Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00385/USCOURTS-azd-2_09-cv-00385-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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Plaintiff has requested oral argument. That request is denied because the parties have

thoroughly discussed the law and the evidence, and oral argument will not aid the Court’s

decision. See Lake at Las Vegas Investors Group, Inc. v. Pac. Malibu Dev., 933 F.2d 724,

729 (9th Cir. 1991).

WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

N’GENUITY ENTERPRISES CO., an

Arizona corporation, 

Plaintiff, 

vs.

PIERRE FOODS, INC., a foreign

corporation; TIMOTHY DENNING;

NORB WOODHAMS, SR.; NORB

WOODHAMS, JR., 

Defendants. 

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No. 09-CV-00385-PHX-GMS

ORDER

Pending before the Court is Defendants’ Motion to Dismiss. (Dkt. # 18.) For the

following reasons, the Court grants the motion in part and denies the motion in part.1

BACKGROUND

This case is brought by Plaintiff N’Genuity Enterprises Company, an Arizona

corporation, which is a manufacturer and wholesaler of food products. N’Genuity sells these

products to a number of “prime vendors,” who then market the products for sale to

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consumers. Some of these prime vendors market the products for sale at American military

facilities. To satisfy the orders of these prime vendors, N’Genuity partners with other

manufacturers. One such manufacturing partner was Zartic, Inc., which contracted with

N’Genuity in 2003 to produce and supply N’Genuity’s chicken wing products. These

chicken wing products were eventually sold to prime vendors to be marketed at military

facilities.

In 2007, N’Genuity was contacted by Defendant Pierre Foods, Inc. Headquartered

in Ohio, Pierre Foods is also a manufacturer and wholesaler of food products. Pierre Foods

employs Defendants Timothy Denning, Norb Woodhams Sr., and Norb Woodhams Jr. (“the

Individual Defendants”), all of whom are residents of Indiana or Ohio. When it approached

N’Genuity, Pierre Foods allegedly represented that it was the successor-in-interest to Zartic,

which N’Genuity took to mean that, while ownership of Zartic may have changed hands,

there were no changes in operational personnel, manufacturing facilities, and other

production procedures. N’Genuity now alleges that this was a misrepresentation, and that

Pierre Foods simply purchased some of Zartic’s assets in order to capitalize on its name.

Apparently unsatisfied with Pierre Foods’ operations through the first half of 2007,

N’Genuity began to suggest that it would discontinue the relationship. At that point,

Denning allegedly “began making statements to the effect that Pierre Foods would go around

N’Genuity and market and sell chicken wing products directly to the military.” (Dkt. # 1 at

5.) To address those statements, N’Genuity and Pierre Foods arranged a conference call on

May 25, 2007. In that call, Woodhams Sr. “personally assured N’Genuity that Pierre Foods

would never go around N’Genuity and sell N’Genuity products directly to the military or any

other customers of N’Genuity.” (Id. at 6.) Woodhams Sr. is alleged to have made a

subsequent call to N’Genuity in which he reiterated that Pierre Foods would not circumvent

N’Genuity, acknowledged that doing so would violate Pierre Foods’ agreements with

N’Genuity, and stated that he was “embarrassed” that Pierre Foods had not been “following

through on their commitments and obligations.” (Id.) These assurances satisfied N’Genuity

enough for it to continue the relationship with Pierre Foods.

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In November of 2007, N’Genuity and Pierre Foods began to negotiate a new contract.

Woodhams Jr. was part of Pierre Foods’ negotiating team, and on a conference call to

N’Genuity he “confirmed that Pierre Foods would provide a quality-assurance and customerservice representative dedicated to representing N’Genuity’s interest,” with N’Genuity

writing the job description for this position. (Id. at 7.) N’Genuity did so, and Woodhams Jr.

confirmed that Pierre Foods would provide a representative according to its criteria.

Negotiations for a new contract continued through much of 2008. N’Genuity

contends that Pierre Foods did not act in good faith during these negotiations, altering draft

agreements and, through Woodhams Jr. and others, demanding that N’Genuity sign the

agreements. According to N’Genuity, the negotiations were merely a ruse to provide cover

for Pierre Foods to circumvent N’Genuity and market products directly to the military.

Eventually, Pierre Foods agreed to sign an indemnification agreement covering all

unresolved issues and questions regarding the draft agreement. It also promised to remedy

N’Genuity’s complaints about how its business was run. 

Given these assurances, on August 27, 2008, N’Genuity signed an agreement (“the

Supplier Agreement”) providing for Pierre Foods’ continuing manufacture of the chicken

wing products. On the same date, the parties allegedly executed a Confidentiality and

Nondisclosure Agreement. Around this time, N’Genuity also committed to placing orders

for all of Pierre Foods’ existing inventory of the chicken wing products.

However, Pierre Foods allegedly failed to execute the indemnity agreement, failed to

provide a quality assurance and customer service representative according to N’Genuity’s

criteria, and failed to remedy the many complaints about its operations that N’Genuity has

made since 2007, including its failure to implement an effective inventory control system.

Pierre Foods is also alleged to have improperly maintained an oversupply of the chicken

wing products. Just before the Supplier Agreement was entered into, Woodhams Jr.

informed N’Genuity that Pierre Foods maintained roughly 34,000 cases of chicken wing

products, and in response N’Genuity said that it should maintain only 10,000 cases (because

overstocked inventory loses shelf life). The Supplier Agreement memorialized that

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N’Genuity was to inform Pierre Foods of the amount of inventory to maintain, and

N’Genuity officially set this level at 10,000 cases of chicken wing products. Nevertheless,

Pierre Foods allegedly continued to maintain substantially excessive inventory.

On November 11, 2008, N’Genuity emailed Pierre Foods (including Woodhams Jr.)

about its alleged breaches, and Pierre Foods responded by suggesting that the two companies

discontinue their relationship pending an agreement on how to dispose of the remaining

inventory. N’Genuity agreed to work with Pierre Foods to sell the inventory, permitting it

to process an order from Agility, one of the prime vendors. Within a few days of the

shipment, Agility complained to N’Genuity about the quality of the chicken wing products

it had received. N’Genuity then investigated the shipments made by Pierre Foods since

entering the Supplier Agreement and allegedly discovered numerous violations, such as

improper shipping practices and the shipment of “shelf-life deficient” product (product that

has less than eighty-five percent of its shelf-life remaining). N’Genuity also discovered that

Pierre Foods had lied about when its oldest inventory had been manufactured.

