7:20-cv-00072
E.D. Ky.Aug 17, 2021Background
- Plaintiffs Rainer Triem and two entities he controls (Sotaco LLC and Sotaco Inc.) formed a joint venture with Uniper (UGC SE and UGC NA) to operate Greanex, a company processing waste coal; that venture failed and both sides filed suits against one another in this Court.
- Triem and the Sotaco entities proceeded pro se; Sotaco LLC and Sotaco Inc. later moved to withdraw their claims and Triem voluntarily dismissed individual corporate-officer defendants.
- Triem’s complaint asserted claims mirroring Uniper’s earlier suit: fraud (Count I), RICO conspiracy (Count II), breach of fiduciary duty (Count III), aiding/abetting (Count IV), unjust enrichment (Count V), and breach of contract (Count VI).
- UGC NA moved to dismiss all claims against it, arguing failure to state a claim and that the corporate plaintiffs may not appear pro se; UGC SE was separately alleged to have been improperly served after Triem attempted service on UGC SE’s Kentucky counsel.
- The Court granted UGC NA’s motion in full (dismissing Triem’s claims with prejudice and dismissing Sotaco entities’ claims without prejudice for lack of counsel), denied Triem’s default-judgment motion against UGC SE because service was improper, and gave Triem 21 days to effect proper service on UGC SE or face dismissal under Rule 4(m).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Sotaco LLC and Sotaco Inc. proceed pro se? | Sotaco entities filed claims pro se through Triem. | Corporations/non-natural persons cannot appear without counsel. | Dismissed without prejudice for failure to appear with counsel. |
| Is the fraud claim sufficiently pleaded under Rule 9(b)? | Alleged Uniper used "wrong and manipulated" quantity reports to shift blame. | Allegations lack time, place, content and other particularity required by Rule 9(b). | Fraud claim dismissed for failure to meet Rule 9(b). |
| Is the RICO conspiracy claim actionable? | Alleged conspiracy among Uniper entities to violate RICO. | Claim is conclusory and barred by RICO distinctness requirement for intra-corporate enterprise. | RICO conspiracy claim dismissed. |
| Is there a viable breach of fiduciary duty claim? | Alleged concealment of Greanex’s finances and poor business decisions harmed Greanex/Triem. | No fiduciary relationship pleaded as to Triem; business-judgment rule protects corporate decisions. | Breach of fiduciary duty claim dismissed. |
| Is the breach of contract claim adequately pleaded? | Alleged defendants violated the Operating Agreement and liquidated Greanex without JV partner involvement. | Complaint fails to identify the agreement’s terms, parties, or signature status—mere legal conclusion. | Breach of contract claim dismissed. |
| Is default judgment against UGC SE warranted based on service on its counsel? | Triem served summons on UGC SE’s Kentucky counsel and moved for default after no response. | Counsel was not shown to be authorized to accept service; service methods under Fed. R. Civ. P. 4(h) were not satisfied. | Default denied; Triem given 21 days to effect proper service or claims vs. UGC SE will be dismissed under Rule 4(m). |
Key Cases Cited
- Doherty v. Am. Motors Corp., 728 F.2d 334 (6th Cir. 1984) (non-natural persons may not proceed pro se)
- Taylor Steel, Inc. v. Keeton, 417 F.3d 598 (6th Cir. 2005) (corporate officers cannot represent corporations pro se)
- United States ex rel. Bledsoe v. Cmty. Health Sys., 501 F.3d 493 (6th Cir. 2007) (Rule 9(b) requires time, place, and content of alleged misrepresentation)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (legal conclusions must be supported by factual allegations)
- Davis v. Mutual Life Ins. Co., 6 F.3d 367 (6th Cir. 1993) (RICO distinctness requirement bars liability where enterprise consists only of corporate subdivisions)
- Seeger Enters. v. Town & Country Bank & Tr. Co., 518 S.W.3d 791 (Ky. Ct. App. 2017) (elements of breach of fiduciary duty under Kentucky law)
- Allied Ready Mix Co. ex rel. Mattingly v. Allen, 994 S.W.2d 4 (Ky. Ct. App. 1998) (business judgment rule presumption protecting corporate decisions)
- Aronson v. Lewis, 473 A.2d 805 (Del. 1984) (formulation of the business judgment rule)
- United States v. Ziegler Bolt & Parts Co., 111 F.3d 878 (Fed. Cir. 1997) (attorney-client relationship alone does not establish authority to accept service of process)
- Alshaibani v. Litton Loan Servicing, LP, [citation="528 F. App'x 462"] (6th Cir. 2013) (conclusory breach-of-contract allegations insufficient to survive motion to dismiss)