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LLC v. Manchester Anika, LLC

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

August 13, 2019

469 COUNTY ROAD BALDWYN PROPERTIES, LLC [1] PLAINTIFF
v.
MANCHESTER ANIKA, LLC DEFENDANT

          MEMORANDUM OPINION

          SHARION AYCOCK UNITED STATES DISTRICT JUDGE

         469 County Road Baldwyn Properties, LLC filed its Complaint [1] on June 28, 2018, seeking damages under state law for Manchester Anika, LLC's alleged fraudulent inducement, fraudulent misrepresentation, and fraudulent concealment premising jurisdiction on diversity of citizenship. Presently before the Court is Manchester Anika's Renewed[2] Motion to Dismiss [19] Under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The issues are fully briefed and ripe for review.

         Factual and Procedural Background

         On October 4, 2017, Baldwyn Properties entered into a Purchase and Sale Agreement [18-1] with Manchester Anika for the property located at 469 County Road 2878 in Baldwyn, Mississippi. This Agreement provided for a “Due Diligence Period” during which Baldwyn Properties could inspect the condition of the property. If Baldwyn Properties was not satisfied with the condition of the property, Baldwyn Properties had the right to terminate the Agreement prior to the expiration of the Due Diligence Period. The Agreement contained an “As Is” provision that stated the following:

PURCHASER ACKNOWLEDGES THE PURCHASER'S OPPORTUNITY TO INSPECT THE PROPERTY, AND PURCHASER AGREES TO PURCHASE THE PROPERTY ON AN ‘AS IS' BASIS. PURCHASER ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THAT NEITHER SELLER NOR ITS AGENTS, CONTRACTORS OR REPRESENTATIVES HAVE MADE ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTEES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY . . .

         A large warehouse is located on the property. Baldwyn Properties attempted to inspect the roof of this warehouse during the Due Diligence Period, but Manchester Anika was not able to find a ladder for access to the roof. Baldwyn Properties decided not to return to the property to inspect the roof. Baldwyn Properties allegedly made this decision because of a printed representation that the roof was new and had an extended warranty.

         Baldwyn Properties alleges that Manchester Anika represented that the warehouse had “a new roof installed in 2015 with extended warranty through 2027.” However, the record reflects that the roof was only restored and was not new. This alleged representation was presented on the realtor's marketing materials for the property. The marketing materials also stated “[the realtor] does not guarantee, warranty or represent [the information's] accuracy. It is the Purchaser's responsibility to independently confirm the accuracy and completeness of the information contained herein”.

         After expiration of the Due Diligence Period, but before closing, Baldwyn Properties discovered leaks in the roof.[3] Because the Due Diligence Period expired and the deposit was no longer recoverable, Baldwyn Properties did not want to terminate the Agreement. Furthermore, Baldwyn Properties alleges that it proceeded with the purchase due in part to its belief that the roof was new and protected by warranty and that the leaks would be minor and inexpensive to repair.

         After closing, Baldwyn Properties contacted the company that restored the roof to attempt to repair the leaks under its warranty. The company attempted to repair the roof several times, but the roof continues to leak. The leaks have caused damage to the warehouse and there is a substantial risk of further damage, loss of tenants, and the possibility of having to replace the roof.

         Baldwyn Properties asserts multiple claims of fraud under Mississippi law against Manchester Anika: fraudulent misrepresentation, fraudulent inducement, and fraudulent concealment. Manchester Anika now requests dismissal of the claims under Federal Rule of Civil Procedure Rule 12(b)(6) for failure to state a claim upon which relief can be granted.

         Legal Standard

         In reviewing Manchester Anika's Motion to Dismiss [19], the “court accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)). The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of a plaintiff's complaint. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007).

         In order to survive a 12(b)(6) motion, a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Id. A legally sufficient complaint must establish more than a “sheer possibility” that the plaintiff's claim is true. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

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

         Discussion ...


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