Based on its investigation, N’Genuity stopped placing orders with Pierre Foods. It

attempted to contact Pierre Foods, including by attempting to contact Woodhams Jr., but

N’Genuity’s calls and records requests were ignored. N’Genuity asserts that in February of

2009 Pierre Foods began shipping its remaining inventory, all of which was shelf-life

deficient, to the prime vendors. N’Genuity contends that these sales were unauthorized and

damaged N’Genuity’s business relationships.

N’Genuity also alleges that Pierre Foods, and specifically Defendant Denning, made

defamatory statements about N’Genuity to undermine its business relationships and

ultimately to permit Pierre Foods to market N’Genuity’s products directly to the prime

vendors. Specifically, Pierre Foods and Denning are alleged to have told various prime

vendors, as well as the Army Center of Excellence, Subsistence (“ACES”) (which approves

products sold to military installations) that N’Genuity wrongfully refused to place orders

with Pierre Foods. N’Genuity also alleges that Pierre Foods breached the Nondisclosure and

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Confidentiality Agreement by permitting Denning to obtain information about the

relationship between N’Genuity and Pierre Foods.

On February 25, 2009, N’Genuity filed the Complaint underlying this lawsuit.

N’Genuity advances twelve claims:

(1) breach of contract;

(2) breach of the duty of good faith and fair dealing;

(3) fraudulent misrepresentation;

(4) fraudulent concealment and nondisclosure;

(5) fraudulent inducement;

(6) interference with existing contractual relationships;

(7) interference with prospective business relationships;

(8) unfair competition;

(9) defamation, libel, and slander;

(10) trade libel and slander;

(11) misappropriation of trade secrets and proprietary

information; and

(12) a request for a declaratory judgment that N’Genuity

performed all of its obligations under its contracts, that it did not

breach or violate any obligations or duties to Pierre Foods, and

that Pierre Foods is not entitled to sell any N’Genuity product.

The claims are asserted against all Defendants, except for claim one, which is asserted

against Pierre Foods only. On April 10, 2009, Defendants filed the instant motion to dismiss.

(Dkt. # 18.)

DISCUSSION

I. The Individual Defendants

The Individual Defendants argue that they should be dismissed from this action

because: (A) the Court lacks personal jurisdiction over them, and (B) even according to the

Complaint, the Individual Defendants acted only on behalf of Pierre Foods and therefore

owed no duty or obligation to N’Genuity as individuals. The Court will address each

argument in turn.

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A. Personal Jurisdiction

Once a defendant challenges a federal court’s personal jurisdiction pursuant to Federal

Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of demonstrating that

personal jurisdiction exists. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800

(9th Cir. 2004). Where, as here, the defendant’s motion is based on written materials and not

on an evidentiary hearing, “the plaintiff need only make a prima facie showing of

jurisdictional facts” from the plaintiff’s pleadings and affidavits. Id. (quoting Caruth v. Int’l

Psychoanalytical Ass’n, 59 F.3d 126, 128 (9th Cir. 1995)). Uncontroverted allegations in the

complaint must be taken as true, and conflicts between the parties over statements contained

in affidavits must be resolved in the plaintiff’s favor. Id.

Where no federal statute governs the exercise of personal jurisdiction, a federal court

generally applies the “long-arm” statute of the state in which it sits. Omni Capital Int’l, Ltd.

v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104-05 (1987). In Arizona, the state in which this

Court sits, personal jurisdiction is available over a nonresident defendant “to the maximum

extent permitted by the Constitution [of Arizona] and the Constitution of the United States.”

Ariz. R. Civ. P. 4.2(a). These constitutions permit a court to exercise personal jurisdiction

if a defendant has “sufficient minimum contacts with the forum state such that the

maintenance of the suit does not offend traditional notions of fair play and substantial

justice.” Williams v. Lakeview Co., 199 Ariz. 1, 3, 13 P.3d 280, 282 (2000) (citing Int’l Shoe

Co. v. Washington, 326 U.S. 310, 320 (1945)).

Although personal jurisdiction may be “general” or “specific,” “the constitutional

touchstone remains whether the defendant purposefully established ‘minimum contacts’ in

the forum State.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).

Thus, general jurisdiction may be exercised if a nonresident defendant’s contacts with the

forum state are “substantial or continuous and systematic enough that the defendant may be

haled into court in the forum, even for claims unrelated to the defendant’s contacts with the

forum.” Id. (citing Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 414

(1984)). Specific jurisdiction, on the other hand, may be exercised if: “(1) the defendant

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purposely avails himself of the privilege of conducting business in the forum; (2) the claim

arises out of or relates to the defendant’s contact with the forum; and (3) the exercise of

jurisdiction is reasonable.” Id. The plaintiff bears the burden of establishing the first two of

these prongs; if he does so, then the burden shifts to the defendant to “present a compelling

case” that the exercise of jurisdiction is not reasonable. Schwarzenegger, 374 F.3d at 802.

A plaintiff can establish the first prong of the specific jurisdiction test by showing

either “purposeful availment” or “purposeful direction.” Id. “Purposeful availment” is most

often used in contract suits, and it typically requires “evidence of the defendant’s actions in

the forum, such as executing or performing a contract there.” Id. (citing Hanson v. Denckla,

357 U.S. 235, 253 (1958)). “Purposeful direction,” on the other hand, is most often used in

tort suits, and it usually requires “evidence of the defendant’s actions outside the forum state

that are directed at the forum, such as the distribution in the forum state of goods originating

elsewhere.” Id. at 803 (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774-75

(1984)). Specifically, “purposeful direction” is to be evaluated under a three-part “effects

test” that “requires that the defendant allegedly have (1) committed an intentional act, (2)

expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be

suffered in the forum state.” Id. (citing Calder v. Jones, 465 U.S. 783, 788-89 (1984)).

A plaintiff establishes the second prong of the specific jurisdiction test by showing

that the plaintiff would not have been injured “but for” the defendant’s forum-related

contacts. Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998). If a court

reaches the third prong, it must weigh seven factors:

(1) the extent of a defendant’s purposeful interjection; (2) the

burden on the defendant in defending in the forum; (3) the

extent of conflict with the sovereignty of the defendant’s state;

(4) the forum state’s interest in adjudicating the dispute; (5) the

most efficient judicial resolution of the controversy; (6) the

importance of the forum to the plaintiff’s interest in convenient

and effective relief; and (7) the existence of an alternative

forum.

Id. at 1323 (citing Burger King, 471 U.S. at 476-77). “No one factor is dispositive; a court

must balance all seven.” Id.

