DIVERSIFIED PROTECTION SYSTEMS, LLC v. SIEMENS INDUSTRY, LLCDIVERSIFIED PROTECTION SYSTEMS, LLC v. SIEMENS INDUSTRY, LLC
ARLEO, UNITED STATES DISTRICT JUDGE
THIS MATTER comes before the Court by way of Defendant Siemens Industry Inc.s (Defendant or Siemens) Motion to Dismiss the Amended Complaint, ECF No. 29.1, and Strike Claims of Plaintiff Red Hawk Fire & Security, LLCs (Plaintiff or Red Hawk) under
I. BACKGROUND
This action arises from a series of distributor agreements executed between Diversified Protection Systems, Inc. (DPS Inc.) and Siemens under which DPS Inc. agreed to act as a distributor of Siemens products in various areas of California.1 Am. Compl. ¶ 5. In total, the
On February 7, 2018, Siemens sent a letter to DPSI, notifying it that DPSI had not met Siemenss purchase quotas and had thirty days to cure its breach, and if it did not, Siemens would terminate the Distributor Agreements effective ninety days from the date of the letter. See id. ¶¶ 9-10. DPSI thereafter made significant efforts to comply with Siemenss requests and was . . . close in meeting Siemenss expectations. Am. Compl. ¶ 12. Nonetheless, on March 9, 2018, Siemens notified DPSI that it would terminate the Distributor Agreements on May 7, 2018. See id. ¶ 12.
Red Hawk alleges that soon after sending the March termination notice, Siemens took actions that made it clear that Siemens intended to undermine DPSIs efforts. Am. Compl. ¶ 13. According to Red Hawk, Siemens sent a letter to general contractors on [a school district modernization project], falsely alleging that DPSI would not be able to provide the materials required to perform [the project] because Siemens was cancel[l]ing DPSIs distributorship. Id. ¶ 14. Siemens was allegedly the only other entity bidding to become a subcontractor on the project, and DPSI did not win the bid. See id. ¶¶ 15, 17. Red Hawk claims that but for Siemenss letter,
On August 15, 2018, DPS LLC filed a Complaint in the Superior Court of California, San Diego County, against Siemens, as successor-in-interest to DPS, Inc.s rights under the Distributor Agreements. Original Compl. ¶ 1. On September 17, 2018, Siemens removed the matter to the United States District Court for the Southern District of California, ECF No. 1, and filed a motion to transfer venue on September 24, 2018, ECF Nos. 3-5. On May 16, 2019, the United States District Court for the Southern District of California issued an order granting Siemenss motion and transferring the matter to this Court pursuant to the forum selection clause in the Distributor Agreements. ECF No. 12.
On June 25, 2019, counsel for DPS LLC filed a disclosure statement pursuant to
Through its Amended Complaint, Red Hawk brings the following claims against Siemens: (1) breach of the Distributor Agreements (Count One); (2) breach of the covenant of good faith and fair dealing (Count Two); (3) unjust enrichment (Count Three); (4) tortious interference with contract (Count Four) (5) tortious interference with prospective economic advantage
Siemens filed the instant Motion to Dismiss and Strike Claims on September 13, 2019. ECF No. 31. On October 8, 2019, Red Hawk filed a Motion to Strike its originally-filed opposition to Siemenss motion, indicating that it had filed an incorrect version of its opposition brief. See ECF No. 38.
II. LEGAL STANDARD
A. Rule 12(b)(1)
Under
A facial attack argues that a claim on its face is insufficient to invoke the subject matter jurisdiction of the court, id. at 358, and does not dispute the facts alleged in the complaint, Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). A court reviewing a facial attack must apply the same standard of review it would use in considering a motion to dismiss under
The Third Circuit has repeatedly cautioned against allowing a
A motion to dismiss for want of standing is . . . properly brought under
In resolving a
Courts generally may not consider material extraneous to the pleadings in resolving a motion to dismiss except those documents integral to or explicitly relied upon in the complaint. In re Burlington Coat Factory, 114 F.3d at 1426. Such documents include exhibits attached to the Complaint, matters of public record, and undisputedly authentic documents if the plaintiffs claims are based upon those documents, see Guidotti v. Legal Helpers Debt Resolution, 716 F.3d 764, 772 (3d Cir. 2013).
