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Woodward v. Algie

United States District Court, S.D. Indiana, Indianapolis Division

July 27, 2015

DAVID ALGIE and LINDA ALGIE, Defendants, PARKER WOODWARD, Third-party defendant.


DENISE K. LaRUE, Magistrate Judge.

Plaintiff Loyd Woodward moves to dismiss all of Defendants' counterclaims against him. Counter Complaint by David Algie and Linda Algie etc. [doc. 122] (" Counter Complaint ").[1] He seeks to dismiss the first, second, third, fourth, and sixth causes of action under Fed.R.Civ.P. 12(b)(6), for failure to state a claim. He seeks dismissal of the third cause of action also for failure to plead with particularity, as required under Fed.R.Civ.P. 9(b). Mr. Woodward filed his motion on May 15, 2015 and Defendants have not filed a response. Therefore, the motion is ready for decision, S.D. Ind. L.R. 7-1(c)(2), and is subject to summary ruling, L.R. 7-1(c)(4) ("The Court may summarily rule on a motion if an opposing party does not file a response within the deadline.").

"To survive a motion to dismiss under Rule 12(b)(6), the complaint must provide enough factual information to state a claim to relief that is plausible on its face' and raise a right to relief above the speculative level.'" Camasta, 761 F.3d at 736 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). When reviewing a dismissal for failure to state a claim, we accept all well-pleaded facts as true and view them in a light most favorable to the plaintiff; however, mere conclusory statements are insufficient to survive a motion to dismiss. Camasta, 761 F.3d at 736. "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

Doe v. Village of Arlington Heights, 782 F.3d 911, 914-15 (7th Cir. 2015). Snyder v. Smith, 7 F.Supp.3d 842 (S.D. Ind. 2014); Lineback v. Printpack, Inc., 979 F.Supp. 831 (S.D. Ind. 1997) (quoting Chakonas v. City of Chicago, 42 F.3d 1132, 1134 (7th Cir. 1994)). On a motion to dismiss for a Rule 9(b) deficiency, a court also reads the complaint generously and draws all reasonable inferences in favor of the plaintiff. Siegel v. J & H Marsh & McLennon, Inc., 159 F.Supp.2d 1118, 1125 (N.D. Ill. 2001).

First cause of action: promissory estoppel. Defendants allege that Loyd Woodward repeatedly offered financial support to the LP1 project, first as a partner and, later, as an investor. Counter Complaint ¶¶ 7 and 8. Defendants allege that they were "eventually persuaded, " by his enthusiasm for the project and his promise "to market the unique LP1 on Algies' behalf, " to accept his offer of financial support as an investor. They were "ultimately swayed by Woodward's promise to fly the LP1 to air shows all over the country and to handle all the promoting [marketing] for Algie." Id. ¶ 8 (original brackets). Defendants allege that they considered Woodward's funding offer "almost solely based on, " his promise to fly the aircraft to shows, "which was huge exposure and promotion." Id.

In their first cause of action, for promissory estoppel, Defendants claim that they "relied on Woodward's promises which induced Algie into acceptance of Woodward's offer based on those promises." They "accepted Woodward's offer based solely on promised performance." Later, Woodward said that he would never fly the LP1 to air shows, and his refusal allegedly has caused Defendants injury. Id. ¶¶ 34 and 36. The Counter Complaint alleges that Defendants' acceptance of Mr. Woodward's offer of investment, in reasonable reliance on his promise to fly the aircraft to air shows, which promise was made with the expectation that Defendants would rely thereon and caused injury and injustice that can be avoided only by enforcing the promise, states the elements of a promissory estoppel action under Indiana law and entitles them to actual damages. Id. ¶¶ 33 and 36.

Plaintiff moves to dismiss Defendants' cause of action for promissory estoppel on one ground: "the existence of an express contract forecloses recovery under a theory implied in law" and Defendants admitted in their answer that "a valid contract exists." ( Plaintiff's [Rules] 12([b])(6) and 9([b]) Motion To Dismiss [doc. 133] (" Motion ") at 2.) Plaintiff is correct that, in Indiana law, recovery under the doctrine of promissory estoppel is available only when no valid express contract exists. Zoeller v. East Chicago Second Century, Inc., 904 N.E.2d 213, 221 (Ind. 2009); Fiederlein v. Boutselis, 952 N.E.2d 847, 857 (Ind.Ct.App. 2011) ("Both claims of promissory estoppel and unjust enrichment permit recovery where no express contract or contract in fact exists.").

Plaintiff cites Defendants' answer to ¶ 7 of his original complaint as their admission that a valid contract existed. That paragraph alleges:

After there had been some dialogue between Woodward and David Algie, David Algie approached and solicited Woodward to assist with the development, production, marketing and sale of a kitplane that is identified as the "LP1". Initially, Woodward declined participation, and upon information and belief, David Algie solicited help, primarily financial help, from others, who also declined participation. Woodward and David Algie continued to dialogue though, and ultimately an agreement was reached which was memorialized into a Contract Agreement by Woodward (the "Contract Agreement"), and executed by all parties herein.

Plaintiff Loyd Woodward's Original Complaint [doc. 1] (" Complaint "), ¶ 7. Defendants answered:

Defendants admits [ sic ] entering into a written contract with Plaintiff Woodward. All other allegation [ sic ], statements or suggestions in paragraph 7 are denied, being false or reversed.

Answer [doc. 77], ¶ 7.

On a literal basis, Defendants' answer does not admit that "a valid contract exists, " as asserted by Plaintiff. First, the Complaint alleges only that the parties reached an "agreement" which was "memorialized" into the one-page document titled "Contract Agreement." It does not allege that the parties' agreement or the memorialization into the "Contract Agreement" is a valid legal contract. Also, Defendants' answer only admits that Defendants executed a written contract with Plaintiff, as pled, not that that agreement, the "Contract Agreement, " satisfies the legal criteria for validity and enforceability.

Second, liberally construing Defendants' pro se answer, as the Court must, Ambrose v. Roeckeman, 749 F.3d 615, 618 (7th Cir. 2014), and considering their pleadings and filings as a whole, Schnitzler v. United States, 761 F.3d 33, 38 (D.C. Cir. 2014); Johnson v. Interstate Management Co., L.L.C., 962 F.Supp.2d 244, 250 (D.C. D.C. 2013), it is apparent that Defendants do not admit that the "Contract Agreement" is a valid contract. See, e.g., Counter Complaint, ¶¶ 9 ("a very basic and somewhat vague contract agreement"), 11 ("It is to be noted that within the agreement, composed by Woodward, no provision, clause or stipulation for repayment or recoupment of the funding, marketing [promotion/advertising] expenses or any other expenses incurred by Woodward is stated. The agreement is silent on those issues.") (original brackets), and 12 ("However [Woodward's post-agreement proposal for profit or recoupment of his financing] was never reduced to a written agreement nor any other reimbursement, compensation or commission was ever discussed or reduced to writing. In fact now that Algie has had time and by necessity, to research contractual requirements, it would appear the requirement of consideration' for Woodward is missing. So the question arises, is this even an enforceable contract?"); id., Exhibit A-5, "The Woodward Plan" [doc. 122-5] at 12 ("[Loyd Woodward's] contract with me did not have anything ...

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