7); Tortious Interference with Contract; (8) Breach of Duty of Good Faith and Fair Dealing; (9) Unfair Competition under the Lanham Act; and (10) Deceptive Trade Practices and Unfair Competition.
Universal also filed a Third Party Complaint against Stanley and Margaret Mankovsky, both owners and officers of Stanley Warranty, and Gabriel Collins, the former Universal employee now working with Stanley Warranty, asserting: (1) Breach of Fiduciary Duty (as to Collins); (2) Aiding and Abetting a Breach of Fiduciary Duty-Civil Conspiracy (as to Stanley and Margaret Mankovsky); (3) Misappropriation of Trade Secrets; (4) Tortious Interference with Contract (as to Collins); (5) Tortious Interference with Contract (as to Stanley and Margaret Mankovsky); and (6) Defamation (as to Stanley Mankovsky).
After this back-and-forth flurry of lawsuits, the parties began to question personal jurisdiction and adequacy of the pleadings. Stanley and Margaret Mankovsky filed the first motions to dismiss. They claim: (1) this Court has no personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2); and (2) Universal failed to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6), with respect to Count 2 (Aiding and Abetting a Breach of Fiduciary Duty), Count 3 (Misappropriation of Trade Secrets), Count 5 (Tortious Interference with Contract), and Count 6 (Defamation).
Jack Wainwright and Universal also filed motions to dismiss all claims against them under Fed.R.Civ.P. 12(b)(6). Wainwright moved to dismiss: Fraud (Count 1), Defamation (Count 5), and "Piercing Corporate Veil" (Count 6). Universal moved to dismiss: Fraud (Count 1), Breach of Contract (Count 2), and Breach of Duty of Good Faith and Fair Dealing (Count 3).
The Court first considers Stanley and Margaret Mankovsky's motions to dismiss the following claims from Universal's Third Party Complaint: Aiding and Abetting Breach of Fiduciary Duty (Count 2), Misappropriation of Trade Secrets (Count 3), Tortious Interference with Contract (Count 5), and Defamation (Count 6). All of these claims were copied, almost verbatim, from Universal's Counterclaim against Stanley Warranty. (DN 11, amended at DN 19.) The Mankovskys moved to dismiss pursuant to both (1) Rule 12(b)(2) for lack of personal jurisdiction, and (2) Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Because Universal has not met its burden of establishing a prima facie case of personal jurisdiction over the Mankovskys, the Court need not resolve the second motion.
The parties' residencies are not in dispute. Stanley Warranty is a New Jersey LLC with its principal place of business in New Jersey. Stanley and Margaret Mankovsky, both owners and operators of Stanley Warranty, are New Jersey residents. Margaret has never been to Kentucky; Stanley has only been to Kentucky once, and he visited in relation to this litigation. Universal is a Kentucky corporation with its principal place of business in Kentucky. Jack Wainwright, a Kentucky resident, is Universal's CEO. Gabriel Collins, a Kentucky resident, was the office manager for Universal but is now a consultant for Stanley Warranty.
Universal's version of the relevant facts follow. Stanley Warranty and Universal signed the Dealer Agreement whereby Stanley Warranty agreed to sell, and Universal agreed to administer, Universal's home warranty program (the "Safe Secure Club"). This program required Universal to enter various other contracts. For example, Universal contracted with service providers to perform home repairs for Safe Secure Club members and with each customer who purchased a home warranty.
Stanley Warranty eventually terminated the Dealer Agreement. Shortly thereafter, Stanley Warranty started a home warranty program of its own-the Stanley Safe Club. This program directly competes with Universal's Safe Secure Club ...