C. Rule 12(f)
Pursuant to
III. ANALYSIS
A. Article III Standing
Siemenss argument that Red Hawk lacks Article III standing to bring this case is two-fold. First, Siemens contends that Red Hawk has no rights under the Distributor Agreements because those agreements were between DPS INC and Siemensnot between DPS LLC or Red Hawk and Siemens. Def. Br. at 9. Second, Siemens asserts that Red Hawk acquiring DPS, Inc. without first obtaining Siemenss written consent constitutes a breach of the Distributor Agreements, and Red Hawk cannot create standing in violation of those Agreements. Id. at 10-11. The Court finds both of those arguments unpersuasive.
[A] plaintiff in a breach of contract case has standing only where that party holds some title or interest created by the contract. Med-X Global, LLC v. Azimuth Risk Sols., LLC, No. 17-13086, 2018 WL 4089062, at *2 (D.N.J. Aug. 27, 2018). Red Hawk bears the burden of establishing its standing, Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), and in determining whether Red Hawk has met that burden, the Court must accept as true all material allegations in the complaint, and . . . construe the complaint in favor of the complaining party. FOCUS v.
As to Siemenss first argument, here, the Amended Complaint alleges that Red Hawk is the successor-in-interest to DPS LLC. Am. Compl. at 1. Siemens correctly points out that the Amended Complaint does not allege facts demonstrating the connection between DPS LLC and DPS, Inc., the original named plaintiff and executor of the Distributor Agreements. However, Siemens attached to its motion to dismiss a document entitled Limited Liability Company Articles of Organization – Conversion, a public California filing demonstrating that DPS, Inc. converted from its original corporate form into DPS LLC. ECF No. 31.7. As a public record, the Court may consider this document in determining whether Red Hawk has standing, see Guidotti, 716 F.3d at 772, and finds that it provides the necessary link between DPS, Inc. and Red Hawk missing from the Amended Complaint. In addition, the Original Complaint, filed by DPS LLC, indicates that DPS, LLC was the successor-in-interest to DPS, Inc.s rights under the Distributor Agreements. Original Compl. ¶ 1. Based on the public filing attached to Siemenss motion to dismiss and the Original Complaints and Amended Complaints allegations as true, the Court is satisfied that Red Hawk has sufficiently alleged it holds DPS, LLCs interest in the Distributor Agreements such that it has standing to bring claims arising under them. See CKSJB Holdings, LLC v. EPAM Sys., Inc., 379 F. Supp. 3d 388, 394 (E.D. Pa. 2019) (finding that allegation in Amended Complaint that non-signatory became 100% owner in original signatory to contract with the defendant, along with a document reflecting an assignment, was enough to demonstrate plaintiff had standing to sue defendant as the successor-in-interest to the signatory).
