Simmonds Equipment, LLC v. GGR International, Inc.

126 F. Supp. 3d 855, 2015 U.S. Dist. LEXIS 113629
CourtDistrict Court, S.D. Texas
DecidedAugust 27, 2015
DocketCivil Action No. H-15-0862
StatusPublished
Cited by3 cases

This text of 126 F. Supp. 3d 855 (Simmonds Equipment, LLC v. GGR International, 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
Simmonds Equipment, LLC v. GGR International, Inc., 126 F. Supp. 3d 855, 2015 U.S. Dist. LEXIS 113629 (S.D. Tex. 2015).

Opinion

MEMORANDUM OPINION AND ORDER

SIM LAKE, District Judge.

Plaintiff, Simmonds Equipment LLC (“Simmonds”), has filed a Complaint (Docket Entry No. 1) against defendant, [859]*859GGR International, Inc. (“GGR”), for violations of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1080 et seq.; the Texas Theft Liability Act (“TTLA”), Texas Civil Practices & Remedies Code § 134.001 et seq.; and for conversion and tortious interference with prospective business relations. Pending before the court is GGR’s Motion to Dismiss Under FRCP 12(b)(6) and FRCP 12(b)(1) (Docket Entry No. 6), in which GGR seeks dismissal of Simmonds’ claims for conversion and for violation of the CFAA and the TTLA. Sim-monds’ opposition to GGR’s motion to dismiss contains a request for leave to amend should the court decide to grant GGR’s motion to dismiss.1 For the reasons stated below, the pending motion to dismiss will be granted as to Simmonds’ conversion claim and denied in all other respects; and Simmonds’ request to file an amended complaint will be granted.

I. Factual Allegations

Simmonds alleges that on August 23, 2013, it executed two contracts with GGR: a Website Agreement and a Marketing Agreement.2 Simmonds alleges that under the Website Agreement GGR was to design its company website via the following three-stage process: (1) the design process would commence on September 1, 2013; (2) the Website would launch by January 1, 2014; and (3) the Website Agreement would terminate on its own terms no later than February 28, 2014. Simmonds alleges that the website design process progressed quickly and ended early with “the website completed and final payment under the [Website] Agreement tendered on October 10, 2013, thereby terminating the Website Agreement on that date.”3 Simmonds alleges that GGR “had and has no ownership rights over the website or its content and was provided only a limited license to utilize Simmonds’ names, trademarks, logos, and service marks ... in order to design and develop the site.”4 Simmonds alleges that the Marketing Agreement provided for GGR to develop and implement a variety of branding, sales, and marketing strategies, and also provided for the agreement to terminate no later than six months from its September 1, 2013, commencement date.5 Simmonds alleges that “nothing in the Marketing Agreement gave GGR any rights to or ownership interests in Simmonds’ company website;”6 but, instead, the Marketing Agreement granted GGR “only a limited right to use Simmonds’ marks in connection with its performance under the Marketing Agreement.”7

Simmonds alleges that it “quickly became dissatisfied with the services provided by GGR under the Website and Marketing Agreements,”8 but that it was

excited to implement a website feature heavily touted by GGR which would enable Simmonds to create and make sales presentations directly through the company website, without the need to load pitches and related materials onto external drives and launch them through PowerPoint to similar software installed on laptop computers.9

[860]*860Simmonds alleges that it “paid GGR $40,000 under the Marketing Agreement despite receiving virtually nothing of value.” 10 Simmonds alleges that on March 25, 2014, GGR’s Chief Operating Officer, Jayson Nesbitt (“Nesbitt”), e-mailed its CEO, Brian Simmonds, to say that GGR was placing Simmonds’ account “on hold” due to Simmonds’ alleged non-payment of outstanding invoices under the Marketing Agreement. Despite being told that Brian Simmonds was in Colombia to make a sales presentation to a prospective customer and would return only two days later, on March 27, 2014, Nesbitt again e-mailed Simmonds to say that the Simmonds account was “suspended” and that GGR had “temporarily deactivated” the Simmonds’ company website and all incorporated functionality due to the alleged non-payment of Marketing invoices. Simmonds alleges that it

subsequently learned that GGR’s owner and CEO, Claire Ansell, had contacted a Simmonds employee, and on the false pretense that GGR was authorized and needed to work on the Simmonds website, obtained the password to the company website in order to access the site via a third-party hosting company and convert it for GGR’s own purposes.11

Simmonds alleges that due to “GGR’s unlawful conduct, Mr. Simmonds was unable to make the sales presentation for which he had traveled to Colombia, and his company lost a business opportunity of more than $1,000,000 with a major prospective customer.” 12

II. Standards of Review

Asserting that “[tjhis is a breach of contract case — nothing more,”13 and citing Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), GGR moves “to dismiss Plaintiffs sole federal claim (and thus federal question jurisdiction) and state law claims of Conversion and Theft.”14 GGR also “moves to dismiss this case for lack of subject matter jurisdiction as the contracts themselves limit liability so that the amount in controversy in this case does not rise to the $75,000.00 minimum amount to trigger diversity jurisdiction.”15 Sim-monds responds that none of its claims are subject to dismissal, but that should the court decide otherwise, Simmonds requests leave to file an amended complaint.16

A. Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) governs challenges to the court’s subject matter jurisdiction. “A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case.” Home Builders Association of Mississippi Inc. v. City of Madison, Mississippi 143 F.3d 1006, 1010 (5th Cir.1998). “Courts may dismiss for lack of subject matter jurisdiction on any one of three different bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts.” Clark v. Tarrant County, Texas, [861]*861798 F.2d 736, 741 (5th Cir.1986). Rule 12(b)(1) challenges to subject matter jurisdiction come in two forms: “facial” attacks and “factual” attacks. See Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). A facial attack consists of a Rule 12(b)(1) motion unaccompanied by supporting evidence that challenges the court’s jurisdiction based solely on the pleadings. Id.

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Cite This Page — Counsel Stack

Bluebook (online)
126 F. Supp. 3d 855, 2015 U.S. Dist. LEXIS 113629, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simmonds-equipment-llc-v-ggr-international-inc-txsd-2015.