ORDER ON DEFENDANTS’ MOTIONS TO DISMISS
Introduction
The plaintiff in this case is MeterLogic, Inc. (“MeterLogic”), a Florida corporation. The defendants are Copier Solutions, L.L.C. (“CS”), a Missouri limited liability company; Telemetry Solutions, L.L.C. (“TS”), a Delaware limited liability company; KLT Telecom, Inc. (“KLT”), a Missouri corporation; KLT, Inc. (“KLT, Inc.”), a Missouri corporation; and Kansas City Power and Light Co. (KCPL), a Missouri corporation. MeterLogic has filed a six count amended complaint against these defendants, as follows: Count I, Fraud (against CS, TS, KLT, KLT, Inc., and KCPL); Count II, Negligent Misrepresentation (against CS, TS, KLT, KLT, Inc., and KCPL); Count III, Promissory Estop-pel (against CS, TS, KLT, KLT, Inc., and KCPL); Count IV, Indemnity (against CS and TS); Count V, Breach of Contract (against CS and TS); and Count VI, Pierce the Corporate Veil (against KLT, KLT, Inc., and KCPL). This court has subject matter jurisdiction under 28 U.S.C. § 1332.
MeterLogic claims monetary damages in the amount of $50,000,000.00 for CS’s and TS’s breach of contract, fraud, and misrepresentations. It claims that officers of CS and TS induced MeterLogic to enter into three related agreements by misrepresenting the economic and technological support that KLT, KLT, Inc., and KCPL (the “corporate parents” of CS and TS) would provide their business venture. MeterLogic seeks to hold KLT, KLT, Inc., and KCPL liable for their subsidiaries’ misrepresentations. The corporate parents deny any responsibility for the statements made to MeterLogic by CS and TS officers.
Each defendant has filed a motion to dismiss the amended complaint. As grounds for their motions, KCPL, KLT, and KLT, Inc. contest this court’s personal jurisdiction under Federal Rule of Civil
The Facts
For purposes of these motions to dismiss, the court accepts the following facts as true, as gleaned from MeterLogic’s amended complaint. 1
I. The Plaintiff
MeterLogic is a corporation organized and existing under the laws of the state of Florida with its principal place of business located in Florida at the time of the filing of the complaint. MeterLogic was, until recently, in the business of selling complete customer support for remote office equipment metering devices. MeterLogic is no longer in business.
II. The Defendant’s Corporate Structure
A. The Entities
CS manufactures remote metering and communications devices and provides metering services for copiers, fax machines, and printers. See Pl. Am. Compl. at ¶ 2. TS is the parent of CS. It is in the business of wireless telemetry and data acquisition. See Pl. Am. Compl. at ¶ 3. KLT, an investment company, is the majority shareholder of TS, and KLT is a wholly-owned subsidiary of KLT, Inc. See Pl. Am. Compl. at ¶¶ 3, 4. KLT, Inc. is a holding company for the nonregulated ventures of KCPL, which generates, transmits, and distributes electric energy. See Pl. Am. Compl. at ¶5. KLT, Inc., in turn, is a wholly owned subsidiary of KCPL, a publicly held corporation that is traded on the New York Stock Exchange. See Pl. Am. Compl. at ¶ 6. Each of the defendants is a Missouri entity. See Pl. Am. Compl. at ¶¶ 2-6.
B. The Individuals
Colin Dobell (“Dobell”) is the managing member of CS and TS. Ron Wasson (“Wasson”) and Mark English (“English”) are officers and/or directors of TS. Charles Hawley (“Hawley”) worked with Dobell to negotiate a contract between CS and TS and MeterLogic. While the complaint states that Hawley and Dobell told Meter-Logic they were also employees of KCPL, KLT, and KLT, Inc., see Pl. Am. Compl. at ¶¶ 13, 16, the fact of Hawley’s and Dobell’s employment by these corporations is not alleged in the complaint.
Along with James Gilligan (“Gilligan”), Wasson and English are also the officers and/or directors of KLT and KLT, Inc. Finally, Wasson is an officer of KCPL, and Joseph G. Jacobs III (“Jacobs”) is the Director of Business Development for KCPL.
II The Alleged Negotiations
In April of 1998, MeterLogic, through its president, Mary Ellen Marshall (“Marshall”), began discussing with potential business partners the possibility of entering into a venture to manufacture and sell certain remote metering and communications devices and to provide monitored metering services for copiers, fax machines, and printers to South Florida customers. Hawley contacted Marshall in December
On January 8, 1999, Hawley introduced Marshall via telephone to Dobell, who told Marshall that he too was an officer and employee of CS, TS, KLT, and KLT, Inc. See PI. Amend. Compl. at ¶ 15. The parties met in Ft. Lauderdale, Florida on January 18, 1999, to discuss “a possible business relationship between MeterLogic and CS, TS, KLT, KLT, Inc., and KCPL.” See PI. Am. Compl., ¶ 17. The vice-president of MeterLogic, Dobell, and Hawley attended this meeting.
