MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Katherine Shadle’s Motion for Judgment on the Pleadings (doc. 126), filed on November 12, 2013. For the reasons discussed below, the Court GRANTS the Motion.
I.
BACKGROUND
This case arises out of an employer’s allegedly fraudulent representations concerning its financial status as well as its alleged failure to transfer the full amount of retained bonus payments as required under two employment contracts. In 2009, Plaintiffs Kimberly Hoffman and Patti Pate-Schnure both entered into employment contracts with Defendant America-HomeKey, Inc. (“AHK”) in 2009 to serve as Senior Vice Presidents. Doc. 108, Am. Compl. ¶¶ 17-18. In these positions; both assumed responsibilities to manage the company’s Southeast Branch offices. ■ Id. Pursuant to these contracts, Plaintiffs were entitled to receive a monthly bonuses equal to 50 % of the net, pre-tax profits of the southeastern branches. Id. ¶ 19. Plaintiffs could request to receive less than their monthly bonuses in order to maintain reserves for future or anticipated losses, or in order to maintain an operational reserve. Id. ¶ 20. The contracts also provided that when either party terminated the contracts, any reserve funds, including bonuses, would be transferred to Plaintiffs within 30 days. Id. ¶ 21.
Plaintiffs requested to be paid less than their monthly bonuses for certain months in 2009, and AHK withheld those funds for deposit in the future/anticipated losses or operational reserve. Id. ¶¶ 22-23. AHK also allegedly withheld Plaintiffs’ bonuses for three months in 2011 without authorization. Id. ¶ 24. When AHK terminated Plaintiffs’ employment contracts on November 15, 2011, it failed to pay Plaintiffs the bonus payments that it had withheld in 2009 and 2011 within 30 days. Id. ¶¶ 25-26.
Plaintiffs filed a Complaint in the State Court of Cobb County in Georgia, alleging causes of action for breach of contract, unjust enrichment, conversion, fraud, and negligent misrepresentation. Doc. 1, Notice of Removal 1. Subsequently, Defendant Alcazar, with the consent of all Defendants, removed the case to the United States District Court for the Northern District of Georgia. Id. Following Defendant AHK’s Motion to Transfer Venue, the case was transferred to this Court in the Northern District of Texas. Doc. 41, Order. All of the defendants have been sporadically represented by counsel throughout the course of this litigation, and Shadle filed the instant Motion for Judgment on the Pleadings during a period in which she was represented by counsel, on November 12, 2014. Doc. 126, Def.’s Mot.
II.
LEGAL STANDARD
A Rule 12(c) motion for judgment on the pleadings “is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts.” Hebert Abstract Co. v. Touchstone Props., Ltd.,
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) authorizes the Court to dismiss a plaintiffs complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). “[Plaintiffs must allege facts that support the elements of the cause of action in order to make out a valid claim.” City of Clinton v. Pilgrim’s Pride Corp.,
In order to survive a motion to dismiss, Plaintiffs must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
III.
ANALYSIS
Shadle moves for dismissal of all of Plaintiffs claims against her, including breach of contract, fraud, and negligent misrepresentation. Plaintiffs argue that they have properly pled each of these claims against Shadle. The parties’ respective arguments as to each claim will be addressed separately below.
A. Breach of Contract
Shadle first moves for dismissal of Plaintiffs’ breach of contract claim, arguing that, because she acted solely as a representative for AHK and was not a party to the employment contracts, she cannot be held individually liable for AHK’s breach of Plaintiffs’ employment contracts. In Texas, a party generally must be a party to a contract before she can be held liable for a breach of that contract. Ostrovitz & Gwinn, LLC v. First Specialty Ins. Co.,
In Texas, it is an elementary rule of law that privity of contract is an essential element of recovery in an action based on a contractual theory.... Indeed, except for third-party beneficiary and tor-tious interference theories ... in order to maintain an action to recover for breach of contract, privity must exist between the party damaged and the party sought to be held liable.
Norris v. Housing Auth. of Galveston,
Regardless of the lack of privity between Shadle and the plaintiffs, the parties focus much of their argument on what a party must show in order to hold a corporate officer liable for a corporation’s breach of contract. Shadle insists that, under Texas law, an officer or director cannot be held liable for breach of contract when she acts in a representative capacity and in good faith on behalf of the corporation. Doc. 126, Def.’s Br. 10. She reasons accordingly that because the Amended Complaint does not allege that she acted for personal gain or interest, she cannot be held personally liable for AHK’s breach. Id. at 10-11.
