2:16-cv-00360
E.D. Tenn.Jun 26, 2017Background
- Bristol Preservation (landlord) leased the Country Club of Bristol to IGC-Bristol for a ten‑year term; Integrity Golf guaranteed IGC‑Bristol’s obligations. Knight 39 later became sole member of IGC‑Bristol.
- Lease contained a forum‑selection clause specifying Sullivan County state court (or, if state court lacks jurisdiction, the U.S. District Court for the Eastern District of Tennessee).
- One year into the lease IGC‑Bristol missed rent, communications from Knight 39 indicated it would cease operations, and plaintiff alleges IGC‑Bristol/Knight 39 abandoned the club on July 31, 2016 and retained/received member fees after abandonment.
- Plaintiff sued IGC‑Bristol, Integrity Golf, and Knight 39 in state court; defendants removed to federal court. IGC‑Bristol asserted counterclaims against plaintiff.
- Motions: plaintiff moved to remand and to dismiss counterclaims; Knight 39 moved to dismiss all claims against it.
- Court disposition: denied remand; granted Knight 39’s motion in part (dismissed most claims except procurement of breach and injunctive relief); granted plaintiff’s motion to dismiss IGC‑Bristol’s counterclaims in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether forum‑selection clause waived defendants’ removal | Clause required suits be lodged in state court so removal was barred | Removal right not clearly waived; clause does not expressly waive removal or name removing parties | Denied remand — clause not a clear and unequivocal waiver of removal |
| Whether Knight 39 can be liable for procuring IGC‑Bristol’s breach of the lease | Knight 39 intentionally changed IGC‑Bristol’s structure and caused breaches without landlord consent | Knight 39 argued insufficient malice and not party to lease | Claim survives — complaint plausibly pleads intent/malice and proximate damages |
| Whether veil piercing should impose liability on Knight 39 | Plaintiff alleges domination, diversion of funds, and fraud permitting veil piercing | Knight 39: no factual showing of fraud; Tennessee disfavors piercing and requires extreme circumstances | Dismissed — plaintiff failed to plead fraud/similar injustice with particularity required for veil piercing |
| Whether plaintiff’s claims for injunctive relief against Knight 39 survive | Accepting post‑abandonment fees could cause irreparable reputational harm to the Club | Knight 39: alleged reputational harm speculative and monetary damages adequate | Survives pleading stage — injunction claim sufficiently alleged under Rule 8(a) |
| Whether claims of unlawful detainer, trespass, unjust enrichment, intentional interference against Knight 39 are viable | Plaintiff contends Knight 39 possessed/operated club without right and received benefits | Knight 39: tenant IGC‑Bristol held possession during lease; plaintiff has remedies against tenant/guarantor; improper to bring these claims against member | Dismissed — unlawful detainer, trespass, unjust enrichment, and intentional interference claims failed as pleaded |
| Whether IGC‑Bristol’s counterclaims (breach, indemnification, constructive eviction) survive | IGC alleges landlord interfered with quiet enjoyment and made unreasonable demands | Plaintiff: IGC failed to give required written notice and 30‑day cure per lease | Dismissed — counterclaims fail because IGC‑Bristol did not provide contractual notice/opportunity to cure |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions insufficient; plausibility inquiry)
- Trau‑Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691 (Tenn. 2002) (elements for tortious interference and limits regarding contractual relationships)
- Tenn‑Tex Props. v. Brownell‑Electro, Inc., 778 S.W.2d 423 (Tenn. 1989) (constructive eviction requires substantial, permanent interference with enjoyment)
- eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006) (standards for injunctive relief)