The Court finds Siemenss second argumentthat Red Hawk lacks standing because it breached the Distributor Agreement by acquiring DPS, Inc. without first obtaining Siemenss
B. Failure to State a Claim
In addition to challenging Red Hawks standing, Siemens makes several arguments under
1. Breach of Contract
Siemens first argues that the Amended Complaint fails to state a breach of contract claim. Siemens relies on two letters it attached as exhibits to its motion to dismiss as support. For the reasons below, the Court declines to consider one of those letters and disagrees with Siemens that dismissal of Count One under
On a motion to dismiss, the Court generally may not consider matters extraneous to the pleadings without converting the motion to one for summary judgment unless they are integral to or explicitly relied upon in the complaint. See In re Burlington Coat Factory Sec. Litig., 114 F.3d at 1426. Siemens relies on two lettersone dated February 7, 2018, Johnson Decl., Ex. 11 (the February Letter), and one dated March 9, 2018, id. Ex. 12 (the March Letter)claiming that they show it did not breach the Distributor Agreements. See Def. Br. at 16-17. The Court
Having reviewed the February Letter, the Court rejects Siemenss assertion that the Amended Complaint fails to state a breach of contract claim. The February Letter shows nothing more than Siemenss providing DPSI a thirty-day period to cure its alleged deficiencies under the Distributor Agreements. See Johnson Decl., Ex. 11. The Amended Complaint does not allege that Siemens breached the Agreement by issuing the thirty-day cure letter threatening termination. Instead, the Amended Complaint, argues that Siemens breached the Distributor Agreements by refusing to provide products to DPSI in a plan to prevent DPSI from fulfilling existing customer sales and potential sales and by wrongfully stating to DPSI customers and potential customers that Siemens had terminated DPSIs rights under the Distribut[or] Agreement[s], and that DPSI would, therefore, be unable to perform work or provide any material or equipment on any contract or bid. Am. Compl. ¶¶ 24-25.
The first claimrefusing to provide productscertainly arises under the Distributor Agreements; the essence of those agreements was that Siemens would sell and provide products to DPSI for distribution. See, e.g., ECF No. 31.8 §§ 1.A, 3.A. This claim thus provides a proper basis for Red Hawks breach of contract claim. In addition, as explained in Section III.C.2, at this stage, Plaintiff has sufficiently alleged damages to support this claim. Accordingly, Plaintiffs
However, the Court finds that the second claimSiemenss alleged false statements to DPSIs customers that DPSI could not perform work or provide materials on any contract or bidsis insufficiently alleged to support Red Hawks breach of contract claim. The Amended Complaint fails to allege or identify a contractual provision on which this claim is based. Plaintiffs breach of contract claim as it relates to these alleged false statements is thus dismissed. Red Hawk may re-plead this claim to the extent they can allege the contractual provision under which it is brought.
For the foregoing reasons, Siemenss Motion to Dismiss Count One is granted only as to Plaintiffs allegation that Siemens breached the Distributor Agreements by making false statements to DPSIs customers, and denied as to the allegation that Siemens failed to provide products to DPSI as required under the Distributor Agreements.
2. Tort Claims4
Siemens next asserts that the economic loss doctrine bars Red Hawks tort claims. In the alternative, Siemens argues that the Amended Complaint fails to state claims for unjust enrichment, fraud or fraudulent misrepresentation, and defamation.
New Jersey courts have consistently held that contract law is better suited to resolve disputes between parties where a plaintiff alleges direct and consequential losses that were within the contemplation of sophisticated business entities with equal bargaining power and that could
i. Count Two: Breach of the Implied Covenant of Good Faith and Fair Dealing
Siemens argues that the economic loss doctrine bars Count Two because Siemenss alleged conduct under [Count Two] stems from the purported duties owed by Siemens under the Agreements. Def. Br. at 25. The Court disagrees.
Each party to a contract assumes the implicit duty of good faith and fair dealing in their performance thereunder. Pickett v. Lloyds & Peerless Ins. Agency, Inc., 148 N.J. 396 (1993). A party to a contract breaches the covenant if it acts in bad faith or engages in some other form of inequitable conduct in the performance of a contractual obligation. Black Horse Lane Assoc., L.P. v. Dow Chem. Corp., 2288 F.3d 275, 288 (3d Cir. 2000) (citation omitted). By its very nature, the implied covenant of good faith and fair dealing sounds in contract, and a claim alleging breach of the covenant is not actionable in tort. Skypala v. Mortgage Electronic Registration Sys., Inc, 655 F. Supp. 2d 451, 460 (D.N.J. 2009); see also Dando v. Bimbo Food Bakeries Distribution, LLC, No. 14-2956, 2017 WL 1362022, at *3 (D.N.J. Apr. 10, 2017). It follows that, as a matter of law, the economic loss doctrine does not apply to claims asserting breach of the implied covenant of good faith and fair dealing. Dando, 2017 WL 1362022, at *3.
