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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

MEI MEI HU,

Plaintiff,

v.

ASK AMERICA, LLC,

Defendant/Counter-Plaintiff,

v. 

VAXXINITY, INC., MEI MEI HU, 

and LOUIS GARFIELD REESE, IV,

Counter-Defendant and ThirdParty Defendants. 

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Civil Action No. 3:22-CV-2432-X

MEMORANDUM OPINION AND ORDER

Before the Court are Plaintiff/Counter-Defendant Mei Mei Hu and Third-Party 

Defendants Louis Garfield Reese, IV, and Vaxxinity, Inc.’s motions to dismiss. (Docs. 

47, 52). Having considered the motions, the underlying facts, and the applicable 

caselaw, the Court DENIES the motions. 

I. Background

This is an alleged breach of contract and fraud case. Vaxxinity was going 

public with an Initial Public Offering (“IPO”) set to occur on November 11, 2021. The 

day before the IPO, Hu and Reese allegedly told Defendant/Counter-Plaintiff Ask 

America, LLC that another investor, James Chui, committed to buying $20 million of 

common stock in the IPO, but his money was tied up in banks overseas so he could 

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not transfer the money before the IPO closing date. According to Ask America, Hu 

and Reese represented that if Ask America would purchase the $20 million of 

Vaxxinity stock, Chui would repurchase the stock in three months. Hu and Reese 

also stated they would personally pay Ask America for any investment losses and 

guaranty a minimum return on investment of $3.6 million. Hu, Reese, and Ask 

America subsequently entered into a guaranty contract, and Ask America purchased 

$20 million of Vaxxinity stock. 

Ask America alleges that Chui was unaware of Hu and Reese’s representations 

and not willing or able to repurchase the $20 million in Vaxxinity shares. Hu and 

Reese maintain that Ask America never had an agreement in place with Chui, and 

therefore, the conditions precedent to the guaranty contract were never met. 

Hu filed this action seeking a declaratory judgment finding the guaranty 

contract at issue was unenforceable and void. Ask America filed counterclaims 

against Hu, Reese, and Vaxxinity alleging breach of contract, violations of the Texas 

Securities Act, and fraud. Hu, Reese, and Vaxxinity filed the present motions to 

dismiss Ask America’s counterclaims for failure to state a claim. The motions are 

ripe for this Court’s consideration. 

II. Legal Standard

Federal Rule of Civil Procedure 8 requires a pleading to state “a short and plain 

statement of the claim showing that the pleader is entitled to relief.”1 The pleading 

standard does not require detailed factual allegations, but “[t]hreadbare recitals of a 

1 Fed. R. Civ. P. 8(a)(2). 

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cause of action, supported by mere conclusory statements, do not suffice.”2 For a 

complaint to survive a motion to dismiss under Rule 12(b)(6), it “must contain 

sufficient factual matter, accepted as true, to state a claim to relief that is plausible 

on its face.”3 A claim is facially plausible when the plaintiff pleads factual content 

that allows the court to draw the reasonable inference that the defendant is liable for 

the misconduct alleged.4 

For purposes of a motion to dismiss, courts must accept all well-pleaded facts 

as true and construe the complaint in the light most favorable to the plaintiff.5 “In 

other words, a motion to dismiss an action for failure to state a claim admits the facts 

alleged in the complaint, but challenges plaintiff’s rights to relief based upon those 

facts.”6 

III. Analysis

Hu, Reese, and Vaxxinity move to dismiss each of Ask America’s 

counterclaims. The Court considers each in turn. 

A. Breach of Contract

In Texas, a breach-of-contract plaintiff must allege: “1) the existence of a valid 

contract; 2) performance or tendered performance by the plaintiff; 3) breach of the 

2 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

3 Id. 

4 Id. 

5 Muhammad v. Dallas Cnty. Cmty. Supervision & Corrs. Dep’t., 479 F.3d 377, 379 (5th Cir. 

2007). 

6 Ramming v. U.S., 281 F.3d 158, 161–62 (5th Cir. 2001). 

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contract by the defendant; and 4) damages to the plaintiff resulting from the breach.”7 

Here, the parties agree that the contract exists, but the issue concerns its

interpretation. As the Court explained in its prior order, determining whose 

interpretation should prevail is an issue for summary judgment.8 For purposes of the 

present motions to dismiss, Ask America’s counterclaim contains sufficient factual 

matter to plausibly allege a claim for relief. 

