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Pisgah Laboratories, Inc. v. Mikart, Inc.

United States District Court, W.D. North Carolina, Asheville Division

March 5, 2015

MIKART, INC., Defendant.



THIS MATTER is before the Court on the Defendant's Motion to Dismiss [Doc. 10]; the Magistrate Judge's Memorandum and Recommendation [Doc. 16] regarding the disposition of said motion; the Defendant Mikart, Inc.'s Objection to the Memorandum and Recommendation [Doc. 17]; and the Plaintiff's Response in Opposition to the Defendant's Objection [Doc. 18].


The Plaintiff Pisgah Laboratories, Inc. ("Plaintiff") brought this action against the Defendant Mikart, Inc. ("Defendant") in relation to a business contract between the parties. [Doc. 1-2]. The Plaintiff has asserted claims for breach of contract, fraud, and unjust enrichment in the alternative. [Id.] The Defendant removed the case to this Court on June 5, 2014. [Doc. 1]. On June 10, 2014, the Defendant moved to dismiss the Plaintiff's breach of contract and fraud claims. [Doc. 10].

Pursuant to 28 U.S.C. § 636(b) and the Standing Orders of Designation of this Court, the Honorable Dennis L. Howell, United States Magistrate Judge, was designated to consider the Defendant's Motion to Dismiss and to submit a recommendation regarding its disposition. On January 30, 2015, the Magistrate Judge entered a Memorandum and Recommendation in which he recommended that the Court should deny the Defendant's motion. [Doc. 16]. The Defendant filed objections to the Court's Memorandum and Recommendation. [Doc. 17].

Having been fully briefed, this matter is ripe for disposition.


The Federal Magistrate Act requires a district court to "make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1). In order "to preserve for appeal an issue in a magistrate judge's report, a party must object to the finding or recommendation on that issue with sufficient specificity so as reasonably to alert the district court of the true ground for the objection." United States v. Midgette, 478 F.3d 616, 622 (4th Cir. 2007). The Court is not required to review, under a de novo or any other standard, the factual or legal conclusions of the magistrate judge to which no objections have been raised. See Thomas v. Arn, 474 U.S. 140, 150 (1985). Additionally, the Court need not conduct a de novo review where a party makes only "general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendations." See Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982).


As the Magistrate Judge properly noted, "[t]he central issue for resolving a Rule 12(b)(6) motion is whether the claims state a plausible claim for relief." [Doc. 16 at 5 (citing Francis v. Giacomelli, 588 F.3d 186, 189 (4th Cir. 2009))]. This Court views "the allegations in the Complaint as true and construes them in the light most favorable to [the] Plaintiff." [Id. at 2 (citing Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 253 (4th Cir. 2009); Giacomelli, 588 F.3d at 190-92).] Indeed, "[t]he claims need not contain detailed factual allegations, ' but must contain sufficient factual allegations to suggest the required elements of a cause of action." [Id. at 6, citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also, 591 F.3d at 256]. Further, "[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." [Doc. 16 at 6 (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)].

Additionally, the Magistrate Judge noted that fraud allegations must satisfy the heightened pleading standards of Rule 9. [Doc. 16 at 7 (citing Cozzarelli v. Inspire Pharmaceuticals Inc., 549 F.3d 618, 629 (4th Cir. 2008); Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007)]. The circumstances constituting fraud or mistake must be alleged with particularity, according to Rule 9(b). Fed.R.Civ.P. 9(b).

A. Breach of Contract Claim

The Plaintiff argues that the Magistrate Judge's recommendation should not be adopted because the Plaintiff's Complaint failed to state a claim for breach of contract. [Doc. 17 at 4]. Particularly, the Defendant argues that the Plaintiff did not "identify a single, specific covenant or representation in the Proposal that it contends Mikart breached." [Doc. 17 at 5]. The Defendant further argues that the Plaintiff's Complaint "does not and cannot allege... the final or controlling version of the continually changing timeline" which the Plaintiff referenced in alleging its breach of contract claim. [Doc. 17 at 5-6].

A Rule 12(b)(6) motion "does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). For a breach of contract claim, a plaintiff must allege (1) the existence of a valid contract and (2) a breach of the terms of that ...

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