In addition, the Court finds unpersuasive Siemenss contention that the Amended Complaint fails to state conduct by Siemens beyond that imposed by the Distributor Agreements such that the claim may proceed in conjunction with Count One. See Def. Reply Br. at 10-11. To sufficiently plead a breach of the duty of good faith and fair dealing under New Jersey law, a plaintiff must allege that (1) the defendant act[ed] in bad faith or with a malicious motive, (2) to deny the plaintiff some benefit of the bargain originally intended by the parties, even if that benefit was not an express provision of the contract. Yapak, LLC v. Mass. Bay Ins. Co., No. 09-3370, 2009 WL 3366464, at *2 (D.N.J. Oct. 16, 2009) (collecting cases). Among other things, a defendant may breach the implied covenant of good faith and fair dealing if the plaintiffs reasonable expectations are destroyed when [the] defendant acts with ill motives and without ay purpose, or the plaintiff relies to its detriment on [the] defendants intentional misleading assertions. Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Associates, 182 N.J. 210, 226 (2005). The plaintiff cannot maintain a breach of the implied covenant of good faith and fair dealing claim that is duplicative of its breach of contract claim. Adler Engrs, Inc. v. Dranoff Props., No. 14-921, 2014 WL 5475189, at *11 (D.N.J. Oct. 29, 2014).
Here, while Siemens correctly observes that Count Two alleges conduct that is duplicative of Count One, i.e. that Siemenss breaches of the Distributor Agreements . . . frustrated DPSIs expectations of benefits under those agreements, Am. Compl. ¶ 32, that is not the only allegation on which Red Hawk relies to support this claim. Count Two plainly refers back to allegations plead earlier in the Amended Complaint, some of which suggest inequitable conduct by Siemens. See id. ¶¶ 30, 33. Those allegations include that Siemens, among other things, undermine[d] DPSIs efforts to cure DPSIs alleged breach and made false statements about DPSI to DPSIs customers about DPSIs ability to perform on various projects. See Am. Compl. ¶¶ 13-14, 18-20.
The Court finds these allegations sufficient to plead a breach of the implied covenant of good faith and fair dealing differentiable to the breach of contract claim, and, at this early stage, Count Two may proceed.
Accordingly, because the economic loss doctrine does not bar Count Two and Red Hawk has sufficiently stated a breach of the implied covenant of good faith and fair dealing claim that is not duplicative of Count One, Siemenss motion to dismiss Count Two is denied.
ii. Count Three: Unjust Enrichment
Siemens next asserts that the economic loss doctrine bars Count Three because a claim for unjust enrichment cannot stand where a valid contract controls the parties rights and obligations. Def. Br. at 25. In the alternative, Siemens argues that Count Three is duplicative of Red Hawks breach of contract claim and fails to state an unjust enrichment claim because it does not establish that Siemens accepted a benefit beyond its contractual right. Id. at 32-33. The Court disagrees that the economic loss doctrine bars Count Three but nonetheless finds it must be dismissed.
Under a liberal reading of the Amended Complaint, it appears that Red Hawks unjust enrichment claim is at least in part predicated on its breach of contract claim. See Am. Compl. ¶ 36 (Siemens deceptively and fraudulently obtained contracts that were rightfully due to DPSI, due to an improper termination of the Distribution Agreement, as well as defaming DPSI.) (emphasis added). The Court therefore finds that Count Three is limited to an alternative theory of liability to Count One, and the economic loss doctrine does not bar that claim. See MK Strategies, LLC v. Ann Taylor Stores Corp., 567 F. Supp. 2d 729, 736 (D.N.J. 2008) (This Court has regularly permitted claims for both unjust enrichment and breach of contract to proceed at the motion to dismiss stage, finding that dismissal of one of these claims would be premature.).