Plaintiffs respond by arguing that Texas law does, in fact, allow for a corporate agent who participates in a corporation’s breach to be held personally liable for breach of contract. Doc. 128, Pis.’ Resp. 3. They insist that their allegations that Sha-dle was a high-level executive, that she approved the employment contracts’ terms regarding bonuses, and that she approved AHK’s breach of these contracts are sufficient to hold Shadle personally liable for the corporation’s breach of contract. Id. at 4.
The parties’ arguments are more appropriately geared towards a claim for tor-tious interference, a claim which Plaintiffs fail to affirmatively assert against the Individual Defendants. Even if the Plaintiffs did assert a claim for tortious interference, however, their claim would fail because they do not allege that Shadle “acted in a manner so contrary to the corporation’s best interests that his or her actions could only have been motivated by personal interest.” ACS Investors, Inc. v. McLaughlin,
Finally, the cases that Plaintiffs rely on to show that a corporate officer can be held liable for a corporation’s breach of
Thus, for the reasons state above, Plaintiffs’ breach of contract claim against Sha-dle is hereby DISMISSED with prejudice.
B. Fraud
Shadle also moves to dismiss Plaintiffs’ fraud claims against her. Although it is not clear from Plaintiffs’ Complaint what fraud theory Plaintiffs sue under, Shadle maintains that Plaintiffs have failed to allege sufficient facts to satisfy the' Rule 9(b) heightened pleading standard under those fraud theories most relevant to Plaintiffs’ allegations, including fraudulent inducement, fraud by omission, or common law fraud.
To establish fraud in Texas, a plaintiff must show that
(1) a material representation was made; (2) it was false when made; (3) the defendant either knew it was false or made it recklessly without any knowledge of its truth; (4) the defendant made the false material representation with the intent that it should be relied upon by the plaintiff; (5) the plaintiff relied on the representation; and (6) the plaintiff suffered injury.
Smith v. BCE Inc.,
1. Common law fraud
Plaintiffs allege that Defendants collectively made a number of misrepresentations that are sufficient to support a claim of fraud. They specifically allege that Defendants, including Shadle, authorized Terrell to represent to Plaintiffs that they could elect to be paid less in their monthly bonuses in order to retain reserves for future/anticipated losses and operational reserve, doc. 108, Am. Compl. ¶¶ 82-84; that Defendants promised that Plaintiffs would be paid any of these reserve amounts upon termination of their employment contracts, id. ¶ 85; that Defendants “willfully misled Plaintiffs regarding the availability” of their bonuses, id. ¶ 87; and that Defendants “repeatedly and willfully misled Plaintiffs regarding the worsening financial situation” of Defendant AHK, id. ¶ 89. Plaintiffs maintain that these allegations were adequately specific to apprise Shadle of the nature of the claim against her as well as the statements upon which the claim is based. Doc. 128, Pis.’ Resp. 5-6.
Shadle, in turn, argues that Plaintiffs’ allegations are insufficient to establish a fraud claim because they fail to identify the time, place, or contents of any alleged false representations made by Shadle individually. Doc. 126, Def.’s Br. 13.
Plaintiffs’ allegations that Defendants “willfully misled” Plaintiffs regarding their bonuses or AHK’s financial situation lack the necessary specificity to satisfy the Rule 9(b) heightened pleadings standard. Such allegations fail to identify the contents, timing, or circumstances surrounding any statement made by Shadle, and therefore do not set out those facts that the Fifth Circuit has indicated are necessary to reach the level of particularity that is required under Rule 9(b). Plotkin,
Plaintiffs’ allegations that Shadle “authorized” Terrell to make specific representations regarding their bonuses and that Shadle “approved” parallel terms in their employment contracts are similarly insufficient to make out a claim for fraud. While more specific than Plaintiffs’ allegations that Defendants “misled” them, these allegations are still not sufficiently specific under Rule 9(b) because they do not provide any explanation as to why these statements were fraudulent. Plotkin,
Thus, to the extent that Plaintiffs attempt to make out a claim for common law fraud based on Shadle’s allegedly fraudulent representations, their claim is DISMISSED.