A few weeks later, Marshall, Dobell, and Hawley met again in Ft. Lauderdale to negotiate a draft of their agreement. Throughout these discussions, Hawley and Dobell told Marshall that KCPL, KLT, and KLT, Inc. were firmly behind their proposed business venture, had agreed to provide funding, and could provide the necessary technology. When Marshall asked Dobell and Hawley why only CS and TS were parties to the agreement with MeterLogic, and KLT, KLT, Inc., and KCPL were not, Dobell and Hawley responded that “while KLT, KLT, Inc., and KCPL would not be identified in the agreement by name, they had developed, tested, owned, and would be standing behind the technology ..., that they had agreed to fund both CS’ and TS’ business plans with MeterLogic, they would be involved in all of the business decisions and would assist MeterLogic with their knowledge and resources whenever necessary.” PI. Am. Compl. at ¶ 19.
III. The Alleged Agreements
MeterLogic entered into its first agreement with CS and TS on March 31, 1999. The remaining defendants were not signatories to this contract. The alleged agreement created an alliance between MeterLogic, CS, and TS to deliver retail monitoring devices for copiers, fax machines, printers, and other similar office equipment. Under the contract, CS was to act as the service provider and perform all field installations, TS was to assure CS’s performance, and MeterLogic was to serve as the exclusive sales and marketing agent. The agreement was entered into by the parties in Florida. See PI. Am. Compl. at ¶ 22.
A press release of April of 1999 announced the parties’ alliance. The relevant language of the publication states:
[CS] is a subsidiary of KLT, Inc., the non-regulated division of [KCPL], [CS] is backed by the resources of the $3.1 billion [KCPL], one of the largest municipal electric utilities in the United States.... “We are pleased to have formed an alliance with MeterLogic to market these innovative automated metering products,” said Charlie Hawley, Executive Vice President and General Manager of [CS].
PI. Am. Compl. ¶ 28.
The parties’ problems began when CS and TS failed to manufacture, develop, and sell the products that were the subject of their first agreement with MeterLogic. As a result of this, the parties entered into an addendum to their agreement on July 5, 1999, and a second agreement later that same month. These were designed to protect MeterLogic in the event of default by CS and TS.
Analysis
I. Personal Jurisdiction
Each of the corporate parents (KCPL, KLT, and KLT, Inc.) argues that the court must dismiss the complaint filed against it pursuant to Federal Rule of Civil Procedure 12(b)(2) because this court lacks in personam jurisdiction. According to the corporate parents, MeterLogic can
A. Standard of Review
MeterLogic seeks to establish the court’s jurisdiction under 28 U.S.C. § 1332, the diversity statute. A federal court sitting in diversity may only exercise personal jurisdiction over a nonresident defendant to the extent permitted by the forum state’s long arm statute and if the exercise of jurisdiction comports with the requirements of due process.
See Vermeulen v. Renault U.S.A., Inc.,
Under Florida law, the plaintiff bears the burden of proving personal jurisdiction.
See Sculptchair, Inc. v. Century Arts, Ltd.,
C. Florida’s Long Arm Statute
As mentioned above, a district court must engage in a two-part analysis in determining whether it has personal jurisdiction over a nonresident defendant. Jurisdiction must exist under Florida’s long arm statute (Fla.Stat. § 48.193) and under Fourteenth Amendment due process analysis.
See Future Technology Today, Inc.,
(1) Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the following acts:
(a) Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state.
(b) Committing a tortious act within this state....
(f) Causing injury to persons or property within this state arising out of an act or omission by the defendant outside of this state, if, at or about the time of injury, either:
1. The defendant was engaged in solicitation or service activities within this state; or
2. Products, materials, or things processed, serviced, or manufactured by the defendant anywhere were used or consumed within this state in the ordinary course of commerce, trade, or use.
Upon a review of the pleadings and supporting affidavits, 3 the court finds that Me-terLogic has failed to allege and substantiate the necessary facts to provide the court with personal jurisdiction over any of the corporate parents under these provisions.
1. Carrying on a Business in Florida
It is clear from the affidavits submitted by the corporate parents that KCPL, KLT, and KLT, Inc. have never had an office of agency in Florida as required by Fla. Stat. § 48.193(l)(a), and MeterLogic does not show otherwise.
