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Ningbo Bonny Wallcovering Co., Ltd v. East Systems, Inc.

United States District Court, N.D. Mississippi, Aberdeen Division

August 1, 2018

NINGBO BONNY DECORATIVE MATERIAL CO., LTD PLAINTIFF
v.
EAST SYSTEMS, INC., and GEORGE K. EAST DEFENDANTS

          ORDER AND MEMORANDUM OPINION

          SHARION AYCOCK UNITED STATES DISTRICT JUDGE.

         Ningbo Bonny Decorative Material Co., Ltd filed its Complaint [1] in this Court on July 27, 2017. East Systems, Inc. and George K. East responded by filing an Answer and Counterclaim [12] on October 13, 2017. Now before the Court is Ningbo Bonny's Partial Motion to Dismiss [14] several of the Defendants' counterclaims. The issues are fully briefed and ripe for review.

         Factual and Procedural Background

         The claims in this case arise from a business relationship between Ningbo Bonny and George East, of East Systems, Inc. Ningbo Bonny purchased a large commercial printing machine in Columbus, Mississippi. Ningbo Bonny shipped the machine to its location in China and engaged East in discussions to make various repairs and upgrades. East apparently had familiarity with the machine through work with his former employer from which Ningbo Bonny purchased the machine. At some point the relationship deteriorated resulting in the filing of this case. In response to the Complaint, the East Defendants filed counterclaims for breach of contract, breach of the duty of good faith and fair dealing, quantum meruit, an accounting, tortious breach of contract, and malicious prosecution. Plaintiff Ningbo Bonny now requests dismissal under Federal Rule of Civil Procedure 12(b)(6) of some of the Defendants' counterclaims, specifically those for malicious prosecution, request for an accounting, tortious breach of contract, and breach of the duty of good faith and fair dealing.

         Standard of Review

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint, or counterclaim, “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Phillips v. City of Dallas, 781 F.3d 772, 775-76 (5th Cir. 2015) (citing Gentilello v. Rege, 627 F.3d 540, 543-44 (5th Cir. 2010)) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “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.” Edionwe v. Bailey, 860 F.3d 287, 291 (5th Cir. 2017) (citing Iqbal, 556 U.S. at 678, 129 S.Ct. 1937).

         Mississippi substantive law applies in this diversity case. See Cox v. Wal-Mart Stores E., L.P., 755 F.3d 231, 233 (5th Cir. 2014) (citing Wood v. RIH Acquisitions MS II, LLC, 556 F.3d 274, 275 (5th Cir. 2009)).

         Malicious Prosecution

         In their Response [20] to the instant motion, the Defendants agree that their malicious prosecution claim has not yet accrued and concede to its dismissal. As such, the Defendants' malicious prosecution counterclaim is dismissed without prejudice.

         Request for an Accounting

         In their Counterclaim for an Accounting, the Defendants allege the following:

ESI has repeatedly asked Ningbo if it was prepared to pay for the services rendered by ESI on Ningbo's behalf and Ningbo has failed or refused to provide such assurances. ESI has performed valuable services for which payment should be remitted and for which Ningbo stubbornly refuses or fails to acknowledge. ESI requests that this Court order Ningbo to provide an accounting of all changes in the design that it requested during the period after the work was quoted and to account for why it has not paid ESI for the same.

         Ningbo Bonny argues that this allegation does not constitute an accounting claim because it is a demand for facts, not funds. Ningbo Bonny cites to State ex rel. King v. Harvey for the proposition that an accounting claim seeks “a detailed statement of the debits and credits between parties arising out of a contract or a fiduciary relation”; and to Briggs & Stratton Corp. v. Smith to support its argument that a litigant may not use an accounting claim as “mere disguise for what really could be accomplished through discovery.” State ex rel. King v. Harvey, 214 So.2d 817, 819 (Miss. 1968); Briggs & Stratton Corp. v. Smith, 854 So.2d 1045, 1048-49 (Miss. 2003).

         The Defendants have not offered any legal argument or contradictory precedent in response. The Court finds that the Counterclaim in this case mimics the false accounting claim in Briggs. In that case the Mississippi Supreme Court found that “An accounting has traditionally been a tool used by a plaintiff against a defendant. In the case sub judice, the plaintiff attempts to initiate an accounting against himself. It is a mere disguise for what really could be accomplished through discovery.” Briggs, 854 So.2d at 1049. The same is true in the instant case. The Defendants are demanding that Ningbo Bonny account for the sums owed to these same Defendants, and to explain why said sums have not been paid. Under the relevant precedent, this is not a true accounting claim, and is merely “a disguise for what ...


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