2. Fraudulent inducement
Fraudulent inducement “is a particular species of fraud that arises only in the context of a contract and requires the existence of a contract as part of its proof.” Haase v. Glazner,
Plaintiffs rely on the same statements regarding bonuses to make out their claims for fraudulent inducement as they do to make out their claims for common law fraud. Doc. 108, Am. Compl. ¶¶ 81-86. Consequently, Plaintiffs’ claims of fraudulent inducement fail for similar reasons that their claims for common law fraud fail. As noted above, Plaintiffs fail to plead sufficient facts to show that the alleged statements are false or that Shadle knew them to be false. Moreover, Plaintiffs provide no allegations to show that Terrell or any of the other Defendants had no intention of ensuring that Terrell’s promises concerning their bonuses would be carried out. Instead, Plaintiffs only allege that Terrell, Alcazar, and Caughron personally assured them, years after the contracts were entered into, that their bonuses would be paid, even though these defendants knew that the bonuses would not be paid. Doe. 108, Am. Compl. ¶¶ 29, 81, 34, 87. Such allegations say nothing about the intent of the parties when the promises were initially made, and they do not provide any basis for a fraudulent inducement claim against Shadle specifically.
Thus, to the extent that Plaintiffs attempt to make out a claim for fraudulent inducement, they fail to plead sufficiently specific facts to make out each element of their claim as to Shadle. Their fraudulent inducement claim against Shadle is therefore DISMISSED with prejudice.
3. Fraud by omission
Fraud by omission (or fraud based on nondisclosure) occurs where there is a duty to disclose information as a matter of law. Smith,
(1) conceals or fails to disclose a material fact within the knowledge of that party; (2) knows the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; (3) intends to induce the other party to take some action by concealing or failing to disclose the fact; and (4) the other party suffers injury as a result of acting without knowledge of the undisclosed fact.
(1) when there is a fiduciary relationship;. (2) when one voluntarily discloses information, the whole truth must be disclosed; (3) when one makes a representation, new information must be disclosed when that new information makes the earlier representation misleading or untrue; and (4) when one makes a partial disclosure and conveys a false impression.
Hoggett v. Brown,
“Although the nature of an omission renders it more difficult to plead with particularity than an affirmative misrepresentation, Plaintiffs must still comply with Rule 9(b).” Berry v. Indianapolis Life Ins. Co.,
Plaintiffs insist that they have sufficiently pled fraud by omission against Shadle. They argue that Shadle had a duty to disclose information regarding AHK’s financial and legal troubles because she was a high-level executive in the company and because she made representations and disclosures to Plaintiffs concerning AHK. Doc. 128, Pis.’ Resp. 8. While Plaintiffs admit that their allegations may lack specificity regarding the time, place, and content of Shadle’s fraudulent acts, they insist that, because she committed fraud by omission, it is impossible for Plaintiffs to identify every instance in which Shadle made a willfully inaccurate statement. Id. at 7.
Shadle maintains that Plaintiffs have failed to allege that she had a duty to disclose any information to them. Doc. 126, Def.’s Br. 14. She asserts specifically that Plaintiffs allege no circumstances that would impose a duty on Shadle, and she argues that the fact that she was a Vice-President of Operations imposes no duty to disclose information to Plaintiffs, who were also Senior Vice Presidents of AHK. Id.
Plaintiffs fail to plead sufficient facts from which the Court could infer that Shadle owed them a duty to disclose. Considering the different situations set forth in Hoggett, the Court first notes that Shadle did not owe Plaintiffs a fiduciary duty. Plaintiffs argue that because Sha-dle, as a high-level executive, owed AHK a fiduciary duty, she also owed them a duty as employees of AHK to inform them of AHK’s financial situation or the Texas Inspector General audit. Plaintiffs point to no authority to support this point, however,'-and such a fiduciary relationship between co-directors or co-employees of a company is not among the traditional formal relationships that Texas courts have recognized. Entm’t Merck. Tech., LLC v. Houchin,
As to the other three situations in which the court in Hoggett recognized that a duty may arise, Plaintiffs have similarly failed to plead sufficient facts to establish that Shadle owed.them a duty of disclosure. Plaintiffs allege that Defendants failed to apprise them of AHK’s deteriorating financial condition, despite Plaintiffs’ regular requests for financial and company information. Doc. 108, Am. Compl. ¶¶ 36-37, 89, 92. They also allege that Defendants failed to notify them of the Texas Inspector General audit of AHK. Id. ¶¶ 38-41, 90. Plaintiffs maintain that these bare assertions are sufficient to show that Shadle (1) disclosed information, and therefore had a duty to disclose “the whole truth”; (2) made representations regarding AHK’s financial situation, which then obligated her to update Plaintiffs as to AHK’s financial condition; and (3) willfully omitted critical information regarding AHK, thus falsely assuring them that the company was doing well. Doc. 128, Pis.’ Resp. 8-9. Contrary to Plaintiffs’ assertions, however, none of the allegations in their Complaint specify what information Shadle personally disclosed or what representations she personally made that would obligate her to make further disclosures. See Kelly Law Firm, P.C.,
Even assuming that Shadle did ■ have a duty to disclose under the circumstances here, Plaintiffs have failed to provide any details as to the communications between the parties such that the Court could determine “the place in which the omissions should have appeared” or “the way in which the omitted facts made the representations misleading.” Carroll,
C. Negligent Misrepresentation
When claims for fraud and negligent misrepresentation are based on the same set of alleged facts, Rule 9(b)’s heightened pleading standard generally applies to both. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC,
IV.