See
Latz Affidavit at ¶¶ 5-7; Orman Affidavit at ¶¶ 6-12; Wasson Affidavit at ¶¶ 6-12. As a result, Fla. Stat. § 48.193(l)(a) authorizes jurisdiction over KCPL, KLT, and KLT, Inc. only if they were carrying on a business or business venture within Florida. In order to make such a showing, “[t]he activities of the [defendant] sought to be served ... must be considered collectively and show a general course of business activity in the State for pecuniary benefit.”
Future Technology Today, Inc.,
MeterLogic has not alleged that the corporate parents have directly carried on any activities within Florida, and it has failed to rebut their denial of doing business in the state. The affidavit submitted by KCPL in support of its motion to dismiss states, “KCPL has never done business with or had a relationship with Me-terLogic in the State of Florida or any other state.” Latz Affidavit at ¶ 5. KLT’s and KLT, Inc.’s affidavits in support of their motions make similar statements. See Orman Affidavit at ¶¶ 6, 7; Wasson Affidavit at ¶¶ 6, 7.
If the corporate parents have never carried on a business venture in Florida directly, then MeterLogic can establish jurisdiction under Fla. Stat. § 48.193(l)(a) only if the corporate parents could be held responsible for their subsidiaries’ (CS and TS) activities in Florida. The rule in this state is that the presence of a subsidiary corporation, such as CS or TS, within Florida is not enough to subject a nonresident parent corporation to the state’s long arm
2. Committing a Tort in Florida
MeterLogic also argues that Fla. Stat. § 48.193(l)(b) provides the court with personal jurisdiction over the corporate parents. For personal jurisdiction to attach under the “tortious activity” subsection of Florida’s long arm statute, MeterLogic must show that these defendants “committed a substantial aspect of the alleged tort in Florida.”
L.O.T.I. Group Productions v. Lund,
a. Agency
In its opposition to the corporate parents’ motions to dismiss, MeterLogic argues that this court has personal jurisdiction over the defendants because CS and TS were agents for the parent corporations and that this agency relationship necessitates piercing of the corporate veil. KCPL, KLT, and KLT, Inc. contend that there is insufficient proof from which the court can conclude that CS and TS (more specifically, Dobell and Hawley) were acting under the corporate parents’ express or apparent authority when they were negotiating with MeterLogic.
In order to establish an agency relationship in Florida, a party must show: (1) acknowledgment by the principal that the agent will act for it; (2) the agent’s acceptance of the undertaking; and (3) control by the principal over the actions of the agent.
See Keys Jeep Eagle, Inc. v. Chrysler Corp.,
Acknowledgment: MeterLogic has not established the first requirement for an agency relationship because it has not shown that KCPL, KLT, or KLT, Inc. acknowledged that CS or TS (more specifically, Hawley or Dobell) were acting act on their behalf.
4
The rule is clear that “[a]p-parent authority does not arise from the subjective understanding of the person
In this case, MeterLogic is arguing that apparent authority arose from the precise conduct that
Ja Dan
and
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tell us will not establish an agency relationship — the subjective understanding of the plaintiff and the appearance created by Dobell and Hawley.
5
It asserts that an agency relationship existed between CS and TS and the corporate parents because Dobell and Hawley (the only individuals with whom MeterLogic negotiated the contract) indicated they were “acting and speaking on behalf of CS, TS, KLT, KLT, Inc., and KCPL.” PI. Amend. Compl., ¶¶ 14, 16. MeterLogic presents no evidence by affidavit or otherwise that KCPL, KLT, or KLT, Inc. confirmed th'e truth of Dobell’s or Hawley’s statements.
6
It has not pled that Dobell and Hawley were actually employees, officers, or directors of KCPL, KLT, or KLT, Inc. It has only alleged that they claimed to be. MeterLogic has not pled or shown that KCPL, KLT, or KLT, Inc. financed the business venture between CS and TS and MeterLogic or engaged in any conduct from which MeterLogic could conclude that the corporate parents were authorizing CS and TS to act on their behalf.
7
All of these are allegations that would have affirmatively established the court’s personal jurisdiction.
Compare John Scott, Inc. v. Munford, Inc.,
Not only has MeterLogic failed to submit sufficient proof of an agency relationship, but the corporate parents have submitted undisputed affidavits to establish that they never authorized Dobell, Hawley, CS, or TS to act on their behalf. For example, KCPL has stated that it never employed any of the individuals referenced in MeterLogie’s complaint (English, Scott, Wasson, Gilligan, or Hawley), and it never permitted any of the individuals to act on behalf of KCPL regarding business ventures with MeterLogic. See Latz Affidavit, ¶ 11. KLT and KLT, Inc. similarly submit that no KLT or KLT, Inc. agent, employee, or representative has ever traveled to Florida to meet with MeterLogic or negotiate a business venture. See Wasson Affidavit, ¶¶ 17. Orman Affidavit, ¶¶ 17-19. Only one employee of KCPL (Joseph Jacobs) worked for CS, but this was not until July 27, 1999, which is after the alleged tortious conduct occurred and the parties had entered into the agreements. See id. at ¶ 12. Jacobs did not receive a salary from KCPL for the time he worked for CS, and MeterLogic has not presented any evidence to show otherwise. -See id. KCPL also denies preparing or authorizing the press release that announced the business venture between MeterLogic and the “subsidiaries” of KCPL. See id. at ¶ 13. MeterLogic’s failure to refute any of this evidence prevents it from establishing an agency relationship between CS and TS and their corporate parents.