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Here, N’Genuity asserts that the Court has specific jurisdiction over the Individual

Defendants, and the Complaint describes no conduct by the Individual Defendants readily

susceptible to a purposeful availment analysis. Thus, the Court will determine whether any

of the Individual Defendants purposefully directed any of their actions at Arizona. The

uncontroverted allegations of the Complaint specific to each of the Individual Defendants are

as follows.

Denning is alleged to have engaged in two sets of acts. First, in 2007, Denning

“began making statements to the effect that Pierre Foods would go around N’Genuity and

market and sell chicken wing products directly to the military.” (Dkt. # 1 at 5.) Second,

Denning “made numerous false, defamatory, and slanderous statements about N’Genuity .

. . in an effort to undermine N’Genuity’s ongoing business relationships . . . and to

circumvent [Pierre Foods’] contractual obligations to N’Genuity.” (Id. at 22.) Specifically,

Denning is alleged to have stated that “N’Genuity wrongfully refused to place orders with

Pierre Foods.” (Id.)

Woodhams Sr. is alleged to have made two calls to N’Genuity in mid-2007. On a

May 25, 2007, conference call with N’Genuity, Woodhams Sr. “personally assured

N’Genuity that Pierre Foods would never go around N’Genuity and sell N’Genuity’s

products directly to the military or any other customers.” (Id. at 6.) Woodhams Sr. also

made another call to N’Genuity around that time, reiterating that Pierre Foods would not

circumvent N’Genuity, acknowledging that doing so would violate Pierre Foods’ agreements

with N’Genuity, and stating that he was “embarrassed” that Pierre Foods had not been

“following through on their commitments and obligations.” (Id.) 

Woodhams Jr.’s alleged acts all stem from the negotiations between N’Genuity and

Pierre Foods in 2007 and 2008. Specifically, Woodhams Jr. participated in a conference call

with N’Genuity in which he “confirmed that Pierre Foods would provide a quality assurance

and customer service representative dedicated to representing N’Genuity’s interests . . . and

committed that N’Genuity could write the job description and provide the specifications and

requirements for this representative.” (Id. at 7.) Woodhams Jr. also reviewed the job

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The Complaint’s other mentions of Woodhams Jr. do not appear to be tied to any

alleged wrongdoing and thus are not relevant. Those other mentions provide that Woodhams

Jr. allegedly participated in a conference call with N’Genuity on August 26, 2008, in which

he stated that Pierre Foods had roughly 34,000 cases of chicken wing products in inventory,

a statement that is not alleged to be false. (Dkt. # 1 at 12.) Also, Woodhams Jr. was included

on an email sent by N’Genuity on November 11, 2008, but it was another Pierre Foods

employee that responded to the email. (Id. at 14.) Additionally, Woodhams Jr. did not

respond to N’Genuity’s attempts to contact him in November 2008. (Id. at 17.)

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description written by N’Genuity, “agreed that this was an appropriate set of specifications

and requirements,” and “confirmed that Pierre Foods would provide a representative whose

job duties would cover all of the identified specifications and requirements.” (Id.)

Woodhams Jr. was also involved in a conference call with N’Genuity in August 2008 in

which he “threatened that if N’Genuity did not immediately sign the current version [of the

proposed Supplier Agreement], incorrect and incomplete as it was, Pierre Foods would refuse

to fill its existing orders with N’Genuity.” (Id. at 8.)2

The Individual Defendants do not dispute that N’Genuity has alleged that they

engaged in intentional acts expressly aimed at N’Genuity’s operations in Arizona. The

Individual Defendants argue only that their contacts with Arizona were as employees of

Pierre Foods, and thus that none of the conduct can be imputed to them as individuals. (Dkt.

# 18 at 3-4.) The Individual Defendants seem to be channeling the “fiduciary shield

doctrine,” under which “a person’s mere association with a corporation that causes injury in

the forum state is not sufficient in itself to permit that forum to assert jurisdiction over the

person.” Davis v. Metro Prod., 885 F.2d 515, 520 (9th Cir. 1989) (applying Arizona law).

The Individual Defendants are correct that employees’ contacts with a forum state

“are not to be judged according to their employer’s activities there,” and “[e]ach defendant’s

contacts with the forum State must be assessed individually.” Calder, 465 U.S. at 790.

However, “their status as employees does not somehow insulate them from jurisdiction.” Id.

Where defendants are “primary participants in an alleged wrongdoing intentionally directed

at a [forum state] resident, [] jurisdiction over them is proper.” Id. Thus, as long as the

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conduct causing an effect in the forum state is not “general untargeted negligence,” but rather

is “intentional, allegedly tortious actions by the defendants expressly aimed at the forum

state,” then the fiduciary shield doctrine will not divest the court of personal jurisdiction.

Davis, 885 F.2d at 520; Click v. Dorman Long Tech., Ltd., No. C06-1936, 2006 WL

2644889, at *4-5 (N.D. Cal. Sept. 14, 2006) (holding that “in order for fiduciary shield

protections to be unavailable to defendants acting on behalf of their employer,” plaintiffs

“must make a prima facie showing that some theory of liability allows for [the employee’s]

contacts, which were conducted on [the employer’s] behalf, to be imputed to [the employee]

in his personal capacity,” such as by alleging “intentionally targeted activity by [the

employee] toward a [forum-state] resident” or “that [the employee] expressly aimed his

conduct at a [forum-state] resident”).

Here, each of the Individual Defendants is alleged to have engaged in intentional

tortious conduct targeted at harming N’Genuity in Arizona. Denning’s alleged defamatory

statements about N’Genuity, for instance, clearly present an allegation of intentional tortious

conduct designed to harm N’Genuity. Woodhams Sr.’s calls to N’Genuity, promising that

Pierre Foods would not seek to market to N’Genuity’s prime vendors, were made in the

course of reassuring N’Genuity about Pierre Foods’ business after it purchased Zartic assets.

This fits under the rubric of N’Genuity’s allegations of fraudulent inducement “to continue

with its ongoing contractual relationship and business activities with Pierre Foods.” (Dkt.

# 1 at 27.) Likewise, the allegations that Woodhams Jr. promised that Pierre Foods would

provide a representative as N’Genuity requested, and that he threatened that Pierre Foods

would stop working with N’Genuity if it did not sign a contract in 2008, are part of

N’Genuity’s claim that Woodhams Jr. fraudulently induced N’Genuity to sign the Supplier

Agreement.

