IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-50193

PUBLIC HEALTH EQUIPMENT & SUPPLY CO., INC.,

Plaintiff-Appellant

v.

CLARKE MOSQUITO CONTROL PRODUCTS, INC.;

CLARKE ENVIRONMENTAL MOSQUITO MANAGEMENT, INC.;

CLARKE ENGINEERING TECHNOLOGIES, INC.,

Defendants-Appellees

Appeal from the United States District Court

for the Western District of Texas

USDC No. 5:08-CV-895-OLG

Before REAVLEY, BENAVIDES, and CLEMENT, Circuit Judges.

PER CURIAM:

*

Appellant Public Health Equipment & Supply Co., Inc. ("Public") appeals

the district court's order granting Appellees' Clarke Mosquito Control Products,

Inc.'s, Clarke Environmental Mosquito Management, Inc.'s, and Clarke

Engineering Technologies, Inc.'s (collectively "Clarke") 12(b)(6) motion to dismiss

and denying Public's motion to amend. We reverse. Reviewing the second

United States Court of Appeals

Fifth Circuit

F I L E D

December 9, 2010

Lyle W. Cayce

Clerk

 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

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denial of leave to amend is moot, but we reach it only to fault the magistrate

judge's holding that the amendment would be futile.

In its original state court petition—the live pleading—Public alleges that

it had an exclusive distribution agreement with Clarke to distribute Clarke's

insecticides and equipment for the territory covering Arizona, New Mexico,

Oklahoma, and Texas. Public added Mexico to its territory through an agency

agreement with Flores Leal. Public alleges that Clarke deliberately cut Public

out of the business in Mexico by dealing directly with Leal in violation of Public's

exclusive distribution agreement with Clarke and interfering with Public's

agency relationship with Leal. Public also alleges that Clarke made agreements

jointly to pursue business with Public in (1) Jefferson County, Texas, and (2)

Cameron, Willacy, and Hidalgo Counties. Despite Clarke's agreements to

cooperate and share profits in these enterprises, Clarke used Public's contacts

and introductions to procure these contracts for Clarke only.

Public originally filed suit in state court in Bexar County. It brought

claims for (1) tortious interference with contracts and business relationships, (2)

conspiracy, and (3) breach of contract. Clarke answered, counterclaimed, and

removed the case predicated on diversity. On January 5, 2009, the district court

entered a scheduling order requiring that amended pleadings be filed by March

23, 2009, and closing discovery on June 8, 2009. On January 16, 2009, Clarke

filed its 12(b)(6) motion to dismiss. On February 6, 2009, Public responded and

alternatively moved for leave to amend. Four months later, on June 5, 2009, the

district court granted Clarke's motion to dismiss without addressing—and

thereby implicitly denying—Public's motion for leave to amend.

On August 31, 2009, Public renewed its motion for leave to amend,

attaching its proposed amended complaint. On November 6, 2009, the

magistrate judge recommended denying Public's motion, and on December 3,

2009, the district court overruled Public's objections without comment and

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adopted the magistrate judge's recommendation. After ruling on Clarke's

counterclaim, the district court entered final judgment. This appeal followed.

We review a district court's dismissal under Rule 12(b)(6) de novo,

accepting all well-pleaded facts as true. Sullivan v. Leor Energy, LLC, 600 F.3d

542, 546 (5th Cir. 2010). We must construe the complaint in the light most

favorable to the plaintiff and draw all reasonable inferences in plaintiff's favor.

Lovick v. Ritemoney Ltd., 378 F.3d 433, 437 (5th Cir. 2004). "To survive a

motion to dismiss, a complaint must contain sufficient factual matter, accepted

as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal,

129 S. Ct. 1937, 1949 (2009) (internal quotation omitted). "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." Id. "The court's review is limited to the complaint, any documents

attached to the complaint, and any documents attached to the motion to dismiss

that are central to the claim and referenced by the complaint." Lone Star Fund

V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). "The

court's task is to determine whether the plaintiff has stated a legally cognizable

claim that is plausible, not to evaluate the plaintiff's likelihood of success." Id.

We review the district court's denial of a motion to amend for abuse of

discretion. Fahim v. Marriott Hotel Servs., Inc., 551 F.3d 344, 347 (5th Cir.

2008). Rule 15 governs motions to amend made before the expiration of a

scheduling order's deadline and provides that "[t]he court should freely give

leave when justice so requires." FED. R. CIV. P. 15(a)(2); see Fahim, 551 F.3d at

347. Post-deadline motions to amend are covered by Rule 16(b)'s more stringent

requirements and "may be [granted] only for good cause and with the judge's

consent." FED. R. CIV. P. 16(b)(4); Fahim, 551 F.3d at 348.