CONCLUSION
For the reasons stated above, Defendant Katherine Shadle’s Motion for Judgment on the Pleadings is hereby GRANTED as to all claims. Plaintiffs claims against Shadle are hereby DISMISSED with prejudice.
SO ORDERED.
Notes
. It is not clear from Plaintiffs’ allegations in ¶¶ 82-84 of their Complaint whether they intend to allege that all of the Individual Defendants made representations concerning Plaintiffs’ retained bonuses, or that Terrell made these representations with the other Individual Defendants’ authorization. Whatever Plaintiffs' intent, however, it does not alter the Court’s analysis below.
. Plaintiffs also assert that Defendants breached the cost-sharing provision of the arbitration clause in their employment contracts. Doc. 108, Am. Compl. ¶ 67. Neither party addresses this claim at all in their briefs, and it is unclear from the Complaint whether Plaintiffs intend to assert this claim against Shadle. See id. ¶¶ 51-55. Even if Plaintiffs did intend to assert that Shadle breached the contract by not abiding by the arbitration clause in Plaintiffs’ employment contracts, this claim would fail for the same reasons that Plaintiffs’ other breach of contract claims fail.
. Plaintiffs argue in their brief that the fact that Shadle has filed her Motion nearly 18 months after this litigation commenced indicates that she was well apprised of the nature of the claims against her. Doc. 128, Pis.' Resp. 5. Plaintiffs also reason that if the Complaint was so ill-pleaded, as Shadle alleges, then she would not have answered the Complaint or engaged in discovery, but would have immediately sought dismissal. Id. They also suggest that their claims must have adequate evidentiary support, or else Shadle would have moved for summary judgment rather than dismissal on technical pleading grounds. Id. Plaintiffs’ arguments on this point are misleading, however, and fail to recognize that Defendants have only been represented sporadically throughout the course of this litigation. Moreover, Shadle only filed her Motion once she retained separate counsel from the other Defendants, and that counsel has also recently withdrawn. Doc. 157, Mot. to Withdraw. Shadle’s failure to file her Motion earlier in the litigation therefore appears more a consequence of lack of financial means than subtle manipulation of the procedural rules. The Court refuses to infer from the late filing of this Motion that Shadle is somehow trying to avoid trial based on technical pleading grounds, especially when she was otherwise permitted by the Federal Rules to submit her Motion when she did.
. Although it is not clear from their pleadings, Plaintiffs may also intend to make out a claim for fraudulent inducement based on (1) their allegations that Terrell, Alcazar, and Cau-ghron personally assured them that they would receive their bonuses, and (2) their allegations that Defendants willfully misled Plaintiffs regarding the financial and legal situation of AHK. Doc. 108, Am. Compl. ¶¶ 87-90. These allegations are not specific enough to meet Rule 9(b)’s pleading standard, however, because they do not identify the time, place, or circumstances surrounding these statements, and they do not specify what statements, if any, were made by Sha-dle. Moreover, Plaintiffs do not allege that these statements induced them to enter a contract, which is a necessary showing for making out a fraudulent inducement claim. Haase,
. Because the Court determines that Plaintiffs fail to plead sufficient facts to make out any of their claims, it does not reach ,the parties’ arguments concerning the economic loss rule.
. The Court acknowledges that courts will