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Pulte Homes Tennessee Limited Partnership v. Pbg of South Carolina, Inc.

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

March 19, 2018

PULTE HOMES TENNESSEE LIMITED PARTNERSHIP, Plaintiff,
v.
PBG OF SOUTH CAROLINA, INC., PALM BEACH GRADING, INC., and EUGENE EICHELBERGER, Defendants.

          MEMORANDUM AND ORDER

          ALETA A. TRAUGER, UNITED STATES DISTRICT JUDGE.

         Pending before the court are two Motions to Dismiss. The first (Docket No. 18) was filed by Palm Beach Grading, Inc. (“Palm Beach Grading”), to which the plaintiff, Pulte Homes Tennessee Limited Partnership (“Pulte”), has filed a Response (Docket No. 26). The second (Docket No. 20) was filed by Eugene Eichelberger, to which Pulte has filed a separate Response (Docket No. 27). For the reasons discussed herein, Palm Beach Grading's motion will be denied and Eichelberger's motion will be granted in part.

         BACKGROUND[1]

         On October 2, 2015, Pulte, a land developer, contracted with PBG of South Carolina, Inc. (“PBG”) for infrastructure improvements and related work on a Tennessee land development known as Southern Springs. The parties signed a Master Land Trade Contractor Agreement (“Agreement”) that called for PBG to perform work on Phases 1 and 2 of the multi-phase development project. Eichelberger, PBG's Vice President, signed the Agreement on behalf of PBG. On January 27, 2016, PBG became a licensed contractor in the state of Tennessee. On February 15, 2016, the Phase 1 Schedules (“Schedules”)-detailing the construction work PBG was to perform during Phase I-were executed by Pulte and PBG and incorporated into the Agreement. Disputes later arose regarding the quality and timeliness of PBG's performance. As a result, Pulte was required to bring in other contractors to complete and correct PBG's work. On August 18, 2017, Pulte terminated the Agreement.

         On August 28, 2017, PBG placed a lien for approximately $1.3 million on the Southern Springs development project, claiming that it had not been paid for labor, equipment, materials, and services related to the project. On September 21, 2017, PBG amended the lien to nearly $1.9 million. Eichelberger signed both liens on behalf of PBG. PBG has not filed suit or otherwise taken action to enforce the lien. On September 1, 2017, Pulte filed its Complaint in this court against PBG, Eichelberger, and Palm Beach Grading, a separate entity which Pulte alleges is an alter ego of PBG (Docket No. 1). On November 7, 2017, Pulte amended its Complaint, bringing a host of charges related to the defendants' performance pursuant to the Agreement. (Docket No. 16.) In addition, Pulte alleges slander of title against the defendants, based on the lien filed by PBG.

         LEGAL STANDARD

         In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court will “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). The Federal Rules of Civil Procedure require only that a plaintiff provide “a short and plain statement of the claim that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957). The court must determine only whether “the claimant is entitled to offer evidence to support the claims, ” not whether the plaintiff can ultimately prove the facts alleged. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

         The complaint's allegations, however, “must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To establish the “facial plausibility” required to “unlock the doors of discovery, ” the plaintiff cannot rely on “legal conclusions” or “[t]hreadbare recitals of the elements of a cause of action, ” but, instead, the plaintiff must plead “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, 678-79 (2009). “[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679; Twombly, 550 U.S. at 556. According to the Supreme Court, “plausibility” occupies that wide space between “possibility” and “probability.” Iqbal, 556 U.S. at 678. If a reasonable court can draw the necessary inference from the factual material stated in the complaint, the plausibility standard has been satisfied.

         ANALYSIS

         On November 28, 2017, Palm Beach Grading and Eichelberger filed separate motions to dismiss. Palm Beach Grading seeks dismissal of the slander of title claim against it. (Docket No. 18.) Eichelberger seeks to dismiss all claims against him. (Docket No. 20.)

         1. Slander of Title Claims

         Slander of title has long been recognized as a tort in Tennessee. Phillips v. Woods, No. E200700697COAR3CV, 2008 WL 836161, at *7 (Tenn. Ct. App. Mar. 31, 2008).

[O]ne may become liable by asserting title in bad faith and without probable cause to the injury of another. Libel of title has been found to occur when a person . . . without privilege to do so, willfully records or publishes matter which is untrue and disparaging to another's property rights in land as would lead a reasonable person to foresee that the conduct of a third party purchaser might be determined by the publication, or maliciously records a document which clouds another's title to real estate. To establish a successful claim for libel of title in this state, a plaintiff must prove: (1) that it has an interest in the property; (2) that the defendant published false statements about the title to the property; (3) that the defendant was acting maliciously, and (4) that the false statements proximately caused the plaintiff a pecuniary loss.

Id. (internal citations and quotation marks omitted). Pulte alleges that all defendants are liable for slander of title. Pulte has pled facts which, if true, would establish a slander of title based on PBG's filing of the lien against Pulte.[2] However, Palm Beach Grading and Eichelberger contend that the absolute privilege doctrine shields them from any potential liability related to the lien. The absolute privilege doctrine protects any defamatory statements of an attorney or litigant “made in the course of a judicial proceeding.” Simpson Strong-Tie Co. v. Stewart, Estes &Donnell, ...


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