United States District Court, E.D. Tennessee, Greeneville Division
LEON JORDAN, District Judge.
There are two dispositive motions before the Court [doc. 32, 38]. First, Plaintiff and Counter-Defendant filed a Motion to Dismiss the Defendant and Counter-Plaintiff's Second Counterclaim [doc. 32]. The movant, Mr. Jones (hereafter "Jones"), submitted a supporting brief [doc. 33], Mr. Van Duyn (hereafter "Van Duyn") submitted a responsive brief [doc. 41], and Jones submitted a reply [doc. 43].
Jones also filed a Motion for Summary Judgment [doc. 34] and a supporting brief [doc. 35] addressing Van Duyn's first counterclaim. Jones later submitted an Amended Motion for Summary Judgment [doc. 38]. The Amended Motion [doc. 38] incorporates the material of the original motion [doc. 34]. Van Duyn submitted a response [doc. 42] and Jones submitted a reply [doc. 44].
Oral argument is unnecessary, and both motions are ripe for the Court's determination. For the reasons stated herein, the Motions [docs. 32, 38] will be granted.
I. RELEVANT FACTS AND BACKGROUND
The present Action stems from a now-closed civil suit in the Chancery Court for Greene County, Tennessee. To briefly state the facts of that case, Van Duyn alleged that his personal property was damaged while it was being stored on Jones's commercial real property in Greeneville, Tennessee. Jones owned the real property, but he did not rent it directly to Van Duyn. Rather, Jones had a lease agreement with Electronic Innovations (hereafter "EI"), which subleased a portion of the property to Van Duyn for a period of one year beginning in 2007. Van Duyn used the space to store antique auto parts and other equipment that he used for his business. The relationship between Van Duyn and EI eventually soured and Van Duyn filed suit against EI and the realtor who arranged the lease in the Chancery Court.
In his lawsuit, Van Duyn claimed that his equipment had been contaminated by environmental waste on the property. He alleged that EI had breached a duty to disclose to him that the property was known to be contaminated and was the subject of a Brownfields Agreement. He alleged that he would not have rented space there if he had been privy to that information. Van Duyn also claimed that the sublease he entered with EI was invalid because it was for a one year period, while EI only had a month-to-month lease. He later amended his complaint to add Jones as a defendant, alleging that Jones's failure to maintain the property resulted in water damage to his belongings.
The pleadings are facially unclear as to whether Van Duyn intended to make claims for contamination damage against Jones. Pointing this lack of clarity out to the Chancery Court, Jones nevertheless defended against such claims in a motion for summary judgment. Jones argued that (1) he did not have any duty to disclose the Brownfields Agreement and (2) that he was not liable for any alleged contamination damage. On November 2, 2012, the Chancery Court found that Jones did not have a duty to disclose the Brownfields Agreement. The court reserved the liability issue. On May 24, 2013, the court entered a final order determining that Van Duyn had failed to plead any claim for contamination damage against Jones. The court affirmed the previous order of summary judgment and dismissed Jones from the law suit.
In 2013, Jones filed this Action, alleging malicious prosecution and seeking recovery of the legal fees he incurred defending himself from Van Duyn's claims. Van Duyn counterclaimed, alleging that Jones (1) breached a duty to disclose the contamination on the leased property, and (2) "breached his duty to disclose the fact that Electronic Innovations did not have legal right to lease the property to [Van Duyn] for more than a month." Van Duyn claims that those breaches proximately caused the damage to his personal property. The water damage claims that Van Duyn alleged in the Chancery Court are not at issue in this Action.
II. JONES'S MOTION TO DISMISS VAN DUYN'S SECOND COUNTERCLAIM
A. Standard of Review
Federal Rule of Civil Procedure 8 (a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957). Detailed factual allegations are not necessary, but the party's "obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions." Twombly, 550 U.S. at 555. "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." Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). "[A] formulaic recitation of the elements of a cause of action will not do, " neither will "naked assertion[s]' devoid of further factual enhancement[, ]" nor "an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 677 (quoting Twombly, 550 U.S. at 570).
B. Law and Analysis
Jones files this Motion to Dismiss [doc. 32] the second counter-claim under F.R.C.P. Rule 12(b)(6). To summarize the parties' positions, Jones argues that he did not have a duty to notify Van Duyn of the terms of the agreement between Jones and EI. Van Duyn responds that Jones had a duty to disclose because there was privity of estate between the parties. He asserts that an agreement transferring the sublessor's lease for its entire term amounts to an assignment and creates privity with the original lessor. Because EI's lease to Van Duyn exceeded its own rights in the property, privity arose and created a duty for Van Duyn to disclose the terms of the original lease. Jones views his legal status as ...