IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

DSW, Inc., :

Plaintiff, : Case No. 2:11-cv-0036

v. : Magistrate Judge Kemp

Zina Eva, Inc., :

Defendant. :

 OPINION AND ORDER

This is a breach of contract case. Plaintiff DSW, a

retailer of various items such as shoes and accessories, claims

that it ordered $77,455.68 worth of handbags from defendant Zina

Eva. After they arrived, DSW decided they were not up to its

standards and did not match the samples which it had received

before it placed its orders. In its complaint, it asks for its

money back, along with interest and attorneys’ fees.

Despite the relatively straightforward nature of DSW’s legal

claims, Zina Eva has filed a motion to dismiss, arguing that,

under the Supreme Court’s recent decisions in Ashcroft v. Iqbal, 

129 S.Ct. 1937 (2009) and Bell Atlantic Corp. v. Twombly, 550

U.S. 544 (2007), the complaint does not meet federal pleading

standards. The motion is fully briefed. For the following

reasons, it will be denied.

I. Background of the Motion to Dismiss

Before turning to a discussion of how Iqbal and Twombly have

affected the Court’s review of a complaint when its sufficiency

is challenged in a Rule 12(b)(6) motion to dismiss, it is helpful

to explain the bases for Zina Eva’s motion. Taking them in

reverse order, Zina Eva argues that DSW cannot successfully plead

a claim for unjust enrichment, which is a quasi-contractual

remedy, because the subject of the parties’ dealings is covered

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by an express contract. It then argues that the claim based on

the express contract is not properly pleaded because the

governing law, Ohio’s version of the Uniform Commercial Code,

requires, among other things, proof of both a contract and of a

breach, and these elements have not been pleaded properly. 

Although the complaint specifically states that the parties

entered into a contract for the sale of goods and attaches a copy

of the two purchase orders as exhibits, Zina Eva asserts that the

existence of a contract has not properly been pleaded because its

signature does not appear on either of the purchase orders. It

points out that Ohio Rev. Code §1302.04 requires a contract for

the sale of goods in excess of $500.00 to be evidenced by a

writing, and that the writing be signed by the party against whom

enforcement is sought.

As to the issue of pleading a breach of contract, Zina Eva

contends that an action for breach can be maintained only if DSW

properly rejected the goods as non-conforming. The complaint

does not plead that DSW did so. Consequently, Zina Eva argues

that, as a matter of law, DSW accepted the allegedly nonconforming goods and cannot now claim that they were defective or

substandard. As an alternative to these two arguments, Zina Eva

asserts that the complaint lacks the minimum detail required

under Iqbal and Twombly to plead a contract claim because there

are no facts pleaded concerning various terms of the contract,

such as its date or a description of the quality of goods which

were to be delivered. Zina Eva also faults the complaint for

failing to allege the particular ways in which the handbags were

substandard or non-conforming. Thus, Zina Eva claims, it is left

to “speculate” what the problems were, and that such speculation

is inconsistent with the requirement that a claim for relief be

pleaded with enough detail to make recovery “plausible.”

 II. Application of Iqbal and Twombly

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After the Supreme Court decided Twombly (which was an

antitrust case) and Iqbal (which was a case involving claims

against governmental defendants who enjoy various types of

immunities from suit), lower courts have been struggling with how

to apply the principles announced in those cases to more prosaic

claims such as those involving simple negligence or breach of

contract. It seems likely that, if DSW’s complaint had been

filed pre-Twombly, Zina Eva would not have moved to dismiss

because the Court would clearly have found the complaint to be

sufficient under the pre-Twombley pleading standards. Thus, Zina

Eva’s motion raises the issue of how different the current

standards of pleading are in the context of a garden-variety

claim for breach of a contract for the sale of goods. For the

following reasons, the Court concludes that the standards

applicable to this type of case have not changed as much as Zina

Eva would like the Court to believe, and that DSW’s complaint

survives the attack mounted upon it by Zina Eva’s motion.

One thing is clear: after Iqbal and Twombley, the test

announced in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), which

allowed a district court to dismiss a case under Rule 12(b)(6)

only if “it appears beyond doubt that the plaintiff can prove no

set of facts in support of his claim which would entitle him to

relief,” is no longer good law. See Twombley, 550 U.S. at 562-

63. Twombley replaced that test with one of plausibility,

requiring that a complaint, notwithstanding the “short and plain

statement” language found in Fed.R.Civ.P. 8(a), contain “enough

factual matter (taken as true) to suggest that” the basic

elements of the claim can be proven (which, in that case, meant

that the complaint must have alleged “plausible grounds to infer

an agreement” in violation of the antitrust laws). Id. at 556. 

