Aaa Installers v. Sears Holdings Corp.
764 F. Supp. 2d 931
S.D. Ohio2011Background
- AAA Installers, Inc. operated primarily in appliance installation; Johnsons acquired AAA in 2008 and asserted a longstanding agreement with Sears to bid on Sears’ installation contracts; AAA’s business largely came from Sears bids; Sears’ shift to an Internet-based bidding system in 2009 allegedly disadvantaged AAA; Plaintiffs claim a non-exclusive oral understanding with Sears and an integration clause in the written Servicer Agreement; suit filed May 17, 2010 and removed to SD Ohio; Johnsons, as AAA’s sole shareholders, were named as plaintiffs but sought damages to the corporation; the complaint cites various torts and statutory theories against Sears and Elite Alliances Services; the court granted Sears’ motion to dismiss the Johnsons’ claims and dismissed most claims against Sears for failure to state a claim or standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue for corporate injuries | Johnsons own AAA; they sue for corporate injuries | Johnsons lack standing; only AAA may sue | Johnsons lack standing; claims against Johnsons dismissed |
| Fraud claim sufficiency under Rule 9(b) | Sears misrepresented bidding openness and objectivity | Fraud pleaded with insufficient particularity | Fraud claim fails for lack of particularity and notice |
| Existence of a fiduciary duty | Sears owed a fiduciary duty to AAA | No fiduciary relationship from the contract terms | No fiduciary relationship; breach claim fails |
| Civil conspiracy and underlying unlawful act | Conspiracy between Sears and Elite to defraud AAA | No underlying unlawful act; contract terms allow nonexclusive relationship | Conspiracy claim fails for lack of underlying unlawful act |
| Remaining tort claims against Sears | Claims like coercion, interference with prospective economic advantage, and unfair competition survive | These claims fail as pleadings do not state actionable conduct | All remaining claims against Sears fail; only two claims against Elite remain for further proceedings |
Key Cases Cited
- Wing v. Anchor Media, Ltd., 59 Ohio St.3d 108 (Ohio 1991) (elements of fraud in Ohio)
- ABM Farms Inc. v. Woods, 81 Ohio St.3d 498 (Ohio 1998) (fraud in the inducement; essential elements)
- Aetna Cas. & Sur. Co. v. Leahey Constr. Co., 219 F.3d 519 (6th Cir. 2000) (underlying unlawful act required for civil conspiracy)
- Kenty v. Transamerica Premium Ins. Co., 72 Ohio St.3d 415 (Ohio 1995) (elements of civil conspiracy; need for malice and unlawful act)
- Bell v. Maryland, 378 U.S. 226 (U.S. 1964) (constitutional protections not applicable absent state action)
- Craggett v. Adell Ins. Agency, 92 Ohio App.3d 443 (Ohio Ct. App. 6th Dist. 1993) (fiduciary or confidential relationship required for certain claims)
- Warren v. Union Bank of Rochester, 157 N.Y. 259 (New York 1898) (definition of collusion as fraud by unlawful means)