Yet, although Count Three could proceed as an alternative theory to Count One if properly pled, it fails to sufficiently state an unjust enrichment claim and must be dismissed. The doctrine of unjust enrichment rests on the equitable principle that a person shall not be allowed to enrich himself at the expense of another. Goldsmith v. Camden County Surrogates Office, 408 N.J. Super. 376, 382 (N.J. Super. 2009) (internal quotation marks and citation omitted). To state a claim for unjust enrichment in New Jersey, Red Hawk must allege that it conferred a benefit on Siemens and Siemenss retention of that benefit without payment would be inequitable. See Hassler v. Sovereign Bank, 644 F. Supp. 2d 509, 519 (D.N.J. 2009), aff‘d, 374 F. Appx 341 (3d Cir. 2010). Red Hawk must also show that it expected remuneration from Siemens at the time it performed or conferred a benefit . . . and that the failure of remuneration enriched [Siemens] beyond its contractual rights. See VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994).
Here, even under a liberal reading, the Amended Complaint does not allege facts demonstrating that DPSI conferred a benefit on Siemens with the expectation of remuneration. Instead, it alleges that Siemens received a benefit in the form of a subcontractor bid on the Escondido Union School District, Mission Middle School modernization project which rightfully belong[ed] to DPSI. Am. Compl. ¶¶ 14-15, 17, 37. On their face, these allegations indicate that Siemens received something from a third partynot from Red Hawk or its predecessors. In addition, even if the Court were to accept the alleged benefit as one conferred by Red Hawk or one of its predecessors, the Amended Complaint fails to allege that those entities expected remuneration from Siemens and that Siemenss retention of that benefit without payment to Red Hawk would be inequitable. These deficiencies warrant dismissal of Count Three.
Siemens asserts that the economic loss doctrine bars Counts Three and Four because those claims are based upon the wrongful termination of the Agreements by Siemens, and thus are intrinsic to the alleged [b]reach of [c]ontract [c]ount. Def. Br. at 26. The Court disagrees.
Counts Four and Five claim that Siemens intentionally interfered with contracts DPSI had with customers to provide labor and or materials related to [Plaintiffs] rights under the Distributor Agreements by contacting the parties contracting and stating that [Plaintiff] would not be able to provide materials required to perform and that Siemens had terminated the Distribut[or] Agreements. See Am. Compl. ¶¶ 42-44, 50-52. The Amended Complaint also alleges that Siemens contacted those customers after it had terminated the Distributor Agreements and identifies the existing and potential projects with which Siemens allegedly interfered. Id. ¶¶ 12-20.
Viewing these allegations in Red Hawks favor, at this juncture, the Court finds that the economic loss doctrine does not bar Counts Four and Five. Contrary to Siemenss contention, it does not appear from the face of the Amended Complaint that Red Hawks tortious interference claims are wholly predicated on Siemenss alleged improper termination of the Distributor Agreements. See Def. Br. at 26. While Red Hawks claims, in part, involve customers who had pre-existing contractual relationships with DPSI in furtherance the Distributor Agreements, those relationships do not bar Red Hawks tortious interference claims because: (1) the Amended Complaint does not allegenor is that apparent from the Distributor Agreementsthat those pre-existing contractual relationships were dependent on the Distributor Agreements such that any claims arising from them would be intrinsic to the Agreements; and (2) the Amended Complaint alleges tortious interference by Siemens after the Distributor Agreements were terminated with
iv. Counts Six and Seven: Fraud and Fraudulent Misrepresentation
Siemens next argues that the economic loss doctrine bars Counts Six and Seven because they relate to the performance of the Agreement between Siemens and DPS INC and are directly predicated upon alleged actions and/or omissions by Siemens in the termination of the Agreements. Def. Br. at 29. Siemens also contends that Counts Six and Seven fail to state fraud and fraudulent misrepresentation claims because Siemenss conduct fell within that expressly permitted by the Distributor Agreement. Id. at 34. The Court agrees that the economic loss doctrine bars Counts Six and Seven.
