OU v. Click Labs, Inc.

CourtDistrict Court, M.D. Florida
DecidedMarch 14, 2023
Docket8:22-cv-01341
StatusUnknown

This text of OU v. Click Labs, Inc. (OU v. Click Labs, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
OU v. Click Labs, Inc., (M.D. Fla. 2023).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

GRETHAKA SOLUTIONS OU,

Plaintiff,

v. Case No. 8:22-cv-1341-WFJ-SPF

CLICK LABS, INC.; SAMAR SINGLA; CLICK-LABS.COM; NORA JAIN; and AKANKSHA JAIN,

Defendants.

__________________________________/

ORDER Before the Court is Defendants Click Labs, Inc. and Nora Jain’s Motion to Dismiss (Dkt. 49) and Defendant Samar Singla’s Motion to Dismiss (Dkt. 73).1 After careful consideration of the allegations of the Amended Complaint, the applicable law, and the entire file, the Court concludes the motions are due to be granted. I. BACKGROUND Plaintiff Grethaka Solutions OU is an online application development and marketing company located in Finland. Dkt. 35 ¶ 5. Defendant Click Labs, Inc. is

1 The docket does not reflect whether Defendants Click-Labs.com and Akanksha Jain have been served. a Software as a Service (“SaaS”) provider located in Florida that offers for sale white label software applications (the “Software”), including customization of

these products. Id. ¶¶ 1, 6, 13. Defendant Nora Jain is the Director of Click Labs, Inc. and has a Florida address. Id. ¶ 8. Defendant Samar Singla, whose address is in the United Arab Emirates, is the Chief Executive Officer of Click Labs, Inc. Id.

¶ 7. The Amended Complaint sets forth the following allegations, construed in favor of Plaintiff. According to Plaintiff, Defendants marketed and sold customizable Software to Plaintiff and other clients while offering assurances that

their Software could meet clients’ needs. Id. ¶ 2. Click Labs, Inc. owns the Software and has exclusive control over the code comprising the Software. Id. ¶ 19. Plaintiff alleges that Click Labs, Inc. is controlled and operated by the other

named Defendants for the purpose of carrying out an unlawful scheme through wire fraud or, more specifically, internet fraud. Id. ¶¶ 1, 19, 46. The alleged scheme involves “contractually promising but continually failing to deliver customized software products to clients, including [Plaintiff], while failing to fully

return funds paid by clients for said customized software products.” Id. ¶ 1. Plaintiff claims that after the scope of work and periodic fees for the customization are decided between the parties, Defendants delay the delivery of the Software, fail

to sufficiently customize the Software, ignore client communications, breach the customer agreements by failing to complete and deliver a working version of the customized Software, and refuse to refund prior payments. Id.

The agreement between the parties in this case relates to the customization of the “Jugnoo” application, which Plaintiff believed to be a white label software application. Dkt. 35 ¶ 20; Dkt. 35-2 ¶ 3. Plaintiff contracted with Click Labs, Inc.

to set up a dating application called Sextimer—"an online platform where users can view nearby users and connect with them via chat/video call.” Dkt. 35-5 at 8, 36. Plaintiff paid Defendants contractual fees totaling over $100,000. Dkt. 35 ¶¶ 65, 75, 80, 85, 88; Dkt. 35-2 ¶¶ 5, 10. Almost immediately after the agreement

was signed, Plaintiff allegedly found Defendants’ work to be of poor quality, resulting in delays in the application’s delivery. Dkt. 35 ¶ 22; Dkt. 35-2 ¶ 7. Plaintiff grew concerned about the “serious bugs” and functionality of the

application, together with the delays. Dkt. 35 ¶ 22; Dkt. 35-2 ¶ 7. As the problems escalated, Plaintiff continued to discuss the issues with Defendants and finally requested (1) to review the code of the customizations so that it could be tested by a coding firm and (2) to be given full access to the application being customized.

Dkt. 35-2 ¶ 12; Dkt. 35-5 at 41. Plaintiff contends that at this point, Defendants refused to share the code without further payment. Dkt. 35-2 ¶ 12. Plaintiff alleges Defendants never delivered a complete, customized version of the Jugnoo

software or refunded the payments made. Dkt. 35 ¶¶ 25, 26; Dkt. 35-2 ¶ 14. Relying on these allegations, the five-count Amended Complaint seeks redress for: (1) a violation of §1962(c) of the Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. §§ 1962–68, with predicate acts of wire fraud2; (2) an unlawful federal RICO conspiracy under §1962(d); (3) breach of the Master Services Agreement and the Non-Disclosure Agreement (the “Agreement”)

pertaining to a dating application created by Plaintiff; (4) fraud in asserting that significant errors in the customized white label application had been corrected, while simultaneously failing to make the corrections and demanding further payment; and (5) infliction of emotional distress based on Plaintiff’s employees

and members having lost funds and opportunities to acquire market share.3 Id. Plaintiff’s damages allegedly exceed $100,000 and may be trebled under RICO. Dkt. 35 ¶¶ 65, 67, 85.

Attached to the Amended Complaint are declarations by three former clients of Click Labs, Inc. These declarants include South Africa resident Leigh Morum and Mexico resident Julio Monroy Ortega. Dkts. 35-3 & 35-4. The third declarant, Allan Jorits, is also a signator of the parties’ Agreement at issue in this

case. Dkt. 35-2 (declaration); Dkt. 35-5 at 7 (Agreement). Each declarant entered

2 Plaintiff’s initial complaint did not contain any RICO claims. Dkt. 1. It sought damages for violations of 15 U.S.C. § 45(a) under the Federal Trade Commission Act, breach of the agreement, unjust enrichment, fraud, and infliction of emotional distress. Id. 3 Plaintiff and Defendants Click Labs, Inc., Nora Jain, and Samar Singla have reached an agreement to drop Count V. Dkt. 49 at 18; Dkt. 73 at 19. into a written contract with Click Labs, Inc. for the customization of its Software. Dkts. 35-2, 35-3, 35-4.

II. LEGAL STANDARD The Twombly/Iqbal standard requires a complaint to contain enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility is satisfied “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. (citing Twombly, 550 U.S. at 556). When pleading fraud,

a plaintiff faces a heightened pleading standard. Fed. R. Civ. P. 9(b). Under Rule 9(b), the circumstances constituting the fraud must be alleged “with particularly.” This heightened standard applies to civil RICO claims predicated on fraud

under § 1962(c). Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309, 1316 (11th Cir. 2007). To survive a motion to dismiss, a plaintiff bringing a racketeering claim predicated on fraud must allege with specificity “(1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person

responsible for the statement; (3) the content and manner in which these statements misled the plaintiffs; and (4) what the defendants gained by the alleged fraud.” Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010) (quoting

Brooks v.

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