Control: Even if MeterLogic were able to establish acknowledgment by the corporate parents, its agency argument still would fail because it has failed to establish by affidavits or otherwise that KCPL, KLT, or KLT, Inc. controlled CS and TS. Absent control of a subsidiary by a parent, there can be no finding of agency.
See American Tobacco Co.,
According to Florida courts, “the amount of control the parent exercises must be very significant.”
American Tobacco Co.,
John Scott, Inc. v. Munford, Inc.,
the subsidiary received financing from the parent for the transaction that was the subject of the suit; the parents’ employees were paid by the subsidiary for their work in connection with the transaction; the parent’s annual reports referred to the subsidiary’s manufacturing plants as its own; a representative of the parent corporation met with the plaintiff corporation to negotiate the transaction in question; purchase orders were sent to the parent corporation; the subsidiary acted on behalf of the parent in attempting to renegotiate prices of the contract; and an employee of theparent had the power and exercised it in reviewing the contract entered into between the subsidiary and the parent.
American Tobacco Co.,
The facts alleged or otherwise supported by MeterLogic fall short of those established in John Scott. In support of its conclusory argument that CS and TS were the agents of KCPL, KLT, and KLT, Inc., MeterLogic alleges that Hawley and Do-bell never made any attempt to distinguish whether they were acting on behalf of the corporate parents or their subsidiaries. Am. Compl, ¶¶ 14, 16. MeterLogic also states that Hawley and Dobell stated that they had the backing of KCPL, KLT, and KLT, Inc. See Am. Compl. ¶ 19. It is important to note, however, that Meter-Logic fails to introduce any evidence of the parents’ acknowledgment of this responsibility. According to MeterLogic’s complaint and Marshall’s affidavit, the only individuals that MeterLogic ever spoke with in Florida, and the only individuals that committed the alleged misrepresentations, were Hawley and Dobell. Nowhere in the complaint or in Marshall’s affidavit does MeterLogic show that Hawley and Dobell are actually representatives or employees of the corporate parents or that the corporate parents ever acknowledged Hawley’s and Dobell’s activities during the time of their allegedly tortious conduct or during the time CS and TS and MeterLogic were negotiating the contracts.
In short, MeterLogic has failed to introduce any additional evidence or make allegations similar to the ones made by the plaintiff in
John Scott,
namely, that CS and TS received funding from KCPL, KLT, or KLT, Inc.; that the business activities of CS and TS and their parents overlapped; that it met with a representative of the parent (other than Dobell or Hawley, who, as discussed above, were only employees of CS and TS); or that the parents reviewed the contracts that are the subject of this dispute. Instead, what arises from the pleadings, motions, and affidavits filed in support of both sides’ arguments is an image of corporate parents allowing their subsidiaries to run autonomously.
See
Latz 2d Affidavit, ¶ 6. Without an indication by MeterLogic that KCPL, KLT, or KLT, Inc. were more involved in the control of the day to day activities of their subsidiaries, this court cannot find that the plaintiff has satisfied the control requirement.
See American Tobacco Co.,
b. Piercing the Corporate Veil
In addition to proceeding under an agency theory, a court may properly assume personal jurisdiction over a corporate parent if the plaintiff can show that the subsidiary is an alter ego of a parent corporation, such that the corporate veil can be pierced. In order for a court to pierce the corporate veil, a plaintiff must show (1) that the subsidiary is a mere instrumentality of the parent and (2) improper conduct.
See Johnson Enter, of Jacksonville, Inc. v. FPL Group, Inc.,
KCPL, KLT, and KLT, Inc. have satisfied their burden of refuting both of Me-terLogic’s allegations. The affidavit of Je-ane S. Latz, which was filed by KCPL in support of its motion to dismiss, states, “KCPL and its corporate subsidiaries maintain separate offices and bank accounts.” Latz Affidavit, ¶ 8. MeterLogic has not introduced any evidence to contradict this. Latz’s affidavit also states, “KCPL has not received any assets from any of its subsidiaries, including dividends. KCPL has not permitted any of these individuals ... [including Hawley] to act on its behalf regarding any transaction or business venture involving MeterLogic.” Latz Affidavit, ¶ 11,14. Latz’s second affidavit states, “KCPL does not act in a supervisory capacity over its corporate subsidiaries’ employees. KCPL has never shared space with [CS] or [TS].” Latz 2d Affidavit, ¶ 6, 7. Again, MeterLogic has failed to contradict these statements.