The threshold question regarding the economic loss doctrines applicability to fraud and contract claims plead together is whether the allegedly tortious conduct is extraneous to the contract. Fischell v. Cordis Corp., No., 2016 WL 5402207, at *8 (D.N.J. Sept. 26, 2016) (citation omitted). For example, a claim of fraud in the inducement of a contract may proceed alongside a breach of contract claim because the former is based on pre-contractual misrepresentations that are extrinsic to the parties agreement. Grasso Foods, Inc. v. Wynn Envir‘tl Sales Co., No. 17-6430, 2018 WL 3455479, at *3 (D.N.J. July 18, 2018). Thus, to survive, the plaintiff must allege misrepresentations that precede the actual commencement of the agreement, see Chen v. HD Dimension, Corp., No. 10-863, 2010 WL 4721514, at *8 (D.N.J. Nov. 15, 2010), or having no relation to the agreement.
Here, the economic loss doctrine bars Counts Six and Seven because those claims are based on alleged tortious conduct during Siemenss performance of the Distributor Agreements.
v. Count Eight: Defamation
Finally, Siemens argues that the economic loss doctrine bars Count Eight because the claim is based solely on the parties contractual relationship under the Distributor Agreements. Def. Br. at 30. In addition, Siemens asserts that Count Eight fails to state a claim for defamation, in part, because it contains no facts suggesting that whatever statements were made harmed the business reputation of DPS INC in the community. Def. Br. at 35. The Court disagrees.
Siemens points to no authority supporting its assertion that the economic loss doctrine bars Red Hawks defamation claim. It appears that there is no authority on the issue in this Circuit or in New Jersey. The Court is aware of only one out-of-jurisdiction federal case directly addressing
When the New Jersey Supreme Court has not issued a decision directly on point, the Court is charged with predicting how it would resolve the question in issue. Yohannon v. Keene Corp., 924 F.2d 1255, 1264 (3d Cir. 1991). The reasoning underlying each of the above-mentioned cases is consistent with the governing principle for analyzing whether the economic loss doctrine applies: courts must determine whether the alleged defamation claim arises under or is independent of the parties contract. The Court has no reason to believe the New Jersey Supreme Court would rule otherwise.
Reading the Amended Complaint liberally, here, the Court finds that the economic loss doctrine does not bar Red Hawks defamation claim. The Amended Complaint alleges Siemens falsely advised general contractors to a project that DPSI would not be able to provide the
Having found the economic loss doctrine does not bar Count Eight, the Court now turns to Siemenss alternative argument: whether Count Eight is pled with sufficient particularity to survive a motion to dismiss. To state a claim for defamation under New Jersey law, the plaintiff must allege: (1) the assertion of a false and defamatory statement concerning another; (2) the unprivileged publication of that statement to a third party; and (3) fault amounting at least to negligence by the publisher. Ross v. Bd. of Educ. Greater Egg Harbor Regional High School Dist., 658 F. Appx 97, 100 (3d Cir. 2016) (quoting DeAngelis v. Hill, 180 N.J. 1, 13 (2004)). A defamatory statement is one that is false and injurious to a partys reputation. Taj Mahal Travel, Inc. v. Delta Airlines Inc., 164 F.3d 186, 189 (3d Cir. 1998). At the motion to dismiss stage, the plaintiff need not identify the precise defamatory statements made by the defendant. See Mangan v. Corporate Synergies Grp., Inc., 834 F. Supp. 2d 199, 204 (D.N.J. 2011).
