United States District Court, N.D. Mississippi, Oxford Division
ORDER DENYING MOTIONS TO DISMISS
DEBRA M. BROWN, District Judge.
This contract dispute is before the Court on: (1) the Rule 12(b)(6) motions to dismiss of Defendants Clinton L. Boutwell and the Char Grille Seafood & Steaks LLC d/b/a Oxford Grillehouse, Doc. #3; Doc. #14; and (2) Defendants' motion for sanctions, Doc. #3. Defendants seek dismissal of the complaint and amended complaint filed by Plaintiffs Scott Michael and Rooster's Blues House, LLC.
As a general matter, "[a] pleading that states a claim for relief must contain... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). When a complaint falls short of this directive, a defendant may move to dismiss the claim for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In considering the interplay between Rule 8 and Rule 12, the United States Supreme Court has explained that:
To survive a motion to dismiss [for failure to state a claim], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and punctuation omitted) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-58 (2007)). Under this standard, a "court must accept all well-pleaded facts as true and view those facts in the light most favorable to the plaintiff." Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n.44 (5th Cir. 2011) (internal quotation marks and punctuation omitted).
In addition to the standard articulated by Iqbal and Twombly, Rule 9(b) of the Federal Rules of Civil Procedure requires that, "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." This heightened pleading standard is "supplemental to the Supreme Court's recent interpretation of Rule 8(a)...." U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 185 (5th Cir. 2009). As a supplement, Rule 9 requires "simple, concise, and direct allegations of the circumstances constituting fraud, which... must make relief plausible, not merely conceivable, when taken as true." Id. at 185-86 (internal quotation marks omitted).
Factual Allegations and Procedural History
A. The Parties and Relevant Property
Plaintiff Scott Michael owns and operates Plaintiff Rooster's Blues House, LLC ("Rooster's"). Doc. #12 at ¶ 6. Together, Plaintiffs lease a three-story building located at 114 Courthouse Square, Oxford, Mississippi ("Building"). Id. The Building has an upstairs (second floor), a downstairs (first floor), and a basement, with a fully equipped commercial kitchen on the first floor. Id. at ¶¶ 6, 9.
Prior to May 2013, Plaintiffs operated Rooster's Blues House, a restaurant and bar in the Building. Doc. #12 at ¶ 6. The business primarily served food on the first floor and alcohol on the second floor. Id. Plaintiffs used the basement for storage of equipment. Id. Pursuant to the terms of Rooster's restaurant license, the premises was required to derive at least 25% of its revenue "from the preparation, cooking and serving of meals...." Miss. Code Ann. § 67-1-5(m)(i); see also Doc. #12 at ¶ 7.
Defendant Clint Boutwell operates Defendant The Char Grille Seafood & Steaks LLC d/b/a Oxford Grillehouse ("Grillehouse"). Doc. #27-1.
B. The Sublease
In December 2012, Michael and Boutwell entered into negotiations regarding a potential sublease of the first floor of the Building, including use of the commercial kitchen. Doc. #12 at ¶¶ 9, 12. During the course of the negotiations, Boutwell promised Michael that "he would cook and provide food from a simpler menu to Rooster's patrons upstairs." Id at ¶ 12. Following Boutwell's promise, the parties agreed that they needed to ...