United States District Court, D. Nebraska
BRYAN WHEATLEY, and JANA WHEATLEY, d/b/a TEAM GREEN, Plaintiffs
VICTOR KIRKLAND, RICHARD BERKSHIRE, FREE POWER COMPANY, INC., and SOLAR PRODUCT SOLUTIONS, LLC, Defendants.
MEMORANDUM AND ORDER
Smith Camp Chief United States District Judge
matter is before the Court on the Motion to Dismiss or, in
the Alternative, Motion for a More Definite Statement (Filing
No. 5) submitted by Defendant Richard Berkshire
("Berkshire"). For the reasons discussed below, the
Motion to Dismiss will be granted in part; the
Plaintiffs' First Cause of Action, alleging violations of
the Racketeer Influenced and Corrupt Organizations
("RICO") Act, 18 U.S.C. §§ 1961, et
seq., will be dismissed as to Berkshire, with prejudice;
and Plaintiffs will be given leave to file an Amended
Complaint pleading with particularity the facts constituting
the alleged fraud asserted in Plaintiffs' Fourth Cause of
Action, consistent with Fed.R.Civ.P. 9(b).
purposes of the pending Motion, all well-pled facts alleged
in the Complaint (Filing No. 1) are presumed to be true,
though the Court need not accept the Plaintiffs'
conclusions of law. The following is a summary of those
Free Power Company, Inc. ("Free Power") had certain
contracts with the City of Columbia, Missouri, for the
installation of arrays of equipment to generate electricity.
Free Power designated Defendant Solar Product Solutions, LLC
("SPS") as its project coordinator to supervise
procurement and construction services for the installation of
the arrays. Defendant Victor Kirkland ("Kirkland")
was the owner of SPS, and also controlled Free Power.
2012, Plaintiffs Bryan Wheatley and Jana Wheatley (the
"Wheatleys"), doing business as Team Green, entered
into a Construction Services Agreement (the
"Agreement") with SPS. The Wheatleys signed the
Agreement, (Filing No. 1-1, Exhibit A to the
Complaint), on May 8, 2012, and the Agreement had an
effective date of April 7, 2012. (Id. at 1.)
Pursuant to the Agreement, the Wheatleys were "to
provide all equipment, materials, supplies, tools, labor and
services necessary to complete designated Arrays . . . except
the equipment set forth in Exhibit A." (Id. at
2.) Exhibit A to the Agreement listed the equipment to be
supplied by SPS: Solar modules, Inverters, Racking, and Wire.
(Id. at 13.)
the Agreement was executed, Kirkland told the Wheatleys they
must supply certain equipment for the construction project
that the Wheatleys did not believe they were obligated to
supply. The Wheatleys incurred substantial expense to procure
and supply such equipment and to complete the construction
project. After the project was complete, SPS, Kirkland, and
Free Power declined to pay the Wheatleys for labor and
Wheatleys allege that Berkshire, an attorney practicing law
in Omaha, Nebraska, represented them during the negotiation
and performance of the Agreement, and that they enlisted
Berkshire's services to obtain payment. They also allege
Berkshire served as general counsel for SPS and Free Power,
and represented Kirkland, but failed to disclose these
alleged conflicts of interest to the Wheatleys.
Wheatleys brought this action on April 7, 2016, asserting
four causes of action: (1) Violation of the Racketeer
Influenced and Corrupt Organizations ("RICO") Act,
18 U.S.C. § 1961, et seq., as to all
Defendants; (2) Breach of Contract, referencing
"Defendants" in general, but naming SPS and
Kirkland, specifically; (3) Fraudulent Misrepresentation as
to Kirkland, Free Power, and SPS; and (4) Fraudulent
Misrepresentation as to Berkshire. It is the First and Fourth
causes of action that are the subject of the pending Motion.
R. Civ. P. 9(b)
9(b) provides in pertinent part: "In alleging fraud . .
. a party must state with particularity the circumstances
constituting fraud . . . . Malice, intent, knowledge, and
other conditions of a person's mind may be alleged
generally." Fed.R.Civ.P. 9(b). "Rule 9(b)'s
‘particularity requirement demands a higher degree of
notice than that required for other claims, ' and
‘is intended to enable the defendant to respond
specifically and quickly to the potentially damaging
allegations.'" United States ex rel. Joshi v.
St. Luke's Hosp., Inc., 441 F.3d 552, 556 (8th Cir.
2006) (quoting United States ex rel. Costner v. URS
Consultants, Inc., 317 F.3d 883, 888 (8th Cir.
2003)). A party must "must plead such facts as the time,
place, and content of the defendant's false
representations, as well as the details of the
defendant's fraudulent acts, including when the acts
occurred, who engaged in them, and what was obtained as a
result" to satisfy Rule 9(b)'s particularity
requirements. Id. (citing Corsello v. Lincare,
Inc., 428 F.3d 1008, 1012 (11th Cir. 2005)).
"Put another way, the complaint must identify the
‘who, what, where, when, and how' of the alleged
fraud." Id. (citing Costner, 317 F.3d
at 888). Rule 9(b) requires more than "conclusory and
generalized allegations." Id. at 557 (citing
Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d
736, 746 (8th Cir. 2002)).
particularity requirements of Rule 9(b) apply to allegations
of . . . fraud . . . when used as predicate acts for a RICO
claim." Murr Plumbing, Inc. v. Scherer Bros. Fin.
Servs. Co., 48 F.3d 1066, 1069 (8th Cir. 1995) (citing
Flowers v. Cont'l Grain Co., 775 F.2d 1051, 1054
(8th Cir.1985)). However, the particularity requirements of
Rule 9(b) do not apply to allegations of the other elements
of a RICO claim. See Abels v. Farmers Commodities
Corp., 259 F.3d 910, 919 (8th Cir. 2001) (stating
"[t]here are two issues here that should be kept
distinct: whether the plaintiffs have sufficiently pleaded
acts of racketeering, and whether those alleged acts can be
said to form a pattern, " and that Rule 9(b) applies
only to allegations of predicate acts involving fraud).
Furthermore, "[w]here a plaintiff is not a party to a
communication, particularity in pleading may become
impracticable." Id. at 921. As a result, courts
have relaxed the particularity requirement in those
circumstances. Id. (citing Durham v. Bus. Mgmt.
Assoc., 847 F.2d 1505, 1510 (11th Cir. 1988); New
England Data Serv. v. Becher, 829 F.2d 286, 292 (1st
Cir. 1987); Seville Indus. Machinery Corp v. Southmost
Machinery Corp., 742 F.2d 786, 792 n.7 (3d Cir. 1984)).
R. Civ. P. 12(b)(6)
complaint must contain "a short and plain statement of
the claim showing that the pleader is entitled to
relief." Fed.R.Civ.P. 8(a)(2). "[A]lthough a
complaint need not include 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.'" C.N. v. Willmar
Pub. Sch., Indep. Sch. Dist. No. 347, 591 F.3d 624,
629-30 (8th Cir. 2010) (quoting Twombly, 550 U.S. at
555). "Instead, the complaint must set forth