United States District Court, S.D. Indiana, Indianapolis Division
ENTRY ON DEFENDANTS' MOTIONS TO DISMISS
WILLIAM T. LAWRENCE, District Judge.
This cause is before the Court on three motions to dismiss filed by the Defendants (dkt. nos. 23, 27, and 51). These motions are fully briefed,  and the Court, being duly advised, resolves them as set forth below.
I. APPLICABLE STANDARD
The Defendants move to dismiss the Plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that the Complaint fails to state a claim for which relief can be granted. In reviewing a Rule 12(b)(6) motion, the Court "must accept all well pled facts as true and draw all permissible inferences in favor of the plaintiff." Agnew v. National Collegiate Athletic Ass'n, 683 F.3d 328, 334 (7th Cir. 2012). For a claim to survive a motion to dismiss for failure to state a claim, it must provide the defendant with "fair notice of what the... claim is and the grounds upon which it rests." Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007)) (omission in original). A complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Agnew, 683 F.3d at 334 (citations omitted). A complaint's factual allegations are plausible if they "raise the right to relief above the speculative level." Bell Atlantic Corp v. Twombly, 550 U.S. 544, 556 (2007).
The facts set forth in the Plaintiffs' Complaint are as follow.
In 1998, Plaintiff Phyllis Maschino opened High Value Metal, Inc. ("High Value"), a metal fabrication business in Seymour, Indiana. In 1999, she purchased several pieces of sand blasting equipment ("the Blasting Equipment") and constructed a building addition at 101 Blish Street A, Seymour, Indiana ("the Blast Shop Facility"). Her new sand blasting business was named New Blast, LLC. Maschino's daughter and son-in-law, Plaintiffs Rebecca Ritz and Johnny Brasington, ran High Value; Maschino's other daughter, Defendant Tex Wayt, and her husband, Defendant Ed Wayt (collectively, "the Wayts"), ran the Blast Shop Facility.
In 2007, Defendant Marshall Royalty became the owner of High Value's competitor, Defendant Crane Hill Machine & Fabrication, Inc. ("Crane Hill"). Realizing the Blast Shop Facility held a competitive advantage over Crane Hill because of its size and location, in 2012, Royalty and others commenced a scheme to obtain the Blast Shop Facility and High Value's customers in order to increase Crane Hill's business throughout the Midwest.
On March 30, 2012, Royalty entered into a Bill of Sale with Tex and Ed Wayt to purchase the Blasting Equipment for $145, 000. Royalty then met with Maschino and gave her a lease agreement to sign so he could rent the Blast Shop Facility. After explaining that Tex and Ed Wayt did not own the Blasting Equipment and that she was not interested in leasing the Blast Shop Facility to Royalty, Royalty said "the deal is off." Tex Wayt returned Royalty's check to him. Maschino then obtained legal counsel to ensure her ownership of the Blasting Equipment and the Blast Shop Facility.
However, the following day, on April 1, 2012, Royalty hired Tex Wayt and Daniel Macintosh to run the Blast Shop Facility for him. When Maschino became aware of this, she changed the locks and had Ritz and Brasington assume control of the Blast Shop Facility. She then inventoried the property at the Blast Shop Facility in order to determine which property was hers and which property belonged to Royalty and Crane Hill. On July 13, 2012, Royalty retrieved the property he had placed in the Blast Shop Facility.
Royalty, therefore, had to resort to a different course of action in order to obtain High Value and the Blast Shop Facility's customers-false and deceptive advertising. Royalty and Ed Wayt began telling others that the Blast Shop Facility was closed or that Royalty had purchased it and moved it to Crane Hill's facility. They placed signs indicating this fact along highways in the Seymour, Indiana area. They also redirected all mail to be delivered to the Blast Shop Facility to Tex and Ed's home, transferred the Blast Shop Facility's telephone number to one owned by Crane Hill, and falsely advertised the wrong phone number on the Blast Shop Facility's website.
On August 31, 2012, Maschino sued Royalty, Tex, and Ed in Jackson Superior Court for, among other claims, theft and constructive fraud based on their unauthorized and deceptive use of the Blast Shop Facility. On the same day, Royalty filed suit against Maschino for criminal conversion, replevin, and negligence. Defendant William Braman and his law firm, Defendant Montgomery Elsner Pardieck, LLP, represented Crane Hill and Royalty; Defendant Jeffrey Lorenzo and his law firm, Defendant Lorenzo & Bevers, represented Tex and Ed Wayt.
In support of his suit, Royalty filed a false affidavit claiming he was the owner of the Blasting Equipment and that Maschino had failed to return certain other pieces of his property. During the pre-judgment possession hearing on November 20, 2012, however, Royalty testified that the motive behind his lawsuit was to retaliate against Maschino, and he admitted that his affidavit was false, including his allegation that he owned the Blasting Equipment. Thus, the court awarded Maschino pre-judgment possession of the property at issue.
Maschino filed for summary judgment on April 4, 2013. On April 16, 2013, Royalty offered to settle the lawsuit; Maschino rejected the offer on April 23, 2013. On May 14, 2013, Royalty filed a response to Maschino's motion for summary judgment, agreeing that Maschino was entitled to partial summary judgment because she owned the Blasting Equipment and did return some of his property; however, he opposed Maschino's motion for attorney's fees and maintained that other pieces of his property were not returned. In support, Royalty filed another false affidavit. On July 29, 2013, the court awarded partial summary judgment to Maschino, finding Royalty's claim of ownership over the Blasting Equipment to be frivolous; however, it denied the motion with respect to other pieces of property as it found issues of fact remained as to who owned them, and it took the attorney's fees issue under advisement.
On May 17, 2013, the Wayts filed a motion for leave to add a counterclaim; the counterclaim was identical to the suit Royalty filed against Maschino in 2012.
On July 10, 2013, Maschino filed a motion for a preliminary injunction to stop the false and deceptive advertising. In response Royalty submitted two false affidavits on August 15, 2013. Despite Maschino's motion, Royalty and Crane Hill continued to falsely advertise that the Blast Shop Facility was closed or had been relocated to Crane Hill's facility.
On August 28, 2013, Royalty filed a motion to correct error in order to submit another false affidavit. This motion was denied on September 6, 2013.
In the spring of 2014, Royalty employed another law firm to file interrogatories and certain requests for production that focused on the ownership of the Blasting Equipment. After Maschino informed the law firm that this issue had been resolved by the court's partial summary judgment ruling, the interrogatories and requests were not served.
On April 25, 2014, the Plaintiffs filed their Complaint in this Court. Their Complaint sets forth eight counts against the Defendants: 1) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); 2) a claim brought pursuant to Indiana law for unfair and deceptive business practices;
3) a claim brought pursuant to the Indiana Racketeer Influence & Corrupt Organizations ("RICO") statute; 4) a claim brought pursuant to Indiana's Civil Recovery for Crime Victim's Act ("CVA"); 5) a malicious prosecution claim; 6) an abuse of process claim; 7) a claim for intentional ...