Olwin Metal Fabrication LLC v. MultiCam Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

OLWIN METAL FABRICATION :

LLC, ‘

Plaintiff,

Vv.

MULTICAMN, INC.,

‘Case No. 3:22-CV-333-WHR-PBS

and JUDGE WALTER H. RICE

MULTICAM GREAT LAKES, INC.

D/B/A MULTICAM OHIO VALLEY

TECHNOLOGY CENTER,

Defendants.

DECISION AND ENTRY OVERRULING IN PART AND SUSTAINING IN

PART DEFENDANT MULTICAM, INC’S MOTION TO DISMISS

PLAINTIFF’S FIRST AMENDED COMPLAINT (DOC. #6); MOTION IS

OVERRULED AS TO COUNT | AND SUSTAINED AS TO COUNTS Il-

V; PLAINTIFF GIVEN LEAVE TO FILE AN AMENDED COMPLAINT

AS TO COUNTS II-V, WITHIN 21 DAYS FROM DATE OF FILING OF

THIS DECISION AND ENTRY, SUBJECT TO THE STRICTURES OF

FED. R. CIV. P. 11

Plaintiff, Olwin Metal Fabrication LLC (“Olwin”), filed suit against MultiCam,

Inc. (“MultiCam”), and MultiCam Great Lakes, Inc., doing business as MultiCam

Ohio Valley Technology Center (“Great Lakes”) (collectively “Defendants”),

asserting claims of breach of contract, nonacceptance, revocation of acceptance,

fraud, and unjust enrichment.’ MultiCam has filed a Motion to Dismiss Plaintiff's

Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(6).. Doc. #6. Olwin has filed

a Memorandum in Opposition to the