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Field Smart Lighting Co., Ltd. v. Checkolite International, Inc.

United States District Court, D. New Jersey

May 22, 2014

FIELD SMART LIGHTING CO., LTD., Plaintiff,
v.
CHECKOLITE INTERNATIONAL, INC., LEON BIBI, LAWRENCE BIBI, and REUBEN BIBI, Defendants.

OPINION

WILLIAM J. MARTINI, District Judge.

This is a breach of contract and fraudulent transfer case. Claiming that it is owed money by Checkolite International, Inc. ("Checkolite"), and its officers, Leon Bibi, Lawrence Bibi, and Reuben Bibi (the "Bibi Parties") (together with Checkolite "Defendants"), Plaintiff Field Smart Lighting, Inc. ("Field Smart") filed a seven count Complaint alleging, inter alia, breach of contract and fraudulent transfer. Defendants move pursuant to Federal Rule of Civil Procedure 12(b)(1) to dismiss the Complaint for lack of standing. Defendants also move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Counts IV-VII of the Complaint for failure to state a claim. Field Smart cross-moves for expedited discovery under Federal Rule of Civil Procedure 26(d)(1). There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, Defendants' Rule 12(b)(1) motion is DENIED. Defendant's Rule 12(b)(6) motion is GRANTED IN PART, and DENIED IN PART. Field Smart's cross-motion is DENIED.

I. BACKGROUND

The Complaint alleges as follows. Field Smart is a Chinese corporation. Compl. ¶ 2, ECF No. 1. Checkolite is a New Jersey corporation. Id. ¶ 3. Leon Bibi is or was the Chief Executive Officer of Checkolite, Lawrence Bibi is or was the President of Checkolite, and Reuben Bibi is or was an officer, director, shareholder, or General Partner of Checkolite. Id. ¶¶ 6-8. From December 2012 through February 2013, Checkolite bought lighting equipment from Field Smart. Id. ¶ 1. Checkolite's orders totaled $351, 969.44. Id. ¶ 10. Field Smart provided the equipment but Checkolite refused to pay. Id. On May 31, 2013, Field Smart and Checkolite entered into a settlement agreement in which Checkolite promised to pay its full bill in a series of installments. Id. ¶ 23. Checkolite failed to honor the settlement agreement, claiming insolvency. Id. ¶ 16. Field Smart alleges that after Checkolite entered into its alleged state of insolvency, it continued to pay the Bibi Parties compensation and bonuses. Id. ¶ 17.

According to a certification submitted by Qian Fuming, a Field Smart officer, Field Smart has no offices or employees in New Jersey, it has never placed advertisements in New Jersey, and it has never participated in trade shows in New Jersey. Fuming Cert. ¶¶ 3-5. Fuming also represents that Checkolite emailed its orders from its New Jersey office to Field Smart, which received the emails in China. Id. ¶ 9. Finally, Fuming represents that Field Smart shipped Checkolite's orders to an address in Mexico. Id. ¶ 10.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998) (citing Warth v. Seldin, 422 U.S. 490, 501 (1975)).

Although a complaint need not contain 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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, such that it is "plausible on its face." See id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). 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). While "[t]he plausibility standard is not akin to a probability requirement'... it asks for more than a sheer possibility." Id. at 678. "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.'" Id. at 662 (quoting Twombly, 550 U.S. at 557).

Federal Rule of Civil Procedure 12(b)(1) provides for the dismissal of a complaint for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). There are two types of challenges to subject-matter jurisdiction: (1) facial attacks, which challenge the allegations of the complaint on their face; and (2) factual attacks, which challenge the existence of subject-matter jurisdiction, quite apart from any pleadings. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). In reviewing a factual attack, like the one in this case, the court may consider evidence outside the pleadings, and no presumptive truthfulness attaches to the plaintiff's allegations. Gould Electronics Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000); Gotha v. United States, 115 F.3d 176, 178-79 (3d Cir. 1997). The plaintiff bears the burden of proving that jurisdiction exists. Gould Electronics, Inc. v. United States, 220 F.3d 169, 178 (3rd Cir. 2000).

Rule 9(b) provides: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally."

III. DISCUSSION

The Complaint contains seven counts. Counts I-III are directed at Checkolite only. Count I is a claim for breach of contract. Count II is a claim for unjust enrichment. Count III is a claim for quantum meruit. Counts IV-VII are directed at all of the Defendants. Count IV is a claim for violation of the uniform fraudulent transfer act. Count V is a claim for an accounting of all monies paid or other assets transferred by or on behalf of Checkolite to the Bibi Parties. Count VI is a claim for common law fraud. Count VII is a claim for civil conspiracy. Defendants move to dismiss the Complaint pursuant to Rule 12(b)(1) for lack of standing. Defendants also move to dismiss Counts IV-VII pursuant to Rule 12(b)(6) for failure to state a claim. Field Smart cross-moves for expedited discovery.

A. Defendants' Motions

1. Rule 12(b)(1) Motion ...


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