Even if the corporate parents had not met their burden, the sharing of a business address and the overlap of officers is insufficient to support a finding that the subsidiaries are the alter ego of their corporate parents. In
Advertects, Inc. v. Sawyer Industries, Inc.,
The mere fact that one or two individuals own and control the stock structure of a corporation does not lead inevitably to the conclusion that the corporate entity is a fraud or that it is necessarily the alter ego of its stockholders to the extent that the debts of the corporation should be imposed upon them personally. If this were the rule, it would completely destroy the corporate entity as a method of doing business and it would ignore the historical justification for the corporate enterprise system.
Id. at 24;
see also Lipsig v. Ramlawi,
Without more, KCPL, KLT, and KLT, Inc. are not subject to the court’s personal jurisdiction under a theory of piercing the corporate veil.
See Hobbs v. Don Mealey Chevrolet, Inc.,
3. Causing Injury in Florida
As a final basis for jurisdiction, MeterLogic contends that Fla. Stat. § 48.193(1)(f) authorizes the court’s exercise of personal jurisdiction over the corporate parents because MeterLogic’s injuries occurred in Florida. MeterLogic’s argument fails because Fla. Stat. § 48.193(1)(f) does not confer jurisdiction when the plaintiffs injuries are merely economic, as they are in this case.
See Sculptchair, Inc. v. Century Arts, Ltd.,
II Failure to State a Claim
The remaining defendants, CS and TS, seek to dismiss Counts I (Fraud), II (Negligent Misrepresentation), III (Promissory Estoppel), and IV (Indemnity) under Federal Rule of Civil Procedure 12(b)(6). According to the defendants, MeterLogic has not alleged sufficient facts in its complaint to support each of these theories of recovery. The court concludes that MeterLogic has stated claims for Counts I, II, and III, but it has failed to state a claim for Count IV.
A. Standard of Review
To warrant dismissal of a complaint under Rule 12(b)(6) of the Federal Rules of Civil procedure, it must be “clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.”
Blackston v. Alabama,
B. Fraud
Count I of MeterLogic’s amended complaint is for fraud against CS and TS.
9
CS and TS seek to dismiss this count under the following grounds: failure to plead with sufficient particularity under Federal Rule of Civil Procedure 9(b), the economic loss rule, presence of an integration clause in the agreement, and failure to satisfy the
1. Federal Rule of Civil Procedure 9(b)
CS and TS move to dismiss count I of MeterLogic’s complaint, arguing that MeterLogic has failed to properly plead its fraud claim as required by Federal Rule of Civil Procedure 9(b).
10
Rule 9(b) of the Federal Rules of Civil Procedure provides that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed.R.Civ.P. 9(b). This rule “serves an important purpose in fraud actions by alerting defendants to the ‘precise misconduct with which they are charged’ and protecting defendants ‘against spurious charges of immoral and fraudulent behavior.’ ”
Durham v. Business Management Assoc.,
Rule 9(b) may be satisfied if the complaint sets forth:
(1)precisely what statements were made in what documents or oral representations or what omissions were made, and
(2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and
(3) the content of such statements and the manner in which they misled the plaintiff, and
(4) what the defendants “obtained as a consequence of the fraud.”
Medalie v. FSC Securities Corp.,
When pleading fraud, the plaintiff generally should specifically identify the individuals who made the alleged misrepresentations, the time of the alleged fraud, and the place of the alleged fraud.
See Anthony Distributors, Inc. v. Miller Brewing Co.,
According to CS and TS, Meter-Logic has failed to comply with these standards because its allegations are too vague to satisfy Rule 9(b). The court has reviewed the record and agrees with Meter-Logic that its allegations are pleaded with sufficient particularity. MeterLogic’s allegations of fraud are contained in paragraphs 32 through 36 of the complaint. In sum, MeterLogic states that Hawley and Dobell told MeterLogic that KCPL, KLT, and KLT, Inc. were firmly behind the business venture that was going to be formed between MeterLogic and CS and TS; that the corporate parents owned the technology that the business venture required; and that the technology was readily available for MeterLogic’s use during the course of the venture. Each of these allegations are accompanied by dates that range from December 31, 1998 to June 29, 1999. The factual allegations common to all counts specify the places where the statements were made. MeterLogic also states that, as a consequence of these representations by CS and TS, it “agreed to go forward with the Agreements and did not seek out other business partners with whom to conduct business.... [and] suffered damages and will continue to suffer damages in an amount in excess of Fifty Million ($50,000,000.00) Dollars.” PI. Am. Compl. at ¶ ¶ 42, 43.
