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Cullop v. Land Resource Company

February 6, 2007

JARED CULLOP, PLAINTIFF,
v.
LAND RESOURCE COMPANY, LLC, DEFENDANT.



The opinion of the court was delivered by: Judge Mattice

MEMORANDUM AND ORDER

Plaintiff Jared Cullop brings this action against Defendant Land Resource Company, LLC ("Land Resource"), alleging causes of action for fraud, promissory estoppel, breach of contract, and unjust enrichment.

Before the Court is Defendant Land Resource's Motion to Dismiss, in which Defendant seeks the dismissal of Plaintiff's fraud claim.

For the reasons explained below, Defendant Land Resource's Motion to Dismiss is GRANTED.

I. STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint that fails to state a claim upon which relief can be granted. The purpose of Rule 12(b)(6) is to permit a defendant to test whether, as a matter of law, the plaintiff is entitled to relief even if everything alleged in the complaint is true. Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). A complaint should not be dismissed for failure to state a claim unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Arrow v. Fed. Reserve Bank, 358 F.3d 392, 393 (6th Cir. 2004). The complaint must contain either "direct or inferential allegations respecting all the material elements to sustain a recovery . . . ." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988) (internal quotations and citations omitted). The Court must determine not whether the plaintiff will ultimately prevail but whether the plaintiff is entitled to offer evidence to support his claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). In making this determination, the Court must construe the complaint in the light most favorable to the plaintiff and accept as true all well-pleaded factual allegations. Arrow, 358 F.3d at 393; Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir. 1999). The Court need not accept as true mere legal conclusions or unwarranted factual inferences. Id.

II. FACTS

Construing the complaint in the light most favorable to Plaintiff and accepting as true all well-pleaded factual allegations, the relevant facts are as follows.

Defendant Land Resource is a company that engages in the business of developing and selling real property to the general public. (Court Doc. No. 1-3, Am. Compl. ¶ 3.) Land Resource is currently developing several communities in Tennessee. (Id.) Plaintiff Cullop is a licensed real estate broker. (Id.)

In August 2000, Land Resource aggressively recruited and hired Cullop as a real estate broker to sell lots in Land Resource's various developments. (Id. ¶ 4.) At all relevant times, Cullop performed his duties in accordance with Land Resource's policies, procedures, and representations about the various developments and their promised amenities. (Id. ¶ 5.) During his employment, Cullop sold, and Land Resource closed on, multiple lots, and Cullop was paid a six percent commission based on those sales. (Id.)

In the fall of 2004, Cullop became aware of certain irregularities in some of Land Resource's business practices, and he questioned those practices. (Id. ¶ 6.) Thereafter, Land Resource intentionally and maliciously delayed closings on lots Cullop sold and misrepresented the reason for such delays. (Id. ¶¶ 6-7.) No legitimate reason existed for the delays, and Cullop alleges that Land Resource's sole intent in delaying the closings was to avoid paying Cullop a commission on such sales, as it is Land Resource's practice not to pay commissions on closings that occur after a broker's termination for any reason. (Id. ¶ 6.) When Cullop protested the delay in the closings, Cullop was fired, effective February 7, 2005. (Id.)

III. ANALYSIS

Defendant contends that Plaintiff's fraud claim must be dismissed because such claim is not pled with sufficient particularity to meet the requirements of Federal Rule of Civil Procedure 9(b), as Plaintiff's complaint fails to allege any specific facts relating to the fraud claim. In response, Plaintiff contends that his allegations that Defendant intentionally, maliciously, and purposely delayed closings on lots Plaintiff sold in order to avoid payment of a commission and that Defendant ...


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