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Gillins v. Celadon Trucking Services Inc.

United States District Court, D. South Carolina, Charleston Division

August 24, 2016

ISAIAH GILLINS, Plaintiff,
v.
CELADON TRUCKING SERVICES, INC., Defendant.

          ORDER

          DAVID C. NORTON UNITED STATES DISTRICT JUDGE

         This matter is before the court on defendant Celadon Trucking Services, Inc.'s (“Celadon”) motion to dismiss. For the reasons set forth below, the court grants the motion in part and denies the motion in part.

         I. BACKGROUND

         Plaintiff Isaiah Gillins (“Gillins”) is a resident of Charleston County, South Carolina, and Celadon is an Indiana corporation with its principal place of business in Indianapolis, Indiana. Compl. ¶¶ 1-2; Notice of Removal ¶ 3(a)(ii). Gillins purportedly entered into an equipment lease agreement (“the Agreement”) with Celadon on August 23, 2012, for the rent-to-own lease of an 18-wheel truck. Compl. ¶ 4. Gillins agreed to pay Celadon for use of the truck at a rate of 25 cents per mile until the Agreement expired. Id. ¶ 5. Celadon, however, terminated Gillins on January 16, 2014, for having too many safety violations on his driving record. Id. ¶ 6. Gillins filed a complaint against Celadon on December 1, 2015, in the Court of Common Pleas for Charleston County, asserting the following causes of action: (1) breach of contract; (2) fraud in the inducement; (3) violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”), SC Code Ann. § 39-5-10, et seq.; (4) unjust enrichment and quantum meruit; and (5) conversion. Id. ¶¶ 1-26. According to Gillins, at the time of termination, he had paid over $100, 000 toward the lease and use of the truck. Id. ¶ 7. In addition to incurring maintenance costs and expenses, Gillins claims he paid roughly $80, 000 at the commencement of the Agreement. Id. Gillins further alleges Celadon deducted approximately $35, 000 from his checks. Id.

         Celadon filed a notice of removal of the action from state court to this court on March 11, 2016, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. ECF No. 1. On March 18, 2016, Celadon filed the present motion to dismiss all causes of action pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing Gillins failed to state any claim upon which relief may be granted. ECF No. 4. Gillins filed a response in opposition to the motion on April 14, 2016, ECF No. 10, and Celadon replied on April 25, 2016. ECF No.

         11. Per the court's instructions, the parties submitted supplemental memoranda addressing what effect, if any, the Agreement's “Applicable Law” provision has on the present motion. ECF Nos. 14, 15. Celadon filed its supplemental brief on July 18, 2016, ECF No. 14, and Gillins filed his response on July 28, 2016. ECF No. 15. On August 12, 2016, the court held a hearing on the motion to dismiss. The motion has been fully briefed and is ripe for the court's review.

         II. STANDARD

         Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss for “failure to state a claim upon which relief can be granted.” When considering a Rule 12(b)(6) motion to dismiss, the court must accept the plaintiff's factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See E.I. du Pont de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir. 2011). But “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). On a motion to dismiss, the court's task is limited to determining whether the complaint states a “plausible claim for relief.” Id. at 679. A complaint must contain sufficient factual allegations in addition to legal conclusions. Although Federal Rule of Civil Procedure 8(a)(2) requires only a “short and plain statement of the claim showing that the pleader is entitled to relief, ” “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). The “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “Facts pled that are ‘merely consistent with' liability are not sufficient.” A Soc'y Without a Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).

         III. DISCUSSION

         Celadon brings a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing Gillins failed to state any claim upon which relief may be granted in his complaint. ECF No. 4. Gillins argues the court should deny Celadon's motion to dismiss or, in the alternative, grant him leave to amend the complaint pursuant to Federal Rule of Civil Procedure 15. ECF No. 10.

         A. Breach of Contract

         Celadon argues Gillins failed to state a claim upon which relief may be granted for breach of contract because his complaint-coupled with the attached copy of the Agreement-demonstrates Gillins entered into a contract with Quality Equipment Leasing, LLC (“Quality Leasing”), not Celadon. According to Celadon, Gillins also failed to sufficiently plead the alleged breaches in his complaint.

         Under South Carolina law, “[t]he elements for breach of contract are the existence of a contract, its breach, and the damages caused by such breach.” Branche Builders, Inc. v. Coggins, 686 S.E.2d 200, 202 (S.C. Ct. App. 2009). “An action for damages for breach of a contract is predicated on the existence of a contract” and, thus, “[i]t necessarily follows that the complaint must contain allegations of a contract and a breach thereof before any damages are recoverable.” Tidewater Supply Co. v. Indus. Elec. Co., 171 S.E.2d 607, 608 (S.C. 1969). “Only parties to a contract may be sued for a breach of contract cause of action.” Murphy v. Jefferson Pilot Commc'ns Co., 657 F.Supp.2d 683, 693 (D.S.C. 2008).

         Celadon focuses heavily upon the fact that the Agreement states it is between Gillins and Quality Leasing, maintaining that this entitles Celadon to dismissal of the action. In other words, Celadon argues it cannot be held liable for breach of a contract to which, in Celadon's view, it was not a party. What Celadon overlooks, however, is that the Agreement is titled “Equipment Lease Agreement (Celadon Lease Purchase Drivers), ” and the address given for the “Lessor” is “One Celadon Drive, 9503 E. 33rd Street, Indianapolis, IN 46236.” ECF No. 1-1 at 9, 16. Given that the name Celadon appears twice on the face of the Agreement, the court finds a perfectly reasonable inference to be drawn is that Quality Leasing is, in some way, related to Celadon. See E.I. du Pont de Nemours, 637 F.3d at 440 (noting the court must draw all reasonable inferences in favor of the plaintiff). Indeed, counsel candidly conceded he was unable to argue that Celadon had absolutely nothing to do with Quality Leasing. Although the court cannot look outside the pleadings and exhibits, or consider counsel's arguments as evidence, the court finds it relevant that Celadon's name appears at the very top of the Agreement and the address provided therein is that of Celadon's corporate headquarters.

         Turning to the merits of his breach of contract claim, Gillins alleges that he entered into the Agreement with Celadon for the rent-to-own-lease of the 18-wheeler truck on August 23, 2012. Compl. ¶ 4. Gillins further asserts that Celadon breached the Agreement between the parties by (1) “failing to refund [Gillins] for monies paid into the truck which were in excess of [$100, 000]”; (2) “failing to discuss safety violations with [Gillins] prior to yearly evaluations”; (3) “retroactively applying a safety violation on [Gillins'] record that should have been time barred under the Agreement”; and (4) “failing to provide [Gillins] with termination paperwork.” Id. ¶ 9. Additionally, Gillins claimed he was entitled to damages resulting from these alleged breaches. Id. ¶¶ 7, 10.

         Based on the foregoing, when accepting the facts in the complaint as true and drawing all reasonable inferences in favor of Gillins, the court finds he has stated a plausible claim for breach of contract in this case. See E.I. du Pont de Nemours, 637 F.3d at 440 (stating the court must accept the plaintiff's factual allegations as true and draw all reasonable inferences in favor of the plaintiff); Iqbal, 556 U.S. at 679 (providing that, on a motion to dismiss, the court's task is limited to determining whether the complaint states a “plausible claim for relief”); Coggins, 686 ...


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