United States District Court, D. Rhode Island
JOHN GARDNER, IV, and DAVID GARDNER, Plaintiffs/Counter Defendants,
JAMES R. LARKIN, individually and as the Managing Member of BluShield Window Systems, LLC, and BLUSHIELD WINDOW SYSTEMS, LLC, Defendants/Third-Party Plaintiffs/ Counter Claimants,
CUSTOM BUILT WINDOWS AND DOORS MANUFACTURING, LLC, CUSTOM BUILT, INC., and JOHN E. GARDNER, III, Third-Party Defendants.
REPORT AND RECOMMENDATION
PATRICIA A. SULLIVAN, UNITED STATES MAGISTRATE JUDGE.
before the Court is Defendant Blushield Window Systems
LLC's (“Blushield”) motion to dismiss (ECF
No. 49) all counts asserted in the First Amended Complaint
(ECF No. 6, “FAC”) by Plaintiffs John Gardner,
IV, (“Johnny Gardner”) and David Gardner, as well
as Blushield's alternative motion for judgment on the
pleadings (ECF No. 63). Both motions have been referred to me
for report and recommendation. 28 U.S.C. § 636(b)(1)(B).
For the reasons that follow, I recommend that the first
motion be passed as moot and that the second motion (for
judgment on the pleadings) be granted.
and David Gardner are brothers who claim that they signed and
entered into a binding “Ownership Agreement” with
James Larkin (“Larkin”) on August 11, 2017;
Larkin drafted the “Ownership Agreement.” FAC
¶ 14; ECF No. 6-3 (“Ex. C”). According to
the FAC, the “Ownership Agreement” was the basis
for the transfer to Larkin of a 50% ownership interest in
each of two companies - Custom Built Inc. (“CBI”)
and Custom Built Window Manufacturing LLC
(“CBWM”) - then owned by various members of the
Gardner family. FAC ¶¶ 8, 15. In consideration,
Larkin promised to “take the steps necessary to
transfer ownership of [Blushield] to CBWM.”
Id. ¶ 15. Larkin “is the sole managing
member of Blushield.” Id. ¶ 4. However,
Larkin “refused and continue[d] to refuse to transfer
[Blushield] to CBWM.” Id. ¶ 20. Larkin is
named in the caption as being sued both “individually
and as the managing member of Blushield.” Id.
at 1. The “Ownership Agreement” itself contains
no language stating, suggesting or permitting the inference
that, when Larkin signed it, he was acting on behalf of
Blushield. See Ex. C.
reliance on these factual allegations of breach of the
“Ownership Agreement, ” Johnny and David Gardner
sued Larkin and Blushield. In Count I, they charge that
Larkin received CBI stock and a CBWM membership interest yet
refused to transfer Blushield to CBWM, which should have been
done on August 12, 2017. Because the value of Blushield's
stock is uncertain, Count I seeks specific performance from
Blushield. In Count III, Plaintiffs allege that they
justifiably relied on Larkin's promises concerning
Blushield and that Larkin has been unjustly enriched by his
receipt of 50% ownership interest in CBI and CBWM while
refusing to fulfill his part of the agreement. FAC
¶¶ 30-34. Count IV alleges Larkin owes a fiduciary
duty to CBI to fulfill his agreement to transfer Blushield to
CBWM; it asks the Court to impose a constructive trust on
Blushield's membership interests, intellectual property
and profits. Id. ¶¶ 36-37. Lastly, Count V
relies on R.I. Gen Laws § 9-1-45 to allege that Larkin
and Blushield fail to raise a justiciable issue of law or
fact, which entitles Plaintiffs to recover their
attorneys' fees. Id. ¶¶ 38-39.
6, 2019, Blushield answered the FAC and, on May 27, 2019, it
filed an amended answer. ECF Nos. 17, 41. In both answers, it
failed to raise the defense of failure to state a claim.
Nevertheless, three days after filing its amended answer, on
May 31, 2019, Blushield filed the motion to dismiss pursuant
to Fed.R.Civ.P. 12(b)(6) for failure to state a claim,
asserting the FAC contains no plausible factual allegations
setting forth a viable claim against it. ECF No. 49. When
Johnny and David Gardner responded by pointing out that the
motion was out of time pursuant to Fed.R.Civ.P. 12(b) because
Blushield already answered the FAC, Blushield promptly filed
its second dispositive motion, this time in reliance on
Fed.R.Civ.P. 12(c). Substantively, the motions are identical
- both argue that the FAC lacks plausible facts sufficient to
articulate a viable claim against Blushield and that
Blushield should be dismissed from the case.
STANDARD OF REVIEW
reviewing a motion to dismiss pursuant to Rule 12(b)(6) of
the Federal Rules of Civil Procedure, the court accepts as
true the well-pleaded factual allegations of the complaint
and draws all reasonable inferences in favor of the
plaintiff. See Cook v. Gates, 528 F.3d 42, 48 (1st
Cir. 2008); McCloskely v. Mueller, 446 F.3d 262, 266
(1st Cir. 2006). Dismissal is proper if - after accepting all
facts as true and viewing them in the light most favorable to
the movant - the complaint fails to allege a plausible right
to relief. Doe v. Brown Univ., 896 F.3d 127, 130
(1st Cir. 2018). Plausibility demands that the factual
allegations “be enough to raise a right to relief above
the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). It is gauged by
drawing not only on “judicial experience, ” but
also on “common sense.” Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009). That is, the factual
allegations, direct and inferential, must meet each material
element necessary to sustain recovery under some actionable
legal theory. Farm Family Cas. Ins. Co. v. Rivers Paving,
Inc., 141 F.Supp.3d 176, 177 (D.R.I. 2015).
standard of review for a Rule 12(c) motion is the same as the
standard for a Rule 12(b)(6) motion. See Doe, 896
F.3d at 130. Because of their substantive identicality,
whether the court is addressing a Fed.R.Civ.P. 12(b)(6)
motion or a Fed.R.Civ.P. 12(c) motion, dismissal is proper if
the complaint fails to allege a plausible right to relief.