These are not allegations of mere negligence untargeted at N’Genuity, but rather are

allegations of intentional torts that had the purpose and effect of harming N’Genuity in

Arizona. Such allegations are sufficient to establish personal jurisdiction over the Individual

Defendants. See Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111-12 (9th Cir. 2002)

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(finding personal jurisdiction where two foreign employees were “alleged to have

communicated with Dole managers in California with the specific intent to cause injury to

Dole U.S. by means of those very communications” by attempting to “induce them to

implement a new importing system, and, as a consequence, to enter into significant and

detrimental contractual arrangements”); compare Davis, 885 F.2d at 522-53 (finding that an

Arizona district court had personal jurisdiction over officers of a California company that

communicated with an Arizona resident to discuss investment in the company because the

officers acted with tortious intent to fraudulently induce the Arizona resident to find

investors), with Click, 2006 WL 2644889, at *3-5 (finding that a foreign employee’s

communications with the California plaintiff’s employer were insufficient to create personal

jurisdiction in California because the allegations of tortious conduct were of mere negligence

not specifically targeted at the defendants).

There does not appear to be significant disagreement that, if the Individual Defendants

did “purposefully direct” their intentionally tortious conduct at N’Genuity, knowing that the

harm would be felt in Arizona, then the claims against the Individual Defendants would arise

out of or relate to each Defendant’s contacts with the forum. (See Dkt. # 18 at 4.) The Court

agrees that N’Genuity would not have suffered the alleged harm “but for” the Individual

Defendants’ contacts, Panavision, 141 F.3d at 1322, and thus the second prong of the

specific jurisdiction test is met, see Dole, 303 F.3d at 1114 (“It is obvious that Dole’s claims

against Watts and Boenneken arise directly out of their contacts with the forum. As

recounted above, the contacts between Watts and Boenneken and the forum state are integral

and essential parts of the alleged fraudulent scheme on which Dole bases its suit.”).

Likewise, the Individual Defendants do not seriously dispute that the exercise of

jurisdiction is reasonable, other than to argue that it is unreasonable in the absence of

“purposeful direction.” (See Dkt. # 18 at 4.) Nor does the Court, on its own review, “divine

any substantial concern” for any of the reasonableness considerations. Davis, 885 F.2d at

523. Thus, the Individual Defendants have not rebutted the presumption that the exercise of

personal jurisdiction over them is reasonable. See id. (finding the exercise of personal

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Defendants also argue that this issue may be decided by the bankruptcy court (Dkt.

# 18 at 7), but the parties agree that both courts have jurisdiction. In the interests of judicial

economy, and because the matter does not require the particular expertise of the bankruptcy

court, this Court will decide the issue.

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jurisdiction reasonable in the absence of specific argument on the point and in the absence

of apparent offense to any of the seven factors).

Because N’Genuity has made a sufficient prima facie showing of specific jurisdiction,

and because the Individual Defendants have failed to rebut the presumption that jurisdiction

is reasonable, the Court has personal jurisdiction over the Individual Defendants.

B. Duty to Plaintiff

Similar to their argument under the personal jurisdiction test, the Individual

Defendants argue that they should be dismissed from this action because “[e]ach of the

allegations [against them] expressly recognizes that the statements [they made] were being

made on behalf of Pierre [Foods].” (Dkt. # 18 at 4-5.) However, the Complaint asserts that

Denning, Woodhams Sr., and Woodhams Jr. were individually liable for the asserted

intentional torts, not that they were liable simply as corporate employees. As explained

above, the fiduciary shield doctrine does not insulate the Individual Defendants from liability

if these allegations are true. See Davis, 885 F.2d at 521-22. Thus, the Individual Defendants

will not be dismissed.

II. Pierre Foods

Defendants’ next argument is that N’Genuity’s claims against Pierre Foods are barred

by its bankruptcy reorganization and discharge.3

 (Dkt. # 18 at 5-7.) “[T]he confirmation of

a [bankruptcy] plan discharges the debtor from any debt that arose before the date of such

confirmation.” 11 U.S.C. § 1141(d)(1)(A). “Debt” includes “liability on a claim.” 11

U.S.C. § 101(12). Thus, the question of whether N’Genuity’s claims against Pierre Foods

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The Court may take judicial notice of the bankruptcy proceedings. See In re

McGhan, 288 F.3d 1172, 1180 (9th Cir. 2002).

5

N’Genuity does not challenge the notion that the Ninth Circuit test is satisfied, but

upon its own review the Court agrees that it is. There is no doubt that N’Genuity could have

fairly and reasonably contemplated its fraud claims against Pierre Foods before December

12, 2008, for N’Genuity alleges that it stopped ordering from Pierre Foods in November of

2008 based on the very fraudulent activity for which it now claims relief. Of course, to the

extent that any of the fraud claims rest on fraudulent events occurring after December 12,

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were discharged depends on whether those claims arose before December 12, 2008, the date

on which Pierre Foods’ bankruptcy plan was confirmed. (Dkt. # 18 Ex. E.)4

“[A] claim arises, for purposes of discharge in bankruptcy, at the time of the events

giving rise to the claim, not at the time [the] plaintiff is first able to file suit on the claim.”

O’Loghlin v. County of Orange, 229 F.3d 871, 874 (9th Cir. 2000). Even where postconfirmation events giving rise to a claim are part of the same course of conduct as preconfirmation events, the continuing nature of any legal violation does not result in the

discharge of claims based on events occurring after the confirmation date. Id. at 874-75.

Therefore, any claims against Pierre Foods based on events occurring prior to December 12,

2008, have been discharged, while claims based on events after that date, even if those events

were part of a continuing course of conduct that spanned the confirmation date, are not

discharged.

N’Genuity musters several arguments as to why the Court should not adopt December

12, 2008, as the date of discharge. However, these arguments are not persuasive. N’Genuity

first argues that its fraud claims did not accrue for the purposes of bankruptcy discharge until

the claims accrued as a matter of state law. (Dkt. # 35 at 7-8.) While that may be the case

for courts in the Third Circuit, see Jones v. Chemetron Corp., 212 F.3d 199, 206 (3d Cir.

2000), in the Ninth Circuit “a claim arises when a claimant can fairly or reasonably

contemplate the claim’s existence even if a cause of action has not yet accrued under

nonbankruptcy law,” In re SNTL Corp., 571 F.3d 826, 839 (9th Cir. 2009). Thus,

N’Genuity’s arguments about Arizona state law are inapposite.5

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2008, claims for such fraudulent activity were not discharged by the earlier confirmation

order.

