NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

 

MARK C. MEADE, :

 :

 Plaintiff, : Hon. Dennis M. Cavanaugh

 : 

 v. : OPINION 

:

: Civil Action No. 11-cv-900 (DMC)(JAD)

:

KIDDIE ACADEMY DOMESTIC :

FRANCHISING, et. al., :

 : 

 Defendants. :

DENNIS M. CAVANAUGH, U.S.D.J.:

This matter comes before the Court upon the Motion of Defendants Kiddie Academy

Domestic Franchising, LLC (“Kiddie Academy”), Michael Miller, Susan Wise and Bill Endres

(collectively, “Defendants”) to Dismiss the Complaint (ECF No. 5). Pursuant to Rule 78, no oral

argument was heard. After carefully considering the submissions of the parties, and based upon the

following, it is the finding of this Court that Defendants’ Motion is granted.

 

I. BACKGROUND

This case involves alleged fraudulent statements and misrepresentations made as part of

a franchise agreement. Plaintiff is Mark C. Meade, the President of the Dasoda Corporation

(“Dasoda”), representing himself in this action. Defendant Kiddie Academy is a franchisor of child

care learning centers. The individuals named as defendants are employees of Kiddie Academy. 

Kiddie Academy and Dasoda are parties to a franchise agreement dated November 15, 2006 (the

“Franchise Agreement”). 

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Plaintiff filed his Complaint on February 16, 2011, in which he alleges that Defendants:

(1) made false and misleading statements or omissions that Plaintiff relied on to enter into the

franchise agreement; (2) made false and misleading statements in the preparation of an SBAbusiness

loan; (3) failed to provide services promised by the franchise; (4) misrepresented that Plaintiff would

earn substantial income; and (5) caused Plaintiff to enterinto agreements with equipment and service

providers that were harmful to Plaintiff. (ECF No. 1). The Complaint contains no other information

beyond these statements and a brief statement of jurisdiction. At no point does the Complaint

reference any of the Defendants by name or title, nor does the Complaint mention Dasoda or

Plaintiff’s position with Dasoda. On March 18, 2011, Defendants filed a Motion to Dismiss and a

Brief in support of that Motion. (ECF No. 5, 6). On April 7, 2011, Plaintiff filed his response. 

(ECF No. 9). 

II. STANDARD OF REVIEW

In deciding a motion under Rule 12(b)(6), the district court is “required to accept as true

all factual allegations in the complaint and draw all inferences in the facts alleged in the light most

favorable to the [Plaintiff].” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). “[A]

complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the Plaintiff’s “obligation to

provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and

a formulaic recitation of the elements of a cause of action will not do.” Id. To survive a motion to

dismiss, the complaint must state a plausible claim. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). 

Thus, assuming that the factual allegations in the complaint are true, those “[f]actual allegations must

be enough to raise a right to relief above a speculative level.” Bell Atl. Corp., 550 U.S. at 555.

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III. DISCUSSION

The Complaint is deficient for a number of reasons. Even granting Plaintiff substantial

leeway for his Pro Se status, the Complaint will be dismissed.

First, Plaintiff has failed to satisfythe pleading requirements ofFederal Rule of Procedure

8(1)(2), as discussed in Bell Atl. Corp. and Iqbal. Plaintiff has provided no factual basis in the single

page of his Complaint to state a plausible cause of action against Defendants. This Court must only

assume well pleaded factual allegations of a complaint to be true, and may disregard any legal

conclusions in the complaint. When the legal conclusions of the Complaint before this Court are

disregarded, nothing of substance remains that could raise the possibility of a right to relief above

a speculative level. Simply put, Plaintiff has stated no factual grounds that would entitle him to the

relief sought. 

Second, Plaintiff does not have standing to bring this lawsuit. It is well recognized that

absent a direct individual injury, a corporate shareholder or officer lacks standing to sue for an injury

to the corporation. Cent. JerseyFreightliner, Inc. v. Freightliner Corp., 987 F.Supp. 289, 301 (D.N.J.

1997) (citing Jones v. Niagara Frontier Transp. Auth., 836 F.2d 731, 736 (2d Cir.1987). Further, the

president and principal shareholder of a corporation cannot claim damages to the corporation as his

own. Borkowski v. Fraternal Order of Police, Philadelphia Lodge No. 5, 155 F.R.D. 105, 113

(E.D.Pa. 1994) (citing Jones, 836 F.2d at 736). The FranchiseAgreement at issue is between Dasoda

and Kiddie Academy. If any wrongs have occurred in this matter, the right to relief belongs to

Dasoda. Plaintiff, therefore, has no basis to bring this suit.

Third, the express provisions of the FranchiseAgreement require resolution of Plaintiff’s

claims by arbitration. Under the Federal Arbitration Act, (“FAA”), 9 U.S.C. §§ 1–16, if a party

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brings a claim in federal court that is within the scope of a binding arbitration agreement, another

party can move the court to compel arbitration and to stay the proceeding. 9 U.S.C. §§ 3, 4; see also

Thompson v. Nienaber, 239 F.Supp.2d 478, 482 (D.N.J. 2002). If all of the claims involved in the

action are arbitrable, a court may dismiss the federal action instead of staying it. See Smith v. The

Equitable, 209 F.3d 268, 272 (3d Cir.2000), abrogated on other grounds by Green Tree Fin.

Corp.-Alabama v. Randolph, 531 U.S. 79, 86 (2000). Paragraph 27.1 of the Franchise Agreement

clearly states that all disputes and claims relating to any provision of the Franchise Agreement shall

be settled by arbitration in Harford County, Maryland, in accordance with the FAA. (Ex. A to Decl.

of Craig R. Tractenberg; ECF No. 7). The Court finds that because each claim asserted by Plaintiff

is arbitrable, dismissal is warranted. 

Finally, pursuant to the express provisions of the Franchise Agreement, this is not the

appropriate forum for any claims that Plaintiff may have against Defendants. Paragraph 26.2 of the

Franchise Agreement expressly states that the proper venue for all lawsuits not subject to arbitration

is Harford County, Maryland. (Ex. A to Decl. of Craig R. Tractenberg). 28 U.S.C. § 1406

authorizes this Court to dismiss any case before it in which venue is improperly asserted, or in the

interests of justice, to transfer such case to the proper venue. Given the numerous deficiencies in

the Complaint, the interests of justice do not require transfer of this case.

IV. CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss is granted. 

 S/ Dennis M. Cavanaugh 

Dennis M. Cavanaugh, U.S.D.J.

Date: October 25 , 2011 

Orig.: Clerk

cc: All Counsel of Record

Hon. Joseph A. Dickson, U.S.M.J.

File 

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