The district court erred when it implicitly denied Public's first motion for

leave to amend. "Denial of a motion to amend is warranted for undue delay, bad

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faith or dilatory motive on the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed, undue prejudice to the opposing

party by virtue of the allowance of the amendment, [and] futility of the

amendment." Rosenblatt v. United Way of Greater Houston, 607 F.3d 413, 419

(5th Cir. 2010) (internal quotation omitted). "We have held that a district court

abuses its discretion, however, when it gives no reasons for denying a timely

motion to amend, at least when the defendant would not be unduly prejudiced

by the amendment." United States ex rel. Steury v. Cardinal Health, Inc., ___

F.3d ___, 2010 WL 4276073, *6 (5th Cir. 2010).

This was Public's first motion to amend, made before the deadline to

amend, so bad faith and/or dilatory motive is not an issue here. Moreover,

Public's motion was not merely a bare request to amend appended to the end of

a response to a motion to dismiss, but was instead clearly set out and titled in

a section of its response. United States ex rel. Willard v. Humana Health Plan

of Texas Inc., 336 F.3d 375, 387 (5th Cir. 2003). Public laid out the grounds on

which the amendment should be permitted, explaining that its state court

petition was drafted to comply with Texas's lenient notice pleading standards

and sought leave to replead, if necessary. Therefore, Public moved with

sufficient clarity to allow the district court to determine whether to allow the

amendment. The defendants would not have been prejudiced had the district

court allowed the amendment at the time, because the plaintiff moved to amend

fully four months before the close of discovery. Nor are we convinced that

allowing the amendment would be futile.

First, in order for dismissal to be appropriate on the basis of a successful

affirmative defense, that defense must appear on the face of the complaint.

EPCO Carbon Dioxide Prods., Inc. v. JP Morgan Chase Bank, N.A., 467 F.3d

466, 470 (5th Cir.2006). The district court granted Clarke's motion to dismiss

because it found that the distributorship agreement was unenforceable under

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the statute of frauds. The statute of frauds requires that agreements meeting

1

certain criteria must be in writing. The district court based its finding that the

agreement violated the statute of frauds not on the face of the petition but on

Clarke's motion to dismiss which argued that the agreement—if any—was oral.

In its petition, Public alleged that it had an exclusive distribution agreement

with Clarke. The law does not require that plaintiffs plead affirmatively that a

contract is written. Id. ("[P]leadings need not identify every element of [a] claim,

particularly where the contested elements relate to the affirmative defense of the

statute of frauds."). In order for an agreement to violate the statute of frauds on

the face of the complaint, the plaintiff must indicate that the agreement is not

written. A court may not assume that every contract is oral absent allegations

of a writing. Absent an amendment alleging an oral contract—which the court

could not anticipate—Public's motion to amend would not be futile based on the

statute of frauds.

Second, Public's answer to Clarke's statute of frauds argument makes it

clear that any determination regarding the validity of the contract would be a

question of fact and thus not appropriate for dismissal on 12(b)(6). In its

response to the motion to dismiss, Public argued that the agreement was

evidenced in multiple documents spanning the years of the agreement as allowed

by the merchant's exception to the statute of frauds. The UCC provides that

writings confirming sales between merchants may serve to satisfy the statute of

frauds. TEX. BUS. & COM. CODE § 2.201(b). While the question of whether a

contract falls into the statute of frauds is a question of law, Beverick v. Koch

Power, Inc., 186 S.W.3d 145, 149 (Tex. App.–Houston [1st Dist.] 2005, pet.

denied), "[w]hether the circumstances of a particular case fall within an

Texas courts have held that a distributorship is a contract for the sale of goods and 1

therefore subject to the statute of frauds. See Con't Casing Corp. v. Siderca Corp., 38 S.W.3d

782, 788 (Tex. App.–Houston [14th Dist.] 2001, no pet.).

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exception to the statute of frauds is generally a question of fact." Adams v.

Petrade Int'l, 754 S.W.2d 696, 706 (Tex. App.–Houston [1st Dist.] 1988, writ

denied). So, even if Public amended and alleged that the contract met the

statute of frauds under the merchant's exception, the district court could not

have used Rule 12(b)(6) to make the determination regarding the enforceability

of the agreement. Therefore, allowing Public to amend would not have been

futile. Accordingly, the court erred when it implicitly denied Public's first

motion for leave to amend.

The dismissal is reversed. Because the first motion to amend should have

been granted and it is now apparent that a plausible complaint can be filed,

when that is done the court can move beyond the pleadings stage.

REVERSED and REMANDED.

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