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Pazzo, Inc. v. Innovative Custom Brands

October 28, 2010

PAZZO, INC. AND PURE SOLE, LLC, PLAINTIFFS
v.
INNOVATIVE CUSTOM BRANDS, INC., DEFENDANT
v.
FREDERICK LEVY, THIRD-PARTY DEFENDANT



The opinion of the court was delivered by: (Judge Munley)

MEMORANDUM

Before the court for disposition is Defendant Innovative Custom Brands, Inc.'s motion to dismiss Counts II and III of the plaintiffs' amended complaint. (Doc. 21). Having been briefed, the motion is ripe for disposition.

BACKGROUND

Plaintiffs Pazzo, Inc. ("Pazzo") and Pure Sole, LLC ("Pure Sole") are shoe importers based in Pennsylvania. (Am. Compl. ¶¶ 1, 2, 6 (Doc. 16)). Defendant Innovative Custom Brands, Inc. ("ICB") is a Texas corporation with a principal place of business in New York. (Id. ¶ 3). ICB is a purchasing agent in China for American shoe importers and owns a shoe factory there. (Id. ¶ 7).

The plaintiffs allege that between February 2008 and May 2008, over the course of various meetings and communications, the parties entered into a business relationship. (Id. ¶¶ 9 - 15). The plaintiffs allege that this relationship was contractual. (Id. ¶ 16). Summarizing the alleged contract, the parties agreed that the plaintiffs would provide ICB with shoe patterns and specifications. ICB, in turn, would produce sample shoes for the plaintiffs to market to its commercial customers. Thereafter, the plaintiffs would submit purchase orders to ICB for production-runs of the shoes.

ICB would either manufacture the ordered shoes or otherwise supply them. Finally, ICB allegedly agreed not to compete with the plaintiffs or pursue the plaintiffs' customers. (Id. ¶¶ 15(a)-(g)).

The plaintiffs allege that the parties each began to perform their respective duties under the contract but that only twelve of the plaintiffs' twenty-eight purchase orders were filled between June 2008 and October 2008. (Id. ¶¶ 24, 25). The plaintiffs allegedly withheld payment on two of the twelve fulfilled orders. (Id. ¶ 27). On October 23, 2008, the plaintiffs received ICB's assurances that the remaining sixteen purchase orders-- representing 11,885 pairs of shoes-- would be filled. (Id. ¶¶ 28 - 30). These orders were allegedly never filled, preventing the plaintiffs from fulfilling its own customers' orders. (Id. ¶ 33). The plaintiffs allege that they suffered a net loss of $111,036.11. (Id. ¶ 34). The plaintiffs further allege that, around this time, ICB offered to produce shoes for a catalogue sales company called RedCat-- a contracted customer of the plaintiffs. (Id. ¶¶ 36 - 27). Finally, the plaintiffs allege that ICB competed and interfered with unspecified other customers of the plaintiffs. (Id. ¶ 39).

Plaintiffs Pazzo and Pure Sole filed their complaint in the Court of Common Pleas of Lackawanna County, Pennsylvania on August 12, 2009. (Compl. (Doc. 1-2 at 15)). On September 1, 2009 Defendant ICB filed a notice of removal. (Doc. 1). On September 9, 2009 ICB filed an answer to the complaint along with a counterclaim against the plaintiffs and a third-party complaint against Third-Party Defendant Frederick Levy ("Levy"). (Doc. 3)).Pazzo, Pure Sole, and Levy filed a joint answer to the counterclaims and third-party complaint on September 29, 2009. (Doc. 4).

ICB filed a motion for judgment on the pleadings on November 12, 2009. (Doc. 9).The court denied ICB's motion for judgment on the pleadings on March 12, 2010 and permitted plaintiffs to file an amended complaint. (Doc. 15).

On March 22, 2010, the plaintiffs filed their amended complaint, which raises three counts. (Doc. 16). Count I alleges a breach of contract for ICB's failure to deliver the last sixteen purchase orders. (Id.) Counts II and III allege that ICB intentionally interfered with plaintiffs' contractual relations and prospective contractual relations, respectively. (Id.) On May 7, 2010 ICB filed the instant motion to dismiss Counts II and III of the plaintiffs' amended complaint, bringing the case to its present posture. (Doc. 21).

JURISDICTION

Because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, the court has removal jurisdiction over the case. See 28 U.S.C. § 1332 ("district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States[.]"); 28 U.S.C. § 1441 (A defendant can generally remove a state court civil action to federal court if the federal court would have had original jurisdiction to address the matter pursuant to the diversity jurisdiction statute).

LEGAL STANDARD

When a 12(b)(6) motion is filed, the sufficiency of a complaint's allegations are tested. Granting the motion is appropriate if, accepting as true all the facts alleged in the complaint, the plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," or put another way, "nudged [his or her] claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Third Circuit interprets Twombly to require the plaintiff to describe "enough facts to raise a reasonable expectation that discovery will reveal evidence of" each necessary element of the claims alleged in the complaint. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. ...


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