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J & J Sports Productions, Inc. v. Kikalos

United States District Court, N.D. Indiana

May 21, 2015

J & J SPORTS PRODUCTIONS, INC., Plaintiff/Counter-Defendant,
SHEILA M. KIKALOS, individually and d/b/a VALLA DEL SOL a/k/a VILLA DEL SOL, Defendant/Counter-Plaintiff.



This matter is before the Court on the Plaintiff's Motion to Dismiss Defendant's Counterclaim for Failure to State a Claim [ECF No. 10] and accompanying Brief in Support [ECF No. 11], filed on October 20, 2014. The Plaintiff/Counter-Defendant, J & J Sports Productions, Inc., asks the Court to dismiss the counterclaim filed by Defendant/Counter-Plaintiff Sheila M Kikalos, individually and d/b/a/Valla Del Sol a/k/a Villa Del Sol. The Defendant/Counter-Plaintiff filed a Response [ECF No. 14] on November 6, 2014. The Motion is now fully briefed and ripe for ruling. For the reasons stated in this Opinion and Order, the Court will deny the Plaintiff/Counter-Defendant's Motion.[1]


The Plaintiff, J & J Sports Productions, Inc. ("J & J Sports"), is a company that licenses sports programming for viewing by television audiences. Valla Del Sol, also known as Villa Del Sol, is a commercial establishment located in Merrillville, Indiana, that the Plaintiff alleges is owned and operated by the Defendant, Sheila M. Kikalos. The Plaintiff alleges that it possessed the exclusive nationwide commercial distribution rights to the Manny Pacquiao versus Timothy Bradley, WBO World Welterweight Championship Fight Program ("Pacquiao Program") that was broadcast nationwide via closed-circuit television on Saturday, June 9, 2012. The Plaintiff alleges that it entered into sub-licensing agreements with various commercial establishments to permit public exhibition of the Pacquiao Program, and that the Defendant unlawfully intercepted and exhibited the Pacquiao Program in her establishment without the Plaintiff's authorization.

The Plaintiff filed a three-count Complaint [ECF No. 1] on June 5, 2014, alleging conversion and violations of 47 U.S.C. ยงยง 553 and 605, for which the Plaintiff seeks compensatory and punitive damages as well as attorneys' fees. In addition to denying the allegations in her Answer [ECF No. 9], filed on September 26, 2014, the Defendant filed a Counterclaim against the Plaintiff alleging fraud based on the same facts and circumstances alleged in the Plaintiff's Complaint. At issue is whether the Counterclaim should be dismissed for failure to state a claim.


A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint and not the merits of the suit. Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). The court presumes all well-pleaded allegations to be true, views them in the light most favorable to the plaintiff, and accepts as true all reasonable inferences to be drawn from the allegations. Whirlpool Fin. Corp. v. GN Holdings, Inc., 67 F.3d 605, 608 (7th Cir. 1995).

The Supreme Court has articulated the following standard regarding factual allegations that are required to survive dismissal:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks, ellipsis, citations, and footnote omitted). A complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Id. at 570. "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, 678 (2009) (citing Twombly, 550 U.S. at 556).

Additionally, when pleading fraud, the federal rules set a higher bar. Federal Rule of Civil Procedure 9(b) states that in fraud cases, "a party must state with particularity the circumstances constituting fraud." The Seventh Circuit has stated that Rule 9(b) "effectively carves out an exception to the otherwise generally liberal pleading requirements under the Federal Rules." Graue Mill Dev. Corp. v. Colonial Bank & Trust Co. of Chi., 927 F.2d 988, 992 (7th Cir. 1991). To satisfy the requirement of Rule 9(b), a plaintiff pleading fraud must state "the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff.'" U.S. ex rel. Grenadyor v. Ukrainian Vill. Pharmacy, Inc., 772 F.3d 1102, 1106 (7th Cir. 2014) (quoting Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677, 683 (7th Cir. 1992)). Stated differently, a plaintiff pleading fraud must describe "the who, what, when, where, and how of the fraud." Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 950 (7th Cir. 2013) (internal quotation marks and citation removed).


A. Fraud

The Defendant asserts a counterclaim of fraud against the Plaintiff, which the Plaintiff moves to dismiss for failure to state a claim. To ...

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