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N’Genuity next argues that the bankruptcy plan itself provides that “liability arising

under or from post-petition contracts, such as the Supplier Agreement here, was expressly

not discharged.” (Dkt. # 35 at 8.) N’Genuity bases that argument on the “Contracts and

Leases Entered Into After the Commencement Date” section of the reorganization plan,

which provides:

Contracts and leases entered into after the Commencement Date

by any Debtor, including any Executory Contracts and

Unexpired Leases assumed by such Debtor, will be performed

by the Debtor or Reorganized Debtor liable thereunder in the

ordinary course of business. Accordingly, such contracts and

leases (including any assumed Executory Contracts and

Unexpired Leases) will survive and remain unaffected by entry

of the Confirmation Order.

(Dkt. # 18 Ex. D at 98.) N’Genuity’s reading of this section is untenable. This section

provides only that contracts entered into by Pierre Foods after the commencement of

bankruptcy proceedings are not terminated or otherwise affected by entry of the confirmation

order. This section does not suggest, much less does it “expressly” state, that liability for

civil claims that arise after the confirmation date is not discharged. Rather, under the

bankruptcy statutes “the confirmation of a [bankruptcy] plan discharges the debtor from any

debt that arose before the date of such confirmation.” 11 U.S.C. § 1141(d)(1)(A) (emphasis

added). The reorganization plan does not alter that statutory principle.

N’Genuity’s last argument is that the bankruptcy claims were not discharged because

“N’Genuity was not given sufficient statutory notice.” (Dkt. # 35 at 8.) Specifically,

N’Genuity argues that Pierre Foods sent the Notice of Confirmation Hearing and related

documents to N’Genuity’s old address – although, conspicuously, N’Genuity does not argue

that it did not receive the information. (See id. at 8-9.) Defendants respond with several

arguments, but the Court need not reach them all. Defendants have introduced ample

evidence from the bankruptcy records that N’Genuity maintained several addresses, that the

relevant notices were mailed to all of those addresses, and that, for each and every mailing,

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6

N’Genuity also seems to make an equitable argument, extolling the Court to ignore

the discharge statutes because enforcing them would “allow Pierre Foods to exploit the

bankruptcy code,” and “[t]his Court should not sanction such deliberate conduct.” (Dkt. #

35 at 8.) The Court, however, is not at liberty to ignore the bankruptcy statutes, and it will

not fail to enforce the discharge entered by the bankruptcy court.

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at least one of the notices was not returned as undeliverable. (Dkt. # 42 Ex. A-M.) Mail

directed to an old address is generally presumed to have been forwarded to a new address if

it is not returned as undeliverable. See In re R.H. Macy & Co., Inc., 161 B.R. 355, 359-60

(S.D.N.Y. 1993) (rejecting the argument that a party did not receive a bankruptcy notice

because the proof of claim package “was not returned as undeliverable” and thus was

“presumed to have been forwarded to [the party’s] new address”). Here, N’Genuity has

offered nothing to rebut the presumption of receipt or even to dispute that it was fully aware

of the bankruptcy proceedings. Thus, N’Genuity cannot avoid the discharge date of

December 12, 2008.6

However, this holding does not require complete dismissal of Pierre Foods from this

action. While Defendants identify a number of events in the Complaint that occurred prior

to December 12, 2008 (Dkt. # 18 at 6-7), N’Genuity points out that there are other events

alleged in the Complaint occurring after December 12, 2008, that could support at least some

of N’Genuity’s claims (Dkt. # 35 at 7). Specifically, N’Genuity alleges that Pierre Foods

solicited N’Genuity’s customers and began selling chicken wing products to them after

December 12, 2008, without regard to the agreements between N’Genuity and Pierre Foods

and the agreements between N’Genuity, prime vendors, and others. As part of doing so,

N’Genuity alleges, Pierre Foods acted fraudulently and made false and defamatory

statements about N’Genuity to prime vendors and others in order to undermine and co-opt

N’Genuity’s business relationships. To the extent that, after the confirmation date, Pierre

Foods improperly solicited or sold products to vendors, acted fraudulently, or made false and

defamatory statements about N’Genuity, claims based on those events remain viable. To the

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7

The parties do not make specific arguments about the factual theories underlying each

claim, and the scope of the Court’s ruling will not exceed the scope of the parties’ arguments.

Thus, the Court can do no more at this time than hold that N’Genuity’s claims against Pierre

Foods are dismissed to the extent that they are based on events occurring prior to the

confirmation date.

8

In an apparent attempt to keep their options open as to what the controlling law is,

the parties cite sporadically to both Ohio and Arizona law throughout this section. For

purposes of this motion, the state law necessary to resolve the parties’ arguments is either not

relevant, not disputed, or substantially the same in both Arizona and Ohio. However, the

Court is not inclined to continue to conduct parallel analyses under both Arizona and Ohio

law. Thus, any future motions should actually take a position on what law applies and cite

only to that law.

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extent that any of N’Genuity’s claims are based on events occurring before December 12,

2008, these claims have been discharged and are therefore dismissed.7

However, it is appropriate at this point to dismiss N’Genuity’s fraudulent inducement

claim against Pierre Foods in its entirety. N’Genuity’s Complaint states that Defendants

“fraudulently induced N’Genuity to enter into the N’Genuity Supplier Agreement and the

Confidentiality and Non Disclosure Agreement and to continue with its ongoing contractual

relationship and business activities with Pierre Foods.” (Dkt. # 1 at 27.) By definition, any

events that could have caused N’Genuity to maintain the contractual relationship with Pierre

Foods after it acquired Zartic, and later to sign the Supplier Agreement on August 27, 2008,

must have occurred prior to December 12, 2008, as N’Genuity itself alleges that it stopped

placing orders with Pierre Foods by November 25, 2008. Thus, no inducement could have

occurred after that date, and N’Genuity’s claim against Pierre Foods for fraudulent

inducement must be dismissed.

III. Specific Claims8

Defendants advance a host of specific challenges to N’Genuity’s claims, many of

which challenge the sufficiency of the factual allegations provided in the Complaint. As a

general matter, Federal Rule of Civil Procedure 8(a)(2) requires a plaintiff to set forth a

“short and plain statement of the claim showing that the [plaintiff] is entitled to relief,” in

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order to “give the defendant fair notice of what the claim is and the grounds upon which it

rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355

U.S. 41, 47 (1957)).

To survive a dismissal for failure to state a claim, a complaint must contain more than

a “formulaic recitation of the elements of a cause of action”; it must contain factual

allegations sufficient to “raise the right of relief above the speculative level.” Id. “The

pleading must contain something more . . . than . . . a statement of facts that merely creates

a suspicion [of] a legally cognizable right of action.” Id. (quoting 5 Charles Alan Wright &

Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004)). While “a

complaint need not contain detailed factual allegations . . . it must plead ‘enough facts to state

a claim to relief that is plausible on its face.’” Clemens v. DaimlerChrysler Corp., 534 F.3d

1017, 1022 (9th Cir. 2008) (quoting Twombly, 550 U.S. at 570). “A claim has facial

plausibility when the plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556). The plausibility

standard “asks for more than a sheer possibility that a defendant has acted unlawfully.

Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it

‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id.

(quoting Twombly, 550 U.S. at 555) (internal citations omitted).

When analyzing a complaint for failure to state a claim, “[a]ll allegations of material

fact are taken as true and construed in the light most favorable to the non-moving party.”

Smith v. Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996). In addition, the Court must assume

that all general allegations “embrace whatever specific facts might be necessary to support

them.” Peloza v. Capistrano Unified Sch. Dist., 37 F.3d 517, 521 (9th Cir. 1994). Although

“a complaint need not contain detailed factual allegations,” Clemens, 534 F.3d at 1022, the

Court will not assume that the plaintiff can prove facts different from those alleged in the

complaint, see Associated Gen. Contractors of Cal. v. Cal. State Council of Carpenters, 459

U.S. 519, 526 (1983); Jack Russell Terrier Network of N. Cal. v. Am. Kennel Club, Inc., 407

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F.3d 1027, 1035 (9th Cir. 2005). Similarly, legal conclusions couched as factual allegations

are not given a presumption of truthfulness, and “conclusory allegations of law and

unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. FDIC,

139 F.3d 696, 699 (9th Cir. 1998).

A. Claim One

Defendants argue that Claim One (breach of contract) must be dismissed because

N’Genuity has failed to sufficiently allege damages. (Dkt. # 18 at 8-9.) However, the

Complaint alleges damages in the form of lost profits on sales it has made and will make, the

loss of other sales in their entirety, and the disgorgement of profits Pierre Foods has

improperly garnered. (Dkt. # 1 at 32.) N’Genuity also alleges that its business reputation

has been damaged, that it has suffered consequential damages, and that it is entitled to

prejudgment interest on liquidated damages. (Id. at 33.) N’Genuity has made extensive

factual allegations regarding the business relationship between N’Genuity and Pierre Foods,

the asserted obligations between the companies, and how it believes those obligations were

violated. These allegations are sufficient to render the notion that N’Genuity has been

damaged plausible, and it need do no more to survive a motion to dismiss. See Forte Capital

Partners v. Harris Cramer, No. C07-01237, 2007 WL 1430052, at *7-8 (N.D. Cal. May 14,

2007) (finding a general averment of damages sufficient to survive a motion to dismiss

because the simplified pleading standard of Rule 8 applies to the pleading of damages and

because “ultimately [the plaintiff’s] damages is a question of fact subject to proof, and is

inappropriate to support [the] motion to dismiss”). Thus, Claim One is not deficient in this

respect.

Defendants also argue that N’Genuity has not sufficiently alleged a breach because

any oral promises it made cannot form the basis of a claim for breach. (Dkt. # 18 at 9-10.)

However, it is not clear from the Complaint that the breach of contract claim is premised on

unwritten promises. Rather, the Complaint refers to breaches of the Supplier Agreement and

the Confidentiality and Nondisclosure Agreement, both of which are alleged to be written

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9

To the extent that the breach of contract claims are predicated on oral agreements,

the parties’ arguments about those agreements are too fact-intensive to be disposed of on a

motion to dismiss. For instance, Defendants’ argument that evidence of oral agreements is

prohibited by the parol evidence rule requires the Court to determine whether the Supplier

Agreement is “fully integrated,” which in turn requires the consideration of extrinsic

evidence. See Anderson v. Preferred Stock Food Mkts., Inc., 175 Ariz. 208, 211, 854 P.2d

1194, 1197 (Ct. App. 1993); Nat’l City Bank v. Donaldson, 642 N.E.2d 58, 61 (Ohio Ct.

App. 1994). On a motion to dismiss, however, the Court looks to the pleadings on file, not

to extrinsic evidence, unless it converts the motion to dismiss into a motion for summary

judgment and provides the opportunity for discovery. See Inlandboatmens Union Pac. v.

Dutra Group, 279 F.3d 1075, 1083 (9th Cir. 2002). The Court will therefore defer ruling on

the propriety of this particular theory of breach until there is a sufficient factual record to

permit doing so and it is challenged on a motion for summary judgment.

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documents (see Dkt. # 1 at 9) to which Defendants’ arguments are inapplicable. Thus, Claim

One need not be dismissed.9

B. Claim Two

Defendants argue that Claim Two (breach of the duty of good faith and fair dealing)

fails because such a claim cannot be premised on actions preceding any contractual

agreement. (Dkt. # 18 at 11.) N’Genuity defends this claim only by arguing that its

allegations rest on Defendants’ conduct after entering the agreements, and not on pre-contract

actions. (Dkt. # 35 at 16-17.) By conceding that its claims rest solely on post-contract

activity, and by failing to defend the claim’s viability if predicated upon pre-contract activity,

N’Genuity has abandoned the challenged aspect of this claim. See Jenkins v. County of

Riverside, 398 F.3d 1093, 1095 n.4 (9th Cir. 2005); Foster v. City of Fresno, 392 F. Supp.

2d 1140, 1147 n.7 (E.D. Cal. 2005) (citing Abogados v. AT&T, Inc., 223 F.3d 932, 937 (9th

Cir. 2000); Doe v. Benicia Unified Sch. Dist., 206 F. Supp. 2d 1048, 1050 n.1 (E.D. Cal.

2002)). Claim Two is therefore dismissed to the extent that it is predicated on pre-contract

actions, but it remains viable as to any post-contract actions.

C. Claims Three, Four, and Five

Defendants argue that N’Genuity’s fraud claims (Claims Three, Four, and Five) are

not pled with the requisite degree of particularity. (Dkt. # 18 at 11-12.) If a complaint

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includes allegations of fraud, Federal Rule of Civil Procedure 9(b) requires the “party [to]

state with particularity the circumstances constituting fraud.” This requires that the party

alleging fraud include an account of the “time, place, and specific content of the false

representations as well as the identities of the parties to the misrepresentation.” Edwards v.

Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004). “Rule 9(b) does not allow a

complaint to merely lump multiple defendants together but require[s] plaintiffs to

differentiate their allegations when suing more than one defendant and inform each defendant

separately of the allegations surrounding his alleged participation in the fraud.” Swartz v.

KPMG LLP, 476 F.3d 756, 764-65 (9th Cir. 2007) (citation and ellipsis omitted). “To

comply with Rule 9(b), allegations of fraud must be specific enough to give defendants

notice of the particular misconduct which is alleged to constitute the fraud charged so that

they can defend against the charge and not just deny that they have done anything wrong.”

Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (internal quotations omitted).

Here, all of the allegations of fraudulent conduct are directed against “Defendants”

generally and are not differentiated such that each Defendant is apprised of the specific

misconduct with which he has been charged. (See Dkt. # 1 at 25-27.) This fails the Rule

9(b) test. See Swartz, 476 F.3d at 764-65. The fraud claims likewise do not sufficiently

plead the “time, place, and specific content of the false representations.” Edwards, 356 F.3d

at 1066. While some dates are provided for certain events that might be construed as

fraudulent (such as dates of some conference calls), most of the Complaint simply describes

a general course of conduct that could cover any number of fraudulent activities, and the

fraud claims themselves provide no specific discussion about what the actual fraud is that

N’Genuity is alleging. Rather, the fraud sections simply make general claims for fraud with

no specific explanation of what activity was allegedly fraudulent. This is insufficient under

Rule 9(b). See SEC v. Patel, No. 07-CV-39-SM, 2009 WL 2015794, at *1-2 (D.N.H. July

7, 2009) (explaining that “to reasonably determine that any particular claim should not be

dismissed would require the court to first comb the complaint in search of factual support for

each element of the multiple claims pled as to each defendant, and then evaluate the

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adequacy of that factual support,” which “is, of course, plaintiff’s job in the first instance,

not the court’s”). The fraud claims are therefore dismissed.

Because it is not clear that amendment would be futile, this dismissal is without

prejudice to the claims’ reassertion in an amended complaint. See Swartz, 476 F.3d at 761

(explaining that a claim is properly dismissed with prejudice where amendment would be

futile). However, if N’Genuity elects to replead its fraud claims, it must plead the “time,

place, and specific content” of each misrepresentation as well as “the identities of the parties”

involved in each misrepresentation. Edwards, 356 F.3d at 1066.

D. Claims Six and Seven

Defendants argue that Claim Six (interference with existing contractual relationships)

and Claim Seven (interference with prospective business relationships) should be dismissed

because N’Genuity “does not allege the existence of any actual contract or business

relationship that has been subject to interference.” (Dkt. # 18 at 13-15.) This argument

strains credulity. The Complaint plainly alleges that N’Genuity had ongoing business

relationships with prime vendors, and it is these relationships that are the subject of the

interference claims. Defendants also seem to suggest that no contractual obligations between

Pierre Foods and N’Genuity have been breached, but for the reasons described elsewhere in

this order that argument is not persuasive. N’Genuity has alleged that Pierre Foods, through

the Individual Defendants, fraudulently insinuated itself into a business relationship with

N’Genuity for the purpose of sabotaging and co-opting N’Genuity’s relationships with prime

vendors. These are sufficient allegations to state claims for interference with existing and

prospective business and contractual relationships.

E. Claim Eight

Defendants argue that Claim Eight (unfair competition) must be dismissed because

N’Genuity “never alleges, and cannot allege, that any Defendant violated any agreement to

refrain from competition.” (Dkt. # 18 at 12.) However, in Arizona “[t]he common law

doctrine of unfair competition is based on principles of equity,” and thus “[t]he doctrine

encompasses several tort theories, such as trademark infringement, false advertising,

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‘palming off,’ and misappropriation.” Fairway Constructors, Inc. v. Ahern, 193 Ariz. 122,

124, 970 P.2d 954, 956 (Ct. App. 1998). Defendants never attempt to dispute these tortbased theories of unfair competition, which have factual support in the Complaint’s

allegation that Pierre Foods was attempting to pass off N’Genuity’s chicken wing products

as its own.

In any event, N’Genuity defends the contract-based theory of unfair competition by

arguing that an underlying agreement not to compete is part of both the written

Confidentiality and Nondisclosure Agreement and an express oral agreement between the

parties. (Dkt. # 35 at 17-18.) To the extent this claim rests on the oral agreement, for the

reasons described above in footnote nine the validity of that agreement (and thus this claim)

can only be determined in light of an evidentiary record. As for the written Confidentiality

and Nondisclosure Agreement, Defendants have made no attempt to rebut N’Genuity’s

argument that section two of that agreement constitutes a covenant not to compete using

N’Genuity’s products. (See id. at 14, 17.) That section provides that neither party would

make use of any confidential information given by the other party without consent. (Dkt. #

35 Ex. 3 at 1 (“The parties agree that neither Party, its agents, employees nor representatives,

will use the Confidential Information of the other Party except as agreed upon in writing by

the Parties.”).) In the absence of any argument to the contrary, the Court finds that this

section could be read as an agreement not to compete using confidential information. Thus,

N’Genuity has sufficiently stated a claim for unfair competition at this stage in the litigation.

F. Claims Nine and Ten

Defendants argue that Claim Nine (defamation) and Claim Ten (trade libel and

slander) are not pled with particularity. (Dkt. # 18 at 13.) However, Defendants provide no

persuasive authority that defamation, libel, and slander claims are required to be pled with

particularity. The Federal Rules of Civil Procedure do not include these claims among the

list of allegations that must be pled with particularity, and “[a] requirement of greater

specificity for [pleading] particular claims is a result that must be obtained by the process of

amending the Federal Rules, and not by judicial interpretation.” Swierkiewicz v. Sorema

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N.A., 534 U.S. 506, 515 (2002); see Galbraith v. County of Santa Clara, 307 F.3d 1119, 1125

(9th Cir. 2002) (“[N]early all of the circuits have now disapproved any heightened pleading

standard in cases other than those governed by Rule 9(b).”).

The case upon which Defendants’ argument to the contrary relies, Athans v. Starbucks

Coffee Co., No. CV-06-1841, 2007 WL 899130, at *1-2 (D. Ariz. Mar. 23, 2007), is readily

distinguishable. In Athans, the district court had dismissed a pro se plaintiff’s complaint

because of “a complete lack of factual detail and any articulated legal basis for Defendant’s

alleged liability.” Id. at *1. In dismissing the complaint’s purported defamation claim, the

court instructed the plaintiff to “identify what was said or written, by whom, when, and how

[the plaintiff] was injured” if the plaintiff chose to file an amended complaint. Id. at *2. The

plaintiff did file an amended complaint, but its allegations were “still so vague and

conclusory that they fail[ed] to provide [the defendant] with fair notice of the claim against

it.” Id. Therefore, the court dismissed the amended complaint. Id. 

