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Schmelzle v. Goddard

United States District Court, M.D. Tennessee, Nashville Division

March 6, 2015

AMY SCHMELZLE,
v.
KAILEN GODDARD, et al.

MEMORANDUM

JULIET E. GRIFFIN, Magistrate Judge.

Pursuant to the provisions of 28 U.S.C. § 636(c) and Rule 73(b) of the Federal Rules of Civil Procedure, the parties in this action have consented to have the Magistrate Judge conduct any and all proceedings in the action, including the entry of a final judgment. See Order entered July 18, 2014 (Docket Entry No. 49).

Pending before the Court is the Defendant Linda Didonato's Motion to Dismiss the Second Amended Complaint (Docket Entry No. 41), to which the Plaintiff has filed a response in opposition (Docket Entry Nos. 46-47). For the reasons set forth, the motion is denied.

I. BACKGROUND

The Plaintiff, Amy Schmelzle ("Schmelzle") is a resident of Kansas. Defendant Kailen Goddard ("Goddard") is a resident of Tennessee. At some point during the late 2000's, both the Plaintiff and Goddard worked remotely from their homes for MidTen Media in the internet marketing/advertising field. The Plaintiff alleges that when their employment with MidTen Media ended, the Plaintiff and Goddard entered into a partnership in late 2008 to form an internet marketing company called Lead Me Marketing Group, LLC ("Lead Me"). The Plaintiff alleges that upon the advice of Goddard and attorney David Ridings, who assisted with the formation of the company, she agreed to be a silent, but equal, partner and was not included in the Articles of Organization for the company that were filed with the Tennessee Secretary of State. The Plaintiff asserts that over the next several years, she and Goddard worked together at Lead Me, shared costs and profits equally, made decisions about the company jointly, and created proprietary software and internet websites, including a website known as RDN2020.com. She asserts that on June 5, 2013, she raised the issue of having written papers drafted to memorialize her 50% ownership/interest in Lead Me and that Goddard assured her that he would do whatever was necessary to that effect, and that he reiterated that assurance in an email the next day. See Exhibit E to Second Amended Complaint (Docket Entry No. 38, at 53). However, written papers showing the Plaintiff's purported ownership interest were never created.

The Plaintiff alleges that, beginning in August 2012, Goddard began to engage in actions for his own self interest and to the detriment of Lead Me by creating and/or operating businesses that directly competed with and diverted business away from Lead Me. She identifies Just One Vision, Inc. ("Just One Vision"), Everyday Business Solutions, Inc. ("Everyday Business Solutions"), and Goddard Enterprises, Inc. ("GEI") as three of these businesses. The Plaintiff alleges that Goddard duplicated Lead Me's proprietary product, RDN2020.com, and registered it as LGA4040.com, created numerous internet domains that copied and were replicated from Lead Me domains, and eventually moved LGA4040.com and the duplicate domains to a hosting server, Net Standard, that he paid for by using Lead Me funds. The Plaintiff contends that all of these action were taken to divert customer orders and business from Lead Me to operations controlled by Goddard. The Plaintiff alleges that Linda Didonato ("Didonato") was the sales manager and a shareholder in Just One Vision and played an active role in diverting business away from Lead Me to Just One Vision.

The Plaintiff alleges that in late 2013 and early 2014, she inadvertently received e-mails that made her aware that BMI Elite Holdings, LLC and/or BMI Ventures, Inc. ("BMI"), one of Lead Me's largest customers, was having its business diverted from Lead Me to Just One Vision. See Exhibits F (Docket Entry No. 38, at 55) and G (Docket Entry No. 38, at 57-58). She asserts that when she confronted Goddard about the matter, he refused to discuss it with her and stated that Brandon Rosen, a BMI officer, knew about the duplicate domain sites and had ordered the redirection of BMI's customers from Lead Me to Just One Vision. The Plaintiff states that she traveled to Tennessee in February of 2014, to personally confront Goddard about his activities and the situation with Lead Me, at which time Goddard declared to her that he was the sole owner of Lead Me, that she was merely a highly compensated employee, and that she was terminated from her employment. The Plaintiff alleges that within 30 minutes of their conversation, Goddard cancelled her access to all Lead Me sites and that she was subsequently sent a letter, dated February 24, 2014, stating that her services were no longer needed by Lead Me and that she would be given a final commission check. See Exhibit H (Docket Entry No. 38, at 60).

On March 25, 2014, the Plaintiff filed this action pursuant to diversity jurisdiction under 28 U.S.C. § 1332 against Goddard, Lead Me, Just One Vision, Everyday Business Solutions, GEI, BMI, Rosen, and Didonato. She sets out 13 specific claims:

1. a request for declaratory judgment as to her legal interest in Lead Me;
2. a claim for breach of fiduciary duty against Goddard under Tenn. Code Ann. § 48-249-407, against Goddard;
3. a claim for breach of the duty of loyalty and care against Goddard under Tenn. Code. Ann. § 61-1-104 and the common law;
4. a claim against Goddard for breach of contract;
5. a claim against Rosen and Didonato for inducement to breach of contract under Tenn. Code Ann. § ...

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