B. Fraud 

For fraud claims, Rule 9(b) requires a heightened pleading standard. In a 

complaint, plaintiffs must “state with particularity the circumstances constituting 

fraud or mistake.”9 Rule 9(b) requires the who, what, when, where, and how to be 

laid out in the complaint and pleaded with particularity.10 Under Texas law, to 

establish a claim for fraudulent inducement, the plaintiff must allege a 

“misrepresentation[] that defendant knew . . . was false and intended [to] induce 

plaintiff to enter into the contract through that misrepresentation; that plaintiff 

actually relied on the misrepresentation in entering into the contract; and that

7 Lewis v. Bank of Am., 343 F.3d 540, 545 (5th Cir. 2003).

8 See Doc. 24. 

9 FED. R. CIV. P. 9(b). 

10 Pipefitters Local No. 636 Defined Benefit Plan v. Zale Corp., 499 F. App’x 345, 349 (5th Cir. 

2012); Shushany v. Allwaste, Inc., 992 F.2d 517, 521 (5th Cir. 1993). 

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plaintiff’s reliance led plaintiff to suffer an injury through entering into the 

contract.”11 

Ask America’s counterclaim contains sufficient factual allegations to establish 

the who, what, when, where, why, and how for its fraud claim. Specifically, it alleges 

that on November 10, 2021, Hu and Reese, knowing that they were $20 million short 

for the IPO, falsely told Ask America that Chui committed to buying $20 million of 

common stock in the IPO, but his money was tied up in banks overseas so he could 

not transfer the money before the IPO closing date. Hu and Reese then falsely 

represented that if Ask America would purchase the $20 million of Vaxxinity stock, 

Chui would repurchase the stock in three months, and Hu and Reese also would 

personally pay Ask America for any investment losses and guaranty a minimum 

return on investment of $3.6 million. Ask America subsequently purchased $20 

million of Vaxxinity stock, but Chui was unaware of these representations and not 

willing or able to repurchase the $20 million in Vaxxinity shares. 

Taking these well-pled facts as true, as the Court is required to do at this stage, 

the Court concludes that Ask America has plausibly alleged its fraud claim.

C. Texas Securities Act 

“The Texas Securities Act (the “TSA”) creates causes of action for securities 

fraud against various parties, including sellers of securities and aiders and abettors. 

Regarding sellers of securities, the TSA states:

A person who offers or sells a security ... by means of an untrue 

statement of a material fact or an omission to state a material fact 

11 Hoffman v. L & M Arts, 838 F.3d 568, 576 (5th Cir. 2016) (cleaned up). 

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necessary in order to make the statements made, in the light of the 

circumstances under which they are made, not misleading, is liable to 

the person buying the security from him .... However, a person is not 

liable if he sustains the burden of proof that either (a) the buyer knew 

of the untruth or omission or (b) he (the offeror or seller) did not know, 

and in the exercise of reasonable care could not have known, of the 

untruth or omission.”12 

Here, Hu, Reese, and Vaxxinity contend that the guaranty contract is not a 

security, and therefore, the Court should dismiss Ask America’s TSA counterclaims. 

But, as Ask America notes, it plausibly alleged that the guaranty contract is an 

investment contract. Investment contracts are securities, and an investment contract 

is 

a contract, transaction, or scheme through which a person pays money 

to participate in a common venture or enterprise with the expectation of 

receiving profits, under circumstances in which the failure or success of 

the enterprise, and thus the person's realization of the expected profits, 

is at least predominately due to the entrepreneurial or managerial, 

rather than merely ministerial or clerical, efforts of others.13 

Ask America alleged that it invested $20 million in common stock in Vaxxinity

for its IPO, with the expectation of receiving profits from a combination of Vaxxinity’s 

performance, Hu and Reese’s payment of its losses and a minimum return on 

investment, and Chui’s repurchase of the shares. Thus, Ask America plausibly 

alleged that the agreement was an investment contract, i.e., a security for purposes 

of the TSA. The counterclaims should not be dismissed on this basis. 

12 Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 343 (5th Cir. 2008) (quoting Tex. Rev. Civ. 

Stat. Ann. art. 581–33(A)(2)). 

13 Life Partners, Inc. v. Arnold, 464 S.W.3d 660, 681 (Tex. 2015).

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IV. Conclusion

For the reasons explained above, the Court DENIES the motions to dismiss. 

(Docs. 47, 52). Accordingly, the parties shall file a joint proposed amended scheduling 

order by July 15, 2024. 

IT IS SO ORDERED this 1st day of July, 2024.

___________________________________

BRANTLEY STARR

UNITED STATES DISTRICT JUDGE

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