These allegations provide CS and TS with sufficient information to satisfy the heightened pleading requirement of Rule 9(b). MeterLogic has given the defendants the “who, what, where, and when” of the alleged fraud that took place. While MeterLogic need not provide the exact time and place of all the meetings, it does provide this information for some of the statements. In any event, it supplies a sufficiently narrow time frame from which CS and TS could be on notice as to when these statements were made. Accordingly, the defendants’ motion to dismiss Me-terLogic’s fraud claim for failure to comply with Federal Rule of Civil Procedure 9(b) is denied.
2. The Economic Loss Rule
As an alternative theory, CS and TS move to dismiss Count I of MeterLogic’s complaint by arguing that the fraud claim is barred by the economic loss rule.
11
In
HTP, Ltd. v. Lineas Aereas Costarricenses, S.A.,
[fjraud in the inducement presents a special situation where parties to a contract appear to negotiate freely — which normally would constitute grounds for invoking the economic loss doctrine — but where in fact the ability of one party to negotiate fair terms and make an informed decision is undermined by the other party’s fraudulent behavior....
The distinction between fraud in the inducement and other kinds of fraud is the same as the distinction drawn by a New Jersey federal district court betweenfraud extraneous to the contract and fraud interwoven with the breach of contract. With respect to the latter kind of fraud, the misrepresentations relate to the breaching party’s performance of the contract and do not give rise to an independent cause of action in tort.
Id.
(citing
Huron Tool & Eng’g Co. v. Precision Consulting Servs.,
In this case, the plaintiffs fraud claim is sufficient to survive the economic loss rule because MeterLogic has shown, for purposes of these motions to dismiss, that OS’s and TS’s alleged fraud is separate and distinct from their performance of the agreements. CS and TS argue that Me-terLogic has failed to plead a ease for a tort independent of the alleged breach of contract, but a careful review of Meter-Logic’s amended complaint refutes the defendants’ argument. MeterLogic’s complaint alleges that prior to the date the parties entered into their agreements, agents of the defendants made material misrepresentations on which MeterLogic relied to induce them to enter into the agreements. See PI. Am. Compl. at ¶¶ 32-35. Included among the misrepresentations were CS’s and TS’s promises to develop, manufacture, provide, and service certain technology. CS and TS are correct in arguing that these representations, which are part of MeterLogic’s fraud claim, are the same allegations that form the breach of contract claim. See PL Am. Compl. at ¶ 32. It is also true, however, that CS and TS allegedly made some statements that were not part of the contract. The most important representation being that KCPL, KLT, and KLT, Inc. “were firmly behind their proposed business arrangements, ..., had funded the development ... of the technology, ... [and] owned the technology....” PI. Am. Compl. at ¶¶ 32, 33. These statements were not embodied in the parties’ contracts, and they are the types of allegations that fall under the justification for the fraud exception to the economic loss rule described in Hotels. The ability of MeterLogic to negotiate fair terms and make a truly informed decision has been undermined by these misrepresentations. For example, had MeterLogic known that KCPL, KLT, and KLT, Inc. were not really behind the contracts, MeterLogic could have protected itself by agreeing to different terms or refusing to enter into the agreements altogether.
To the extent that CS and TS induced MeterLogic into signing a contract based upon a promise that their corporate parents would ensure the success of the business venture, MeterLogic’s fraud claim can be maintained. Accordingly, MeterLogic’s fraud claim survives the economic loss rule defense, and the defendants’ motion to dismiss Count I under the economic loss rule is denied.
3. The Integration Clause
As a third basis for their motions to dismiss, CS and TS argue that the parties’ March 31 contract contains an integration clause that bars MeterLogic’s recovery for fraud.
13
According to the defendants, MeterLogic’s fraud claim must fail as a matter of law because the integration clause incorporates all representations made prior to this agreement.
14
MeterLogic correctly points out that such
4. Elements of Fraud
As their final argument to support their motion to dismiss MeterLogic’s fraud claim, CS and TS contend that MeterLogic has failed to plead the elements of fraud. In order for a plaintiff to satisfactorily allege a case for fraud, the plaintiff must plead: (1) a false statement or misrepresentation of material fact; (2) the representor’s knowledge at the time the misrepresentation is made that the statement is false; (3) an intention that the misrepresentation induce another to act; (4) action in justifiable reliance on the representation; and (5) resulting damage or injury.
