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SRVR, LLC v. Neidoni

United States District Court, W.D. Kentucky, Louisville Division

January 13, 2020

SRVR, LLC, Plaintiff,
v.
FLORIN NEIDONI, Defendant.

          MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

          CLARIAHORN BOOM, UNITED STATES DISTRICT COURT JUDGE.

         This matter is before the Court on Defendant Florin Neidoni's (“Neidoni”) Motion to Dismiss. [R. 9] Neidoni seeks dismissal of Plaintiff SRVR LLC's (“SRVR”) claims pursuant to Fed.R.Civ.P. 12(b)(6) for failing to state a claim upon which relief can be granted. SRVR responded to Neidoni's motion [R. 12], and Defendant filed his brief in reply. [R. 13] This matter, being fully briefed, is now ripe for review. For the reasons stated herein, the Court will DENY Defendant's Motion.

         I. Background Facts

         SRVR, LLC is a telecommunications company with one sole member, Daniel Popa (“Daniel”). [R. 1 p. 1] SRVR is one of many companies Daniel Popa owned with his former wife, Lucia Popa (“Lucia”). [R. 9-2 pp. 2-3] When the two divorced, they divided up their various companies; some were majority owned by Daniel, others by Lucia. [R. 9-1 p. 4] Predictably, this led to ongoing litigation between the Popas and others involved with the companies that took place in Jefferson Circuit Court, and on September 29, 2015 the parties to that litigation entered into a Settlement Agreement (“Settlement Agreement” or “Agreement”). [R. 9-1 p. 5; R. 11] This Agreement provided that Daniel would purchase all of Lucia's ownership interests in their various companies, including her and her associates' interests in SRVR. [Id.] Defendant Neidoni was not a party to this Settlement Agreement, nor was he a party to the state court litigation. [R. 9-1; R. 11] Unfortunately for all involved, this Settlement Agreement was not the end of litigation between the parties. Daniel filed a Second Amended Complaint [R. 9-1] against the parties to the Settlement Agreement resulting in further litigation. [R. 9-2]

         In this case, SRVR claims that Florin Neidoni, the company's former co-Chief Executive Officer, broke an alleged contract and violated his fiduciary duties to the company by failing to repay SRVR for his tuition expenses at the Kellogg School of Management at Northwestern University. [R. 1 pp. 2-4] Presumably as an alternative to its contract claim, SRVR also claims that Neidoni has been unjustly enriched from the agreement. [Id. p. 3] SRVR claims that the parties had an agreement that SRVR would lend Neidoni money to cover costs and expenses for participating in Kellogg's MBA program. [Id. p. 2] The purported agreement stated that Neidoni would have to repay SRVR unless he remained employed as the co-CEO for at least three years after completing the program. [Id.] Neidoni graduated from the program in June, 2015. [Id. p. 3] In its Complaint, SRVR claims that “Neidoni left SRVR's employment in September 2015, ” [Id. (emphasis added)] and that he left “after the 2015 Settlement Agreement was executed.” [R. 12 p. 9] Coincidentally, this was the first day that Daniel was the sole member of SRVR. Even more coincidentally, or perhaps not, Neidoni is now the current husband of Lucia Popa, Daniel's ex-wife. [R. 9 p. 2] Now Plaintiff claims that after leaving SRVR, Neidoni has failed to repay any of the money SRVR lent him for his participation in the MBA program. [R. 1 p. 2]

         II. Standard of Review

         A. Conversion of Motion to Dismiss to a Motion for Summary Judgment

         The Court cannot address all the arguments in Neidoni's Motion to Dismiss without converting the Motion to one for summary judgment. Neidoni's Motion raises the affirmative defenses of claim preclusion, release based on the purported Settlement Agreement between him and SRVR, and a forum selection clause within that Agreement. [R. 9 pp. 1-2] A motion to dismiss may be granted on the basis of an affirmative defense if the facts conclusively establish the defense as a matter of law. In re McKenzie, 716 F.3d 404, 412 (6th Cir. 2013). Courts are typically reluctant to grant motions to dismiss based on an affirmative defense unless the plaintiff has anticipated the defense and explicitly addressed it in the pleadings. Pfeil v. State St. Bank & Tr. Co., 671 F.3d 585, 599 (6th Cir. 2012). “In fact, we only address affirmative defenses on Rule 12(b)(6) motions where the plaintiff's own allegations show that a defense exists and legally defeats the claim for relief.” Lockhart v. Holiday Inn Exp. Southwind, 531 Fed.Appx. 544, 547 (6th Cir. 2013) (quoting Marsh v. Genentech, Inc., 693 F.3d 546, 554-55 (6th Cir. 2012)) (internal quotations omitted).

         When reviewing a motion to dismiss, a district court may not consider matters other than the complaint and its attachments without converting the motion to dismiss into a motion for summary judgment. Buck v. Thomas M. Cooley Law School, 597 F.3d 812, 816 (6th Cir. 2010) (citing Winget v. JP Morgan Chase Bank, 537 F.2d 565, 576 (6th Cir. 2008)). When a party asks the Court to consider matters outside the pleadings when considering a motion under Fed.R.Civ.P. 12(b)(6), the Court must treat the motion as one for summary judgment under Rule 56. Fed. R. Civ P. 12(d). There are some exceptions to this general rule: district courts may consider public records, matters of which a court can take judicial notice, and letter decisions of government agencies. Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999) (internal quotations omitted). Among the things of which a district court may take judicial notice are other court proceedings. Buck, 597 F.3d at 816. As support for his claim preclusion defense, Neidoni has attached a copy of a state court complaint and a state court order. [R. 9-1; R. 9-2] To support his release and venue defenses, Neidoni filed a copy of the Settlement Agreement. [R. 11] While the Court may consider the state court filings without converting Neidoni's Motion to a motion for summary judgment, it cannot do so with the Settlement Agreement.

         To convert a motion under Rule 12 to a motion for summary judgment under Rule 56, “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed.R.Civ.P. 12(d). However, notice of such a conversion is only required where one party is “likely to be surprised by the proceedings, ” which necessarily depends on the facts and circumstances of the particular case. Wysocki v. International Business Machine Corp., 607 F.3d 1102, 1105 (6th Cir. 2010) (quoting Salehpour v. Univ. of Tenn., 159 F.3d 199, 204 (6th Cir. 1998)). In this case neither party will be surprised by the Court converting this motion. Neidoni filed the Settlement Agreement and based most of his arguments on its contents. SRVR addressed all of those arguments in its Response, and referenced provisions within the Settlement Agreement as well. Therefore, the Court will convert Neidoni's Motion to Dismiss [R. 9] into a motion for summary judgment under Rule 12(d).

         B. Standard

         Summary judgment is proper where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). When determining a motion for summary judgment, a court must construe the evidence and draw all reasonable inferences from the underlying facts in favor of the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Lindsay v. Yates, 578 F.3d 407, 414 (6th Cir. 2009). The court may not “weigh the evidence and determine the truth of the matter” at the summary judgment stage. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 265 (1986). When considering summary judgment, “[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Id. at 252. The initial burden of establishing no genuine dispute of material fact rests with the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The Court “need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3). If the moving party satisfies this burden, the burden then shifts to the nonmoving party to produce “specific facts” showing a “genuine issue” for trial. Id. at 324. Where “a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact, ” the Court may treat that fact as undisputed. Fed.R.Civ.P. 56(e).

         A fact is “material” if the underlying substantive law identifies the fact as critical. Anderson, 477 U.S. at 248. Thus, “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Id. A “genuine” issue exists if “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Id. at 249.

         III. ...


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