Villeneuve v. Avon Prod., Inc., 919 F.3d 40, 49 (1st
Cir. 2019). “Rule 12(c) does not allow for any
resolution of contested facts; rather, a court may enter
judgment on the pleadings only if the uncontested and
properly considered facts conclusively establish the
movant's entitlement to a favorable judgment.”
Patrick v. Rivera-Lopez, 708 F.3d 15, 18 (1st Cir.
Fed.R.Civ.P. 12 provides that a party must assert every
defense to a claim in the responsive pleading, but that a
party may assert the defense of failure to state a claim
(Fed. R. Civ. P. 12(b)(6)) in a motion filed in lieu of an
answer as long as the motion is filed before the answer.
Jefferson v. Raimondo, C.A. No. 17-439 WES, 2018 WL
3873233, at *2 n.4 (D.R.I. Aug. 15, 2018). Once the party has
answered, it may still challenge the sufficiency of the
complaint pursuant to Fed.R.Civ.P. 12(c). Unlike some of the
defenses listed in Fed.R.Civ.P. 12(b), the defense of failure
to state a claim is not waived by a party's omission of
it from the responsive pleading. Fed.R.Civ.P.
12(h)(1)(B)(ii). To the contrary, Fed.R.Civ.P. 12(h)(2)
provides that it may be raised in a motion under Fed.R.Civ.P.
12(c) or in the responsive pleading at any time
until trial. “Rule[ ] 12(h)(2) . . . prolong[s] the
life of certain defenses, ” and allows parties at
trial to raise the defense of failure to state a claim
on which relief can be granted. Kontrick v. Ryan,
540 U.S. 443, 459 (2004) (“[A] defense based on . . .
‘failure to state a claim upon which relief can be
granted,' . . . could be raised, at the latest, ‘at
the trial on the merits.'”). Put differently,
despite the apparent mandate in Fed.R.Civ.P. 12(b) that
defenses “must” be in the pleading, it is clear
that. “even if [the defense of failure to state a claim
is] not interposed in any pleading, [it] may be the subject
of a motion under Rule 12(c) for judgment on the pleadings or
of a motion to dismiss at trial.” 5C Wright &
Miller, Federal Practice and Procedure § 1392
(3d ed. 2019); see Hickey v. MetroWest Med. Ctr.,
193 Fed.Appx. 4, *1 (1st Cir. 2006) (failure to state claim
not waived if not asserted in answer).
Blushield's prompt filing of its Fed.R.Civ.P. 12(c)
motion as soon as its error in captioning its post-answer
motion as based on Fed.R.Civ.P. 12(b)(6) was brought to its
attention, the Court rejects the Gardners' procedural
argument that it must deny these motions as untimely. Rule 12
is crystal clear - a party's argument that a claim is
insufficient pursuant to Twombly/Iqbal should be
considered whether raised in the responsive pleading or in a
pre- or post-answer motion. Fed.R.Civ.P. 12(b), (c), (h);
see Kontrick, 540 U.S. at 459; Federal Practice
and Procedure § 1392. Based on the foregoing, I
recommend that the Court pass Blushield's Fed.R.Civ.P.
12(b)(6) motion and reject the Gardners' procedural
attack on its Fed.R.Civ.P. 12(c) motion.
the FAC asserts two causes of action - breach of contract and
first cause of action, for contractual breach of the
“Ownership Agreement, ” is in Count II. However,
the FAC does not purport to join Blushield in Count II, which
sues only Larkin for breach of contract. And the related
Counts I and V seek only remedies - specific performance and
attorneys' fees - that are grounded in the contract claim
against Larkin. That is, Count I asks that the Court order
Larkin to specifically perform his contractual promise to
transfer his ownership interest in Blushield to CBWM. Under
Rhode Island law, specific performance is a remedy based on
the claim of the wronged party that there is a contract and
that the court should order its performance.
Greensleeves, Inc. v. Smiley, 942 A.2d 284, 293 n.15
(R.I. 2007) (specific performance is a contract remedy).
Essential to the availability of this remedy is the existence
of a contract with provisions that are “clear,
definite, certain, and complete.” Fisher v.
Applebaum, 947 A.2d 248, 251-52 (R.I. 2008); see
Smart v. Bos. Wire Stitcher Co., 148 A. 803, 806 (R.I.
1930) (specific performance is a remedy that applies when
parties have entered into a contract). A specific performance
claim is not plausible against a non-party to the contract.
See 172 Audubon Corp. v. 1018 Morris Park Ave. Realty,
Inc., 3 A.D.3d 451, 452 (N.Y.App.Div. 2004) (non-party
to contract of sale is entitled to summary judgment on suit
seeking, inter alia, specific performance); E.
Harlem Dev. P'ship v. E. Harlem Council for Human Servs.,
Inc., 167 A.D.2d 253, 253-54 (N.Y.App.Div. 1990)
(non-party to contract is not proper party to action for
specific performance). Relatedly, Count V seeks
attorneys' fees “as a result of defendant
Larkin's breach of the Agreement.” FAC ¶ 39.
Confirming that this is a ...