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CitiSculpt LLC v. Advanced Commercial Credit International (ACI) Ltd.

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

February 17, 2017

CitiSculpt, LLC, Plaintiff,
v.
Advanced Commercial Credit International ACI Limited, d/b/a ACI Capital Partners, Defendant.

          OPINION AND ORDER

          Bruce Howe Hendricks United States District Judge

         This matter is before the Court on Defendant Advanced Commercial Credit International (ACI) Limited, doing business as ACI Capital Partners' (“ACI”), Motion to Dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 10.) The motion is granted without opposition; all causes of action are dismissed without prejudice, and the case is closed.

         BACKGROUND

         Plaintiff CitiSculpt (“CitiSculpt”) is under contract with the owner of certain real property located in the State of South Carolina, County of Greenville, to purchase said property (“10 S Academy Street”). CitiSculpt and ACI entered into an agreement, entitled “Letter of Interest / Term Sheet, ” regarding a potential financing arrangement for the real estate purchase (the “Agreement”). (Ex. B, Compl., ECF No. 1-2.) In the Complaint, CitiSculpt alleged that ACI engaged in fraud in the inducement by representing that it was “ready, willing and able to fund . . . $7, 770, 000.00 in [an] escrow account” to finance the real estate purchase, when in actual fact ACI “knew that it did not possess the monies, but represented it did.” (ECF No. 1 ¶¶ 25-35.) CitiSculpt further claimed that ACI engaged in negligent misrepresentation by “falsely represent[ing] that it, or its assigns, would fund the escrow with the $7, 770, 000.00 loan to [CitiSculpt] on or before December 15, 2016.” (Id. ¶¶ 36-44.) Finally, CitiSculpt alleged that the Agreement was a contract, and that ACI breached the contract both by failing to fund the escrow account and by acting as a “broker” in that it attempted to find alternate financing sources in contravention of a “Fee Agreement” CitiSculpt maintained with third-party, M&T Realty Capital Corporation, of which ACI had knowledge. (Id. ¶¶ 45-51.)

         ACI filed its Motion to Dismiss on January 31, 2017. (ECF No. 10.) The deadline for CitiSculpt's response, if any, was February 14, 2017. That date has come and gone without any response from CitiSculpt. Accordingly, this matter is ripe for review on the Motion to Dismiss.

         LEGAL STANDARD

         A plaintiff's complaint should set forth “a short and plain statement . . . showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 “does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. 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.” Id. (quoting Twombly, 550 U.S. at 556)). In considering a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a court “accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff. . . .” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009). A court should grant a Rule 12(b)(6) motion if, “after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).

         As previously noted, to survive a Rule 12(b)(6) motion to dismiss a complaint must state “a plausible claim for relief.” Iqbal, 556 U.S. at 679 (emphasis added). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully. 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 678 (quoting Twombly, 550 U.S. at 557). Stated differently, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Still, Rule 12(b)(6) “does not countenance . . . dismissals based on a judge's disbelief of a complaint's factual allegations.” Colon Health Centers of Am., LLC v. Hazel, 733 F.3d 535, 545 (4th Cir. 2013) (quoting Neitzke v. Williams, 490 U.S. 319, 327 (1989)). “A plausible but inconclusive inference from pleaded facts will survive a motion to dismiss . . . .” Sepulveda-Villarini v. Dep't of Educ. of Puerto Rico, 628 F.3d 25, 30 (1st Cir. 2010).

         Federal Rule of Civil Procedure 10 states, “A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” Fed.R.Civ.P. 10(c). The Fourth Circuit has recognized the general rule that the “exhibit prevails in the event of a conflict between an attached exhibit and the allegations of a complaint.” See, e.g., Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 164 (4th Cir. 2016) (citing S. Walk at Broadlands Homeowner's Ass'n v. OpenBand at Broadlands, LLC, 713 F.3d 175, 182 (4th Cir. 2013).

         Local Civil Rule 7.06 states, “If no memorandum in opposition is filed within fourteen (14) days of the date of service, the court will decide the matter on the record and such oral argument as the movant may be permitted to offer, if any.”

         DISCUSSION

         Because CitiSculpt has not seen fit to respond to ACI's Motion to Dismiss, the Court would say very little by way of analysis. In short, CitiSculpt's allegations center around the formation and supposed breach of the Agreement, but in so doing seem to ignore the express terms of the Agreement.

         The negligent misrepresentation claim is dismissed for failure to state a plausible claim for relief. The Agreement contains a choice of law provision indicating that it “shall be governed by Virginia laws.” (ECF No. 1-2 at 4.) Negligent misrepresentation claims are generally viewed as a hybrid of tort and contract claims. “South Carolina generally respects choice of law provisions, . . . and appears to recognize that a contract's choice of law provision can extend to tort claims.” Charleston Marine Containers Inc. v. Sherwin-Williams Co., 165 F.Supp.3d 457, 468-69 (D.S.C. 2016) (internal citation omitted). CitiSculpt has not challenged the applicability of the choice of law provision, and the Court applies Virginia law accordingly. Virginia law does not recognize an independent cause of action for negligent misrepresentation. See, e.g., Baker v. Elam, 883 F.Supp.2d 576, 581 (E.D. Va. 2012). Therefore, ACI's Motion to Dismiss is granted and the negligent misrepresentation claim is dismissed for failure to state a plausible claim.

         CitiSculpt's cause of action for fraudulent inducement also fails to state a plausible claim for relief. “To state a cause of action for fraudulent inducement of contract under Virginia law, a plaintiff must allege that the defendant made misrepresentations that were positive statements of fact, made for the purpose of procuring the contract; that they are untrue; that they are material; and that the party to whom they were made relied upon them, and was induced by them to enter into the ...


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