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MK Strategies, LLC v. Ann Taylor Stores Corp.

December 6, 2007

MK STRATEGIES, LLC PLAINTIFF,
v.
ANN TAYLOR STORES CORPORATION AND THE TOWER GROUP, INC. DEFENDANTS.



The opinion of the court was delivered by: Honorable Joseph E. Irenas

OPINION

This matter appears before the Court on a Fed. R. Civ. P. 12(b)(6) motion to dismiss the Complaint. Because the Complaint fails to allege facts sufficient to sustain a cause of action either for breach of an express contract or unjust enrichment, the motion will be granted, with leave to amend.

I.

In 2006 Defendant, The Tower Group, Inc. ("Tower"), contracted with Plaintiff, MK Strategies, LLC ("MK"), a software firm, to perform certain services as a subcontractor on a project that Tower had contracted to perform for Defendant, Ann Taylor Stores Corporation ("Ann Taylor").*fn1 (Compl. ¶ 10). MK alleges that its agreement with Tower was embodied in both oral and email communications between the two contracting parties. (Id. ¶ 11). Detailed invoices were provided to Tower for the subcontract service MK performed on the Ann Taylor project. (Id. ¶ 16).

MK alleges that the invoices dated from September 26, 2006 through October 22, 2006 remain unpaid with an outstanding balance of $83,370.33. (Id. ¶¶ 17-18). Tower's failure to pay the outstanding invoices, according to Plaintiff, constitute a breach of its contract with MK. (Id. ¶ 19). In turn, MK filed a Complaint on May 30, 2007, seeking judgment in its favor and against Tower and Ann Taylor for the balance of the unpaid invoices tendered to Tower.

Count One pleads only a breach of the contract between Tower and MK, but the prayer for relief also seeks judgment against Ann Taylor for the unpaid invoices sent by MK to Tower. In Count Two MK seeks the same relief on the theory of unjust enrichment. The gravamen of Count Three is that Ann Taylor employees supervised some of the work MK was performing on its Tower contract, and, by doing so became liable to MK for Tower's indebtedness.

In response to Plaintiff's Complaint, on July 27, 2007, Ann Taylor filed this motion to dismiss under Fed. R. Civ. P. 12(b)(6).*fn2 For the reasons set forth below, we will grant Ann Taylor's motion to dismiss in its entirety, with leave to file an amended complaint.

II.

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must allege facts sufficient to support the legal elements of his claims or to permit inferences to be drawn that these elements exist. See Fed. R. Civ. P. 8(a)(2); Conley v. Gibson, 355 U.S. 41, 45-46 (1957). While a court must accept as true all allegations in the plaintiff's complaint, and view them in the light most favorable to the plaintiff, a court is not, however, required to accept sweeping legal conclusions cast in the form of factual allegations, unwarranted inferences, or unsupported conclusions. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). If, after viewing the allegations in the complaint in the light most favorable to the plaintiff, it appears beyond doubt that "no relief could be granted under any set of facts that could be proved consistent with the allegations," a court may dismiss the complaint. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

III.

Traditionally, a federal district court sitting in diversity must apply the choice-of-law rules of the forum in which it sits. See Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496-97 (1941). Absent from either party's briefing is an argument that a conflict exists between the substantive law of the forum, New Jersey, and the substantive law of the jurisdictions in which Plaintiff performed computer services for the Ann Taylor project, i.e., New York and Connecticut.*fn3 Both Defendant and Plaintiff cite case law from New Jersey, New York, and Connecticut. Because neither party argues that there is any difference in the laws of these three states which might affect the issues raised by the Complaint, the Court need not engage in the choice-of-law analysis generally required. See National Ass'n of Sporting Goods Wholesalers, Inc. v. F.T.L. Marketing Corp., 779 F.2d 1281, 1284 (7th Cir. 1985)("a determination of the applicable state law is not required in this case, because where parties fail to raise a possible conflict of substantive laws . . . the substantive law of the forum controls."). Thus, as the Third Circuit has made clear, "[w]hen such a situation arises in a diversity case, the laws of each unpleaded jurisdiction are presumed to be identical to the law of the forum [New Jersey] on all issues. 'Stated in another manner, unless the parties argue otherwise, it is assumed that the law of the forum and the laws of the applicable jurisdiction are in substance the same.'" Simon v. U.S., 341 F.3d 193, 198 (3d. Cir. 2003)(quoting National Ass'n of Sporting Goods Wholesalers, Inc., 779 F.2d at 1285 (7th Cir. 1985)). Consequently, this Court will apply the substantive law of New Jersey.

IV.

A.

MK alleges Tower is in breach of its contract when it failed to pay Plaintiff for services performed on the Ann Taylor project. (Compl. ΒΆΒΆ 18-19). Throughout Count One, there is no mention of a contract between MK and Ann Taylor. However, MK includes ...


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