The Supreme Court stressed, however, that it was not requiring

the pleader to show “probability ... at the pleading stage” and

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that “a well-pleaded complaint may proceed even if it strikes a

savvy judge that actual proof of those facts is improbable ....” 

Id. Iqbal elaborated on this standard, setting out an analytical

model which requires the Court to separate legal conclusions

(which need not be accepted as true) from statements of fact and

to make the required plausibility determination based on the

allegations which remain. Thus, “where the well-pleaded facts do

not permit the court to infer more than the mere possibility of

misconduct, the complaint has alleged - but it has not ‘show[n] -

‘that the pleader is entitled to relief.’” Iqbal, 129 S.Ct. at

1950, quoting Fed.R.Civ. P. 8(a)(2).

Despite this progression in the Rule 12(b)(6) analysis, it

is important not to lose sight of the purpose of Rule 8(a). When

the Federal Rules of Civil Procedure were adopted, one of the

drafters’ goals was to eliminate the common-law requirement of

detailed pleading, which often resulted in the dismissal of cases

simply because of a mis-step in the pleading process and not

because the case lacked merit. Those rules relating to the

adequacy of pleadings, which have not been amended substantively

since they were first adopted in 1938, provide in substance that

a pleading is intended not to lay out every fact which the

pleader will eventually be required to prove in order to prevail,

but rather to give the responding party “fair notice” of the

claim being asserted. This was an intentional departure from

prior practice. See, e.g. Nagler v. Admiral Corporation, 248

F.2d 319, 324 (2d Cir. 1957) (“‘The intent and effect of the

rules is to permit the claim to be stated in general terms; the

rules are designed to discourage battles over mere form of

statement and to sweep away the needless controversies which the

codes permitted that served either to delay trial on the merits

or to prevent a party from having a trial because of mistakes in

statement’”), quoting Report of Proposed Amendments, October 1955

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at 18-19, and Preliminary Draft, May 1954, at 8-9, from the

Advisory Committee on Civil Rules. The form complaints which are

part of the Rules of Civil Procedure are consistent with this

goal, and illustrate just how “short and plain” the drafters of

the rules thought a complaint could be and still survive a motion

to dismiss. See, e.g., Form 11, which is a complaint sounding in

negligence and which avers (as to liability) only that “the

defendant negligently drove a motor vehicle against the

plaintiff.” Even after Iqbal and Twombly, courts continue to

utilize the concept that a complaint should be “sufficient to

give ... notice of the basis for [the pleader’s] claim.” See

Fowler v. UPMC Shadyside, 578 F.3d 203, 212 (3d Cir. 2009). 

Thus, even if there has been some shift in the conceptual

analysis applicable to a Rule 12(b)(6) motion to dismiss for

failure to state a claim, there has not been a wholesale

abandonment of the Rules’ goal of eliminating “needless

controversies” over pleadings which clearly state plausibly

meritorious claims. 

It seems unlikely that DSW’s complaint is so vague that Zina

Eva has not been given “fair notice” of the basis of the claims

asserted against it. The complaint refers to two specific orders

of handbags, sets forth the dollar amount of the purchases, and

alleges a variance between the samples that formed the basis of

the contract and the handbags which were actually delivered. It

does seem likely that DSW could have included additional factual

allegations, but the question is not how many potential factual

allegations were omitted from the complaint, but the sufficiency

of those which were included. It is still true, even after Iqbal

and Twombley, that “the exact terms of the parties' contractual

arrangement, whether the parties' written contract was modified

in any material way, the effect of any additional terms, and

whether additional consideration supported such a modification

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each present factual and legal questions that the pleadings

simply cannot answer.” Colonial Trading, LLC v. Basset Furniture

Industries, Inc., 2010 WL 5071174, *4 (W.D.N.C. December 7,

2010). As the Twombly court put it, all that pleaders need do is

to allege enough facts to “nudge[] their claims across the line

from conceivable to plausible ....” Id. at 570. The Court

concludes that DSW’s factual allegations supply the required

amount of “push” to allow this case to “pass go.”

The primary flaw which Zina Eva identifies in the contract

claim is the failure to refer to or incorporate a writing that

was signed by Zina Eva. Essentially, it argues that the statute

of frauds bars the claim. However, under Ohio law, “[t]he

statute of frauds in an affirmative defense to a claim.” Mossa

v. W. Credit Union, Inc., 84 Ohio App.3d 177, 180 (Franklin Co.

1992). Generally, a complaint is not required to anticipate and

negate affirmative defenses that the defendant might raise. See,

e.g., Harris v. Pepsi Bottling Group, Inc., Location No. 42, 438

F.Supp.2d 728, 733 (E.D. Ky. 2006). Even if that were not so,

DSW has identified, from the facts it has pleaded (i.e. the

issuance of purchase orders, payment, acceptance of payment and

delivery of goods) a plausible scenario under which a contract

might be proved even if Zina Eva failed to sign the purchase

orders. That is enough, even under the new pleadings standard,

to constitute a viable allegation that the parties entered into a

contract.