See Bailey v. Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O’Neill, P.A.,
According to CS and TS, Meter-Logic has not alleged the fourth element— that it took any action in justifiable reli-anee on the defendants’ representations. MeterLogic has, in fact, alleged the requisite action. In its amended complaint, it states, “As a result of the intentional misrepresentations and/or omissions by CS, TS, KLT, KLT, Inc., and [KCPL], and each of them, MeterLogic agreed to go forward with the Agreements and did not seek out other business partners with whom to conduct this business.” PI. Am. Compl. at ¶42. Because this allegation shows that MeterLogic has done something in reliance on the defendants’ representations and because MeterLogic has otherwise pled the remaining elements of fraud, CS’s and TS’s motion to dismiss MeterLogic’s fraud count is denied.
C. Negligent Misrepresentation
In addition to the grounds discussed above, CS and TS contend that the court should dismiss MeterLogic’s negligent misrepresentation count, Count II, because it has failed to plead all the elements of such a claim. In order to state a claim for negligent misrepresentation, a plaintiff must allege the following: (1) a misrepresentation of material fact; (2) that the representor either knew or should have known was false or made without knowledge of truth or falsity; (3) the representor intended to induce another to act on the misrepresentation; and (4) resulting injury to a party acting in justifiable reliance on the misrepresentation.
See Souran v. Travelers Ins. Co.,
As with the fraud count, CS and TS argue that MeterLogic has not stated a claim for negligent misrepresentation because it has not alleged it took any action in reliance on their statements.
15
A plaintiff is not required to describe the action it took with a high degree of specificity. It
Finally, CS and TS argue that Meter-Logic has failed to satisfactorily plead the element of action because its allegation that it refrained from seeking other business opportunities does not constitute a detrimental change of position. According to the defendants, because MeterLogic was already contractually obligated to represent CS and TS exclusively, it could not have suffered any damages when it refrained from entering into other business ventures. While the defendants’ argument may be legally valid,
see Eclipse Medical, Inc. v. American Hydro-Surgical Instruments, Inc.,
No. 96-8532,
D. Promissory Estoppel
CS and TS seek to dismiss Count III (promissory estoppel) for all of the reasons stated above, but the court has found that none of those arguments warrant dismissal. As a final argument in support of their motion to dismiss the promissory estoppel count, CS and TS contend that Florida does not allow an action for promissory estoppel where the alleged agreement would be invalid under the statute of frauds.
See Tanenbaum v. Biscayne Osteopathic Hosp., Inc.,
E. Indemnity
Count TV of MeterLogic’s complaint is a claim for indemnity against CS
The facts of this case as pled do not satisfy these descriptions. In order for CS and TS to be liable to MeterLogic under an indemnity theory, MeterLogic would need to allege that CS’s and TS’s liability is only vicarious, constructive, derivative, or technical and based upon an actual wrongdoing or breach of contract by MeterLogic.
See Olnick v. Robert Myers Painting, Inc.,
It is therefore
ORDERED AND ADJUDGED THAT:
1) Defendant KCPL’s motion to dismiss for lack of personal jurisdiction (DE # 70) is GRANTED.
2) Defendant KLT’s motion to dismiss for lack of personal jurisdiction (DE # 9) is GRANTED.
3) Defendant KLT, Inc.’s motion to dismiss for lack of personal jurisdiction (DE# 67) is GRANTED.
4) Defendants CS’s and TS’s motion to dismiss Counts I, II, III, and V of the plaintiffs complaint (DE # 8) is DENIED.
5) Defendants CS’s and TS’s motion to dismiss Count IV of the plaintiffs complaint (DE #8) is GRANTED.
6) Count VI is dismissed for lack of personal jurisdiction over defendants KCPL, KLT, and KLT, Inc.
7) Counts I, II, III, and V remain pending against defendants CS and TS.
Notes
. The following facts are derived from the plaintiff's amended complaint. Additionally, the court relies on affidavits and correspondence submitted by MeterLogic, KCPL, KLT, and KLT in its discussion of the defendants’ motion to dismiss based on lack of personal jurisdiction.
. Although this test is comprised of two parts, this order discusses only the first prong-whether jurisdiction exists under Florida's long arm statute. Because the court finds MeterLogic has failed to satisfy the first requirement, it declines to discuss the constitutional prong.
. In support of its motion to dismiss based upon lack of personal jurisdiction, KCPL filed two affidavits from Jeanie Latz (senior vice-president of corporate services at KCPL) and one affidavit from Joseph G. Jacobs (a KCPL employee who began splitting his time between KCPL and CS after MeterLogic entered into its agreement with CS and TS). KLT filed the affidavit of Ronald Wasson (president of KLT) in support of its motion, and KLT, Inc. filed the affidavit of Gregory Orman (president of KLT, Inc.). In response to each of the defendants’ motions and affidavits, Me-terLogic has filed the affidavit of Mary Ellen Marshall (president of MeterLogic), copies of various e-mails, and a letter from Jacobs to Marshall.
