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Aura Light U.S. Inc. v. LTF International LLC

United States District Court, D. Maryland

March 19, 2018

AURA LIGHT U.S. INC., Plaintiff,
v.
LTF INTERNATIONAL LLC, et al., Defendants.

          MEMORANDUM OPINION

          George L. Russell, III, United States District Judge

         THIS MATTER is before the Court on Plaintiff Aura Light U.S. Inc.'s (“Aura”) Motion for Partial Summary Judgment (ECF No. 46)[1] and Defendant Paul V. Palitti, Jr.'s Motion to Dismiss (ECF No. 56). The Motions are ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the reasons outlined below, the Court will grant in part and deny in part Aura's Motion and grant Palitti's Motion.

         I. BACKGROUND

         Between December 2014 and May 2015, Defendants LTF International, LLC (“LTF International”), LTF Lighting, LLC (“LTF Lighting”), WIS Lighting, LLC (“WIS Lighting”) (collectively, the “Lighting Defendants”), and Paul V. Palitti, Jr. submitted thirty-four Purchase Orders for the manufacture and delivery of specific lighting products.[2] (1st Am. Compl. ¶ 14, ECF No. 54; Aura Light II 1st Am. Compl. ¶ 15, ECF No. 38-4, ).[3] After manufacturing, or manufacturing and delivering, the lighting products, Aura sent Defendants thirty-four Invoices, which corresponded with each Purchase Order. (1st Am. Compl. ¶ 19; Aura Light II 1st Am. Compl. ¶ 19). Defendants failed to pay the amounts due under the Invoices. (1st Am. Compl. ¶ 20; Aura Light II 1st Am. Compl. ¶ 20; Svennson Aff. ¶ 14, ECF No. 46-2).

         On May 5, 2017, Aura filed its Motion for Partial Summary Judgment against the Lighting Defendants in Aura Light II. (ECF No. 46). The Lighting Defendants filed their Response on May 26, 2017. (ECF No. 49). On June 19, 2017, Aura filed its Reply. (ECF No. 55).

         On June 8, 2017, while Aura's Motion was pending but unripe, the Court denied as moot without prejudice LTF International and Palitti's Motion for Judgment on the Pleadings. (ECF Nos. 52, 53). The Court also granted Aura's Motion for Leave to File Amended Complaints in Aura Light I and Aura Light II. (ECF Nos. 52, 53). Both First Amended Complaints added WIS Lighting as a Defendant and added allegations that LTF International, LTF Lighting, and WIS Lighting entered into a “Guaranty Agreement” (the “Guaranty”) under which the Lighting Defendants “each unconditionally and irrevocably guaranteed the payment of any and all sums due and owing” to Aura from LTF International. (1st Am. Compl. ¶ 16; Aura Light II 1st Am. Compl. ¶ 16). The First Amended Complaints also added another breach of contract count (Count II) against the Lighting Defendants for their breach of the Guaranty. (1st Am. Compl. ¶¶ 28-34; Aura Light II 1st Am. Compl. ¶¶ 27-34).

         On June 23, 2017, Palitti filed his Motion to Dismiss. (ECF No. 56). Defendants filed their Response on July 18, 2017. (ECF No. 55). To date, the Court has not received a Reply from Palitti.

         II. DISCUSSION

         A. Palitti's Motion to Dismiss[4]

         1. Standard of Review

         “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint, ” not to “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” King v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999)). A complaint fails to state a claim if it does not contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), or does not “state a claim to relief that is plausible on its face, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Though the plaintiff is not required to forecast evidence to prove the elements of the claim, the complaint must allege sufficient facts to establish each element. Goss v. Bank of Am., N.A., 917 F.Supp.2d 445, 449 (D.Md. 2013) (quoting Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012)), aff'd sub nom., Goss v. Bank of Am., NA, 546 F.App'x 165 (4th Cir. 2013).

         In considering a Rule 12(b)(6) motion, a court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs of Davidson Cty., 407 F.3d 266, 268 (4th Cir. 2005) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). But, the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979), or legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678.

         2. Analysis

         As a threshold matter, the Court notes that in its June 8, 2017 Order granting Aura's Motion for Leave to File Amended Complaints, the Court directed the Clerk to docket the First Amended Complaints in both Aura Light I and Aura Light II. (June 8, 2017 Order, ECF No. 53). The Clerk, however, only docketed the First Amended Complaint in Aura Light I. (See ECF Nos. 54, 38-4). As a result, Palitti now moves to dismiss only the First Amended Complaint in Aura Light I. The Court will, therefore, direct the Clerk to docket the First Amended Complaint in Aura Light II (ECF No. 38-4), consistent with the Court's June 8, 2017 Order. (See June 8, 2017 Order). The Court will also direct Palitti to file a status report within ten days of the date of this Memorandum Opinion and Order addressing whether he intends to file a motion to dismiss the First Amended Complaint in Aura Light II that incorporates or includes any of the same arguments in his currently pending Motion.

         Turning to Palitti's Motion, in Aura Light I, Aura brings a breach of contract claim against LTF International, LTF Lighting, and Palitti for their failure to pay for the products Aura manufactured for LTF International.[5] Palitti argues that the Court should dismiss him from Aura Light I because the First Amended Complaint fails to plausibly state a breach of contract claim against him. The Court agrees for at least two reasons.

         First, in the Court's June 8, 2017 Memorandum Opinion, the Court concluded that no contracts existed between Palitti and Aura because Palitti had not offered to purchase any goods from Aura-he had not signed the Purchase Orders in his personal capacity. (June 8, 2017 Mem. Op. [“Mem. Op.”] at 9-10, ECF No. 52). Aura's First Amended Complaint in Aura Light I does not alter this fact. Second, although the First Amended Complaint in Aura Light I adds allegations related to the Guaranty, Aura does not bring its new breach of contract count based on the Guaranty against Palitti. Thus, the Court concludes that Aura does not plausibly allege a breach of contract claim against Palitti.

         Nevertheless, Aura seeks to retain Palitti as a party to Aura Light I because “post-judgment discovery may reveal a basis for Mr. Palitti's liability, ” such as piercing the corporate veil or Palitti being an alter ego of one of the Lighting Defendants. (Pl.'s Resp. at 1, ECF No. 58). Aura, however, is “bound by the allegations contained in its complaint and cannot, through the use of motion briefs, amend the complaint.” Zachair, Ltd. v. Driggs, 965 F.Supp. 741, 748 n.4 (D.Md. 1997) aff'd, 141 F.3d 1162 (4th Cir. 1998).

         Here, the First Amended Complaint in Aura Light I does not contain any allegations to support alter ego or veil-piercing theories of liability. Accordingly, the Court will grant Palitti's Motion.

         B. Aura's Motion for Partial Summary Judgment

         1. Standard of Review

         In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the nonmovant, drawing all justifiable inferences in that party's favor. Ricci v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)). Summary judgment is proper when the movant demonstrates, through “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . admissions, interrogatory answers, or other materials, ” 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), (c)(1)(A). Significantly, a party must be able to present the materials it cites in “a form that would be admissible in evidence, ” Fed.R.Civ.P. 56(c)(2), and supporting affidavits and declarations “must be made on personal knowledge” and “set out facts that would be admissible in evidence, ” Fed.R.Civ.P. 56(c)(4).

         Once a motion for summary judgment is properly made and supported, the burden shifts to the nonmovant to identify evidence showing there is genuine dispute of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). The nonmovant cannot create a genuine dispute of material fact “through mere speculation or the building of ...


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