Zina Eva also takes issue with the lack of detail in the

complaint concerning the way in which the handbags failed to

conform to the contract. The complaint, however, alleges facts

as opposed to legal conclusions on this issue, stating that the

handbags delivered were not the same as the ones provided as

samples and that their quality was inferior. It does not take

much imagination to envision additional facts which might support

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this claim, nor is it required that each and every way in which

the handbags were substandard be spelled out in the complaint. 

Even if the allegations made about the goods present mixed

questions of law and fact, there is enough factual substance here

to create a plausible scenario under which Zina Eva could be held

liable. Additional details are the appropriate subject of

discovery, and this is not a case where Zina Eva will be forced

to do discovery in the absence of a plausible claim for relief. 

 Finally, Zina Eva argues that DSW may not maintain its breach

of contract claim because it has not alleged any facts in support

of the legal conclusion that it properly rejected its acceptance

of the handbags. It cites to Ohio Rev. Code §1302.64(A)(2) for

the requirements which must be met in order for a contracting

party properly to reject its acceptance of goods under the

Uniform Commercial Code. However, a party may still sue for

breach of contract even if it has accepted goods and if any

attempt at a subsequent rejection is ineffective. See R.C.

§1302.65(B) (“acceptance does not of itself impair any other

remedy provided by sections 1302.01 to 1302.98, inclusive, of the

Revised Code for non-conformity”); see also Ohio Diffuser &

Ventilation Supply Company v. Burks & Needles Co., 1980 WL

351950, *6 (Wyandot Co. App. May 6, 1980). Thus, whether or not

DSW ever accepted the handbags or, if it did, whether or not it

subsequently revoked its acceptance, it is not precluded from

seeking a remedy (although perhaps not the exact remedy of a full

refund of the purchase price - but the facts will have to be

developed further before that conclusion can be reached). In the

Court’s view, these are all fact questions which will await 

discovery for further development. Consequently, the Court finds

no fatal defects in the breach of contract claim as it is

currently pleaded.

Zina Eva’s primary issue with the unjust enrichment claim is

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that, under Ohio law, a party may not recover for unjust

enrichment when an express contract exists concerning the same

subject. See, e.g., Hughes v. Oberholtzer, 162 Ohio St. 330

(1954). However, as DSW correctly points out, Fed.R.Civ.P.

8(d)(2) and (3) allow a party to plead claims in the alternative

and to plead inconsistent claims. Ohio courts have approved

pleading express contract and unjust enrichment as alternative

claims, see, e.g., Firelands Regional Med. Ctr. v. Jeavons, 2008

WL 4408600, *5 (Erie Co. App. September 30, 2008), and this Court

has done the same. See MVB Mortg. Corp. v. F.D.I.C., 2010 WL

654051, *4 (S.D. Ohio February 19, 2010) (Graham, J.). 

Alternatively, Zina Eva argues that, again citing to the

more stringent pleading standards discussed at length above, the

unjust enrichment claim is lacking in factual detail and does not

plausibly state a claim under Ohio law, which requires proof of

“(1) a benefit conferred by [plaintiff] upon [defendant]; (2)

knowledge by [the defendant] of the benefit; and (3) retention of

the benefit by [defendant] under circumstances where it would be

unjust to do so without payment.” See Hambleton v. R.G. Barry

Corp., 12 Ohio St.3d 179, 183 (1984), quoting Hummel v. Hummel,

133 Ohio St. 520, 525 (1938). However, fairly read, the

complaint alleges that DSW paid full price for inferior goods

which were worth less than the amount paid. Should the contract

claim fail, DSW has a reasonable chance of proving that it would

be unjust for Zina Eva to retain the money paid to it beyond the

value of the goods which it sold. See, e.g., United States v.

Applied Pharmacy Consultants, Inc., 182 F.3d 603, 609 (8th Cir.

1999) (upholding a verdict in favor of a purchaser of goods on an

unjust enrichment claim where the seller “had in fact been

unjustly enriched at the expense of the plaintiff, because [it]

had received for certain goods some $242,000 more than they were

worth”). Thus, the unjust enrichment claim has been pleaded both

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properly and sufficiently well to withstand a motion to dismiss.

III. Conclusion and Order

For all of the reasons set forth above, the Court concludes

that the complaint adequately states a claim upon which relief

may be granted both as to the breach of contract claim and the

unjust enrichment claim. The motion to dismiss the complaint

(#6) is therefore denied.

/s/ Terence P. Kemp 

United States Magistrate Judge

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