Clark Fire Equipment, Inc. v. Arkema, Inc.

176 F. Supp. 3d 646, 2015 WL 1209109, 2015 U.S. Dist. LEXIS 31808
CourtDistrict Court, S.D. Texas
DecidedMarch 16, 2015
DocketCivil Action No. 4:14-CV-2730
StatusPublished
Cited by1 cases

This text of 176 F. Supp. 3d 646 (Clark Fire Equipment, Inc. v. Arkema, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark Fire Equipment, Inc. v. Arkema, Inc., 176 F. Supp. 3d 646, 2015 WL 1209109, 2015 U.S. Dist. LEXIS 31808 (S.D. Tex. 2015).

Opinion

MEMORANDUM AND ORDER

GEORGE C. HANKS, JR., United States Magistrate Judge.

Pending before the Court is Defendant Arkema, Inc.’s (“Arkema”) Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. 2. Plaintiff Clark Fire Equipment, Inc. (“Clark Fire”) filed a response opposing the motion. Dkt. 7. After having carefully considered the parties’ briefing, oral arguments, and the applicable law, the Court finds that Plaintiff has failed to state a claim upon which relief can be granted. Therefore, Defendant’s motion to dismiss is GRANTED.

BACKGROUND

Plaintiff Clark Fire is Texas corporation, who has done business with Arkema, a Pennsylvania corporation, for the last twenty years. In September 2013, a person identifying himself as “Joe Cheong” (hereinafter “Doe”) contacted Clark Fire seeking approximately $40,000 worth of computer parts and accessories. Doe represented to Clark Fire that he was the Vice President of Arkema, and requested that Clark Fire send the computer equipment to “Robert Walker” in Lombard, Illinois! Doe was able to provide Arkema’s actual bank account information, credit information, vendor account numbers, and trade references, which both Clark Fire and an independent third party verified as accurate. According to Clark Fire, because it was customary for its clients to request that its products be shipped to a third party location, and because it had a longstanding business relationship with Arkema, it did not question the legitimacy of the transaction nor contact anyone at Arkema to verify the identity of “Joe Cheong” and “Robert Walker.” Instead, Clark Fire shipped the goods and sent an invoice to Arkema in Pennsylvania.

Approximately sixty days after sending the invoice, Clark Fire contacted Arkema’s Accounts Payable department seeking payment. Arkema refused to pay for the goods and, for the first time,' informed Clark Fire that: (1) neither “Joe Cheong” nor “Robert Walker” were authorized agents or employees of Arkema, (2) Doe’s purchase order (“PO”) was “clearly fraudulent” because it did not comport with Arkema’s standard PO formatting, and (3) the PO had not been approved or authorized by any agent or representative of Arkema. Arkema also informed Clark Fire that it had received several fraudulent invoices from other vendors over the last several months, and that all of them were tied to the alias of “Joe Cheong.”

In December 2013, Clark Fire filed a police report with the Galena Park Police Department. Clark Fire also determined that the destination address for the goods was a public storage facility. However, the true identity of Doe and “Robert Walker,” and the whereabouts of the computer parts are still unknown.

Procedural History

On August 20, 2014, Clark Fire filed- an Original Petition against “John Doe a/k/a Joe Cheong” in the Harris County District Court alleging (1) fraud, (2) theft of property under the Texas Theft Liability Act, (3) conversion, and (4) quantum meruit. Clark Fire also sued Arkema for negligence, claiming that, because of their longstanding business relationship, Arkema had a duty to timely warn Clark Fire of Doe’s fraudulent scheme so that the shipment could be halted. Arkema was served with process on September 3, 2014. Dkt. [648]*6481-1. “John Doe” has yet to be identified or served.

On September 23, 2014, Arkema timely removed the case to this Court, asserting federal diversity jurisdiction. Dkt. 1; see also 28 U.S.C. § 1441. In its Notice of Removal, Arkema asserted that jurisdiction was proper “because the controversy in this civil action is wholly between citizens of different states and because, based on the allegations contained in Plaintiffs Original Petition, the amount in controversy exceeds the sum of $75,000, exclusive of costs and interest.” See 28 U.S.C. § 1332 (“The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.”); see also Pl.’s Compl. ¶ 1 (“Plaintiff affirmatively pleads that it seeks monetary relief in excess of $100,000.00.”). Arkema filed the currently pending motion to dismiss that same day. Dkt. 2.

MOTION TO DISMISS

When reviewing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court must “accept ] all well-pleaded facts as true and view[ ] those facts in the light most favorable to the plaintiffs.” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir.2009). However, this deference does not apply to a party’s assertions of law. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). To survive a Rule 12(b)(6) motion to dismiss, “[fjactual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). “Generally, a court ruling on a 12(b) (6) motion may rely on the complaint, its proper attachments, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Wolcott v. Sebelius, 635 F.3d 757, 763 (5th Cir.2011) (internal quotation marks omitted).

ANALYSIS

To bring a cause of action for negligence under Texas law, Clark Fire must establish that Arkema violated a legal duty owed to it. See Nabors Drilling, U.S.A., Inc. v. Escoto, 288 S.W.3d 401, 404 (Tex.2009) (Texas negligence suit requires “a legal duty owed by one person to another, a breach of that duty, and damages proximately caused by the breach.”). “The existence of a legal duty is a question of law for the court to decide.” Tri v. J.T.T., 162 S.W.3d 552, 563 (Tex.2005). Dismissal is appropriate if the complaint lacks an allegation regarding a required element necessary to obtain relief. Rios v. City of Del Rio, Tex., 444 F.3d 417, 421 (5th Cir.2006).

Clark Fire seeks to hold Arkema liable for the actions of John Doe, whom the parties agree is unaffiliated third party. However, “Texas law generally imposes no duty to take action to prevent harm to others absent certain special relationships or circumstances.” Torrington Co. v. Stutzman, 46 S.W.3d 829, 837 (Tex.2000). Here, Clark Fire asserts that its “longstanding business relationship and course of dealings” with Arkema created a legal duty that required Arkema, once it received an invoice seeking payment for goods it never ordered, to timely warn Clark Fire that a third party was using Arkema’s identity to fraudulently obtain goods.

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176 F. Supp. 3d 646, 2015 WL 1209109, 2015 U.S. Dist. LEXIS 31808, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-fire-equipment-inc-v-arkema-inc-txsd-2015.