The Court finds that Count Eight sufficiently states a claim for defamation. Count Eight alleges that Siemens published false statements about DPSI to its potential customers (e.g. that
Siemenss argument that qualified privilege protects its alleged defamatory statements is unpersuasive and premature at this stage. Under New Jersey law, qualified privilege protects defamatory statements if the person communicating the alleged defamation and the audience have a commensurate interest or duty in the communication. Mangan, 834 F. Supp. 2d at 207 (citation omitted). The privilege recognizes that in particular situations . . . private people [should] be able freely to express private concerns to a limited and correlatively concerned audience. Bainhauer v. Manoukian, 215 N.J. Super. 9, 36 (App. Div. 1987). Courts determining whether qualified privilege applies to bar a defamation claim must assess: (1) the appropriateness of the occasion on which the defamatory information is published; (2) the legitimacy of the interest thereby sought to be protected or promoted; and (3) the pertinence of the receipt of that information by the recipient. Id. at 40. However, to determine whether qualified privilege applies under the circumstances here, the Court would need to take notice of specific facts outside of the [Amended] Complaint and such [c]onsideration of matters outside the pleadings . . . is generally not permitted in a
Based on the foregoing, Plaintiff has pleaded sufficient facts to plausibly state a defamation claim, and that claim may proceed. Siemens may later raise the qualified privilege issue in any
C. Rule 12(f) Motion to Strike
In its motion to dismiss, Siemens argues that Red Hawks requests for punitive damages and a jury trial must be stricken from the Amended Complaint. The Court grants Siemenss motion to strike Red Hawks jury demand but denies its motion with respect to punitive damages.
1. Jury Demand
Siemens argues that Plaintiff waived its right to a jury trial in executing the Distributor Agreements. Under
2. Damages
Siemens next argues that the Court should strike Red Hawks request for punitive damages based on the Distributor Agreements limitation on liability provisions and because punitive damages are not recoverable in contract. Def. Br. at 38. The Court disagrees.
While Siemens is correct that punitive damages may not be awarded for contractual claims, see Thomas v. Nova Southeastern Univ., 468 F. Appx 98, 100 (3d Cir. 2012) (citing Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1194 (3d Cir. 1993)), the Amended Complaint does not merely assert contractual claimspunitive damages may certainly be available for Red Hawks defamation claim. See W.J.A. v. D.A., 210 N.J. 229, 241 (explaining that, under New Jersey law, punitive damages . . . may be awarded in a defamation case).
In addition, whether the limitation of liability provisions in the Distributor Agreements restrict or limit Red Hawks damages involves factual issues that are inappropriate for resolution on a motion to dismiss. For example, Siemens relies on a limitation of liability provision that appears to cap Red Hawks potential damages at $100,000 rather than foreclosing Red Hawk from pursuing any damages, see Def. Br. at 14 (quoting Johnson Decl., Exs. 5-7 § 19), and Red Hawk claims that the limitation of liability provisions are unconscionable, Pl. Br. at 19. Accordingly, at this stage, the Court finds that the Amended Complaint sufficiently states a claim for damages, and Siemenss motion to strike Red Hawks demand for punitive damages is denied. See Berman v. ADT LLC, No. , 2013 WL 6916891, at *8 (D.N.J. Dec. 13, 2013) (It is inappropriate for the Court to wade into factual issues, such as the measure of Plaintiffs damages, on a motion to dismiss.). Siemens may raise any issues concerning damages on a motion for summary judgment after discovery.
IV. CONCLUSION
For the reasons set forth herein, Defendants Motion to Dismiss the Amended Complaint and Strike Claims, ECF No. Plaintiffs Amended Complaint, ECF No. 29.1, is GRANTED in part and DENIED in part. Red Hawks Motion to Strike, ECF No. 38, is GRANTED.7 An appropriate Order follows.
Dated: March 30, 2020
/s Madeline Cox Arleo
Hon. Madeline Cox Arleo
UNITED STATES DISTRICT JUDGE