Contrary to Defendants’ reading of the case, the court did not dismiss the defamation

claim because it was not pled with particularity. In fact, the Athans court explicitly

“recognize[d] that this claim is governed by the notice pleading standards of Rule 8, not the

more demanding standards of Rule 9.” Id. The court’s initial order was meant simply to

instruct a pro se plaintiff on the type of factual detail that would enable him to meet the

pleading requirements and was not announcing a broader requirement that the “who, what,

when, where, and how” of every specific defamatory statement be set out in a complaint.

The court’s ultimate dismissal, likewise, was predicated upon a failure to provide more than

“vague and conclusory” allegations, not upon a failure to plead defamation with particularity.

Here, the defamation claims are adequately pled. The Complaint alleges that during

the course of its business relationship with N’Genuity, Pierre Foods and Defendant Denning

repeatedly told prime vendors and ACES that N’Genuity wrongfully refused to place orders

with Pierre Foods, placing it in an untenable business position, when Pierre Foods knew that

this was untrue. (Dkt. # 1 at 22-24.) N’Genuity explains at length why it believes it had

every right to stop placing orders with Pierre Foods (id. at 14-17), and further explains how

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10It is clear from the Complaint, however, that only Pierre Foods and Denning are

alleged to be liable on these claims. (See Dkt. # 1 at 22-24 (alleging only that “Pierre Foods

and its employee and representative Tim Denning have made numerous false, defamatory,

and slanderous statements about N’Genuity”).) Thus, Claims Nine and Ten are dismissed

to the extent that they are asserted against Defendants Woodhams Sr. and Jr. It is not clear,

however, that N’Genuity could not amend its Complaint to add these Defendants, and thus

the dismissal is without prejudice. See Swartz, 476 F.3d at 761.

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it was damaged (id. at 24). Accompanied by the factual background provided above, these

are sufficient allegations to state claims for defamation, libel, and slander. Claims Nine and

Ten will therefore not be dismissed.10

G. Claim Eleven

Defendants argue that Claim Eleven (misappropriation of trade secrets and proprietary

information) should be dismissed because N’Genuity provides insufficient detail about what

the trade secret is and how it was misappropriated. (Dkt. # 18 at 15-16.) This argument is

unpersuasive. The Complaint provides that the unauthorized misappropriation of

N’Genuity’s trade secrets and proprietary information is “Pierre Foods’ unauthorized sale

of N’Genuity’s product,” that being the chicken wing products at the center of this litigation.

(Dkt. # 1 at 21.) While the Complaint does not explicitly say that “the trade secret is the

chicken wing product,” that is the clear implication of the Complaint given N’Genuity’s

allegation that it has “specially developed [the] chicken wing product, with N’Genuity’s

formula and specifications for taste, quality, and safety.” (Id. at 4.) Defendants have thus

been fairly put on notice that the trade secret at issue is the formula for the chicken wing

products, which N’Genuity alleges was misappropriated through overproduction and

unauthorized sales in violation of Pierre Foods’ agreements with N’Genuity. Defendants’

argument that N’Genuity “know[s] this is not the case,” and that the recipe actually belongs

to Pierre Foods (Dkt. # 42 at 16), is unavailing. On a motion to dismiss, the Court must

accept the allegations in the Complaint as true and construe them in the light most favorable

to N’Genuity. Smith, 84 F.3d at 1217. The Complaint alleges that the formula and

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specifications for the chicken wing products belong to N’Genuity. (Dkt. # 1 at 4.) Thus,

Claim Eleven need not be dismissed.

H. Claim Twelve

Defendants’ last argument is that N’Genuity cannot seek a declaratory judgment

(Claim Twelve). (Dkt. # 18 at 16-17.) Defendants first argue that this claim should be

dismissed because N’Genuity is also seeking money damages. However, the mere fact that

N’Genuity is seeking monetary damages does not mean that it cannot seek a declaratory

judgment. “[W]hen other claims are joined with an action for declaratory relief (e.g., bad

faith, breach of contract, breach of fiduciary duty, rescission, or claims for other monetary

relief), the district court should not, as a general rule, remand or decline to entertain the claim

for declaratory relief.” United Nat’l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1112 (9th

Cir. 2001) (quoting Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1998)).

Defendants have not provided the Court any reason to depart from this general rule.

The declaratory claim in this case is not coextensive with the other claims, and thus

N’Genuity has not “sought coercive relief on the issue,” as Defendants argue. Rather,

N’Genuity requests a declaration that it performed all of its obligations under its contracts,

that it did not breach or violate any obligations or duties to Pierre Foods, and that Pierre

Foods is no longer entitled to sell any N’Genuity product. The first two requests are

designed to insulate N’Genuity from any counterclaims Pierre Foods may intend to assert,

and are not elements of N’Genuity’s other claims. The third request is designed to stop any

future sales of chicken wing products, actions which (since they have not yet occurred) are

also not the subject of N’Genuity’s other claims.

Defendants also argue, very briefly, that the request for declaratory relief should be

dismissed because there are no facts in the Complaint to support a claim that Pierre Foods

is prohibited from selling excess chicken wing products. This argument seems to be based

on the notion that N’Genuity has not alleged that such sale would violate its contractual

obligations. However, N’Genuity has directly alleged that the sale of these products without

authorization violates the Confidentiality and Nondisclosure Agreement and other contractual

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obligations. (Dkt. # 1 at 21.) Thus, the Court will not dismiss the declaratory claim under

this reasoning.

CONCLUSION

For the reasons described above:

IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss (Dkt. # 18) is

GRANTED IN PART and DENIED IN PART.

IT IS FURTHER ORDERED that Claim Five (fraudulent inducement) against

Pierre Foods is DISMISSED WITH PREJUDICE.

IT IS FURTHER ORDERED that all claims against Pierre Foods based on events

occurring prior to December 12, 2008, are DISMISSED WITH PREJUDICE.

IT IS FURTHER ORDERED that Claim Two (breach of the duty of good faith and

fair dealing) against all Defendants is DISMISSED WITH PREJUDICE to the extent that

it relies on pre-contract actions.

IT IS FURTHER ORDERED that Claim Three (fraudulent misrepresentation)

against all Defendants, Claim Four (fraudulent concealment and nondisclosure) against all

Defendants, and Claim Five (fraudulent inducement) against the Individual Defendants are

DISMISSED WITHOUT PREJUDICE.

IT IS FURTHER ORDERED that Claim Nine (defamation, libel, and slander) and

Claim Ten (trade libel and slander) are DISMISSED WITHOUT PREJUDICE to the

extent that they are asserted against Defendants Woodhams Sr. and Woodhams Jr.

DATED this 9th day of September, 2009.

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