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CV Restoration LLC v. Diversified Shafts Solutions Inc.

United States District Court, D. Maryland

December 1, 2016

CV RESTORATION, LLC, Plaintiff,
v.
DIVERSIFIED SHAFTS SOLUTIONS, INC., Defendant.

          MEMORANDUM

          Ellen L. Hollander United States District Judge.

         CV Restoration, LLC (“CVR”), plaintiff, filed suit against defendant, Diversified Shafts Solutions, Inc. (“DSS”), on June 14, 2016. ECF 1. CVR alleges breach of contract, unjust enrichment, and breach of fiduciary duty arising out of two written agreements that plaintiff alleges the parties executed in August 2009. Id. ¶¶ 26-41. Plaintiff seeks to recover, among other things, $338, 310 and requests an accounting. Id. ¶¶ 41-46.

         DSS asserted counterclaims against CVR, alleging, inter alia, breach of contract and requesting an accounting. ECF 8 ¶¶ 59-65, 76-81. Count 1 of the counterclaim seeks attorneys' fees. In an “Amended Answer, Defenses, and Counterclaim” filed on September 23, 2016 (ECF 15, “Amended Counterclaim”), DSS also seeks attorneys' fees. Id. ¶¶ 55-58 (Count 1).

         CVR has moved to dismiss Count 1 of the Amended Counterclaim (ECF 21), in which DSS seeks attorneys' fees. CVR also filed a memorandum of law in support of its motion to dismiss. ECF 21-1 (collectively, the “Motion”). DSS opposes the Motion. ECF 24 (“Opposition”). CVR has not replied, and the time for doing so has passed. See Local Rule 105.2(a).

         No hearing is required to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion.

         I. Background

         I incorporate the factual and procedural history set forth in my Memorandum of November 10, 2016. ECF 27. I repeat and amplify the facts to the extent relevant and necessary.

         CVR is a Maryland limited liability company that “develops, manufactures, markets and distributes axles and their related components for all-terrain vehicles . . . .” ECF 1 ¶ 1, 3. DSS is a Georgia corporation that oversees the manufacture, marketing, and distribution of axles for all-terrain vehicles, and their related components. ECF 1 ¶¶ 2, 4; ECF 15 ¶¶ 2, 4.

         Plaintiff alleges (ECF 1 ¶¶ 6, 13) that on August 31, 2009, CVR and DSS entered into two agreements: “Limited Partnership Agreement for sales of ATV Axles” (see ECF 1-2) and “Partnership Agreement for Monster Axles.” See ECF 1-3 (collectively, the “Agreements”). According to plaintiff, “[t]he Agreements are substantively identical, and provide that CVR and DSS are forming a partnership for the manufacture and sale of ATV axles.” ECF 1 ¶ 14. Plaintiff avers that the gross profit from the “venture” was to be split “equally between” CVR and DSS. Id. ¶ 15. However, plaintiff asserts that “DSS has continually and systemically breached the Agreements” by not remitting its share. Id. ¶ 19.

         On September 6, 2016, CVR, as counter-defendant, filed a motion to dismiss counts 1, 5, and 7 of DSS's counterclaim. ECF 11 at 1 (“First Motion to Dismiss”). In its memorandum in support of the First Motion to Dismiss, CVR asserted that DSS failed to sufficiently state claims in its counterclaim for attorneys' fees (Count 1); fraud (Count 5); and punitive damages (Count 7). ECF 11-1 at 5-10.

         Then, on September 23, 2016, DSS responded in opposition to the First Motion to Dismiss (ECF 16) and submitted its Amended Counterclaim. ECF. DSS stated, in its opposition to the First Motion to Dismiss: “Upon further review, DSS agrees with Plaintiffs analysis of DSS' fraud and punitive damages claims. In an effort to focus this lawsuit on the remaining claims, DSS narrowed the scope of issues before the Court.” ECF 16 at 5. Accordingly, DSS did not assert claims for fraud or punitive damages in its Amended Counterclaim. See ECF 15.

         However, DSS argued that Count 1, which seeks attorneys' fees, should not be dismissed. ECF 16 at 3-4. Thus, DSS reasserted Count 1 in its Amended Counterclaim, with revisions. See ECF 15 at ¶¶ 55-58; ECF 15-1 at 10-11 (redline). In light of the Amended Counterclaim, by Order of September 28, 2016, I denied the First Motion to Dismiss as moot. ECF 19.

         Then, on October 7, 2016, CVR filed the Motion, arguing that DSS has failed to state a claim for attorneys' fees in the Amended Counterclaim. ECF 21. As noted, DSS filed its ...


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