. The corporate parents do not deny that Hawley or Dobell claimed to have been acting on their behalf, but they do deny that they had the authority to do so. MeterLogic never refutes this denial. Instead, it continues to rely on its allegation that Hawley and Dobell said, they were authorized to act on behalf of the corporate parents. Interestingly, Dobell's representations are the source of a civil suit that has been filed by KLT against Dobell in a Missouri state court.
. Dobell and Hawley are the only individuals that traveled to Florida to negotiate on behalf of CS and TS. MeterLogic claims that it had telephone conversations with Joseph Jacobs (officer of KCPL and temporary manager of CS) and Mark English (officer of TS, KLT, and KLT, Inc.), both of whom were in Missouri.
See
Latz Affidavit ¶ 34. According to MeterLogic, these conversations, in addition to the representations made by Hawley and Dobell, led it to believe that KCPL, KLT, and KLT, Inc. were standing behind the agreements with CS and TS. Viewing this in the light most favorable to MeterLogic means that Marshall, as a representative of MeterLogic, had some long distance telephone conversations with officers of the parent corporations. It is important to note, however, that these conversations occurred after the alleged tor-tious conduct had occurred and after Meter-Logic had entered into a contract with CS and TS.
See
PI. Amend. Compl. at ¶ 35. Additionally, long distance telephone calls are not sufficient to confer personal jurisdiction under Florida’s long arm statute.
See Musiker v. Projectavision, Inc.,
. The only evidence MeterLogic submits in support of its argument that the corporate parents authorized Dobell and Hawley to act on their behalf is a statement by Mark English, an officer and director of KLT and KLT, Inc. On July 23, 1999 English told Marshall, the president of MeterLogic, "... the [KLT] representative .. will not assert that the contract is void because of the purported lack of authority of Colin Dobell to enter into the contract.” Marshall Affidavit, ¶ 37. This statement does not support MeterLogic's argument because MeterLogic did not become aware of it until after the alleged tortious conduct occurred and the parties had entered into all of their agreements.
. MeterLogic claims that a letter written by Joseph Jacobs on KCPL letterhead while he was managing CS shows that KCPL authorized CS to act as its agent. As discussed above, KCPL has stated, and MeterLogic has failed to refute, that Jacob's employment by CS was independent of his work at KCPL and occurred after the conduct in question.
See
Jacobs Affidavit at ¶¶ 1, 2. Additionally, Florida courts have held that logos or trademark symbols alone do not create an apparent agency.
See Mobil Oil Corp. v. Bransford,
. Because MeterLogic has not established the mere instrumentality requirement, the court does not discuss the second element (improper conduct) in its order.
. MeterLogic has also filed this claim, along with claims for negligent misrepresentation and promissory estoppel, against KCPL, KLT, and KLT, Inc., but, as discussed in the preceding section, the court lacks personal jurisdiction over those defendants.
. CS and TS also argue that Rule 9(b) bars MeterLogic's negligent misrepresentation and promissory estoppel claims. The following analysis applies to those claims as well.
. CS and TS also argue that the economic loss rule bars MeterLogic’s negligent misrepresentation and promissory estoppel claims. The following analysis applies to those claims as well.
. Because the court's jurisdiction is based on diversity of citizenship, Florida substantive law governs MeterLogic’s tort claims.
See Sierminski v. Transouth Fin. Corp.,
. CS and TS also argue that the integration clause bars MeterLogic’s negligent misrepresentation and promissory estoppel claims. The following analysis applies to those claims as well.
. The integration clause states, "It is expressly agreed that this document embodies the entire agreement of the parties, and that no other understanding or agreement, verbal or otherwise, exists between the parties, except as herein expressly set forth....” PI. Amend. Compl., Ex. A. at ¶ 14.
. CS and TS also seek to dismiss Count III for promissory estoppel on the grounds that MeterLogic has not alleged it took any action in reliance on the defendants' alleged promises. Like the defendants’ arguments pertaining to the fraud and negligent misrepresentation counts, this argument fails for the reasons discussed herein.
. The defendants argue that MeterLogic has not incorporated all of the paragraphs of its fraud count into its negligent misrepresentation count because that count incorporates only paragraphs 1 through 31, of a 42 paragraph count. This is a typographical error by MeterLogic because its negligent misrepresentation count, which immediately follows its fraud count, begins with paragraph 32. MeterLogic apparently has misnumbered its paragraphs, but it is clear from the rest of its complaint that each paragraph of the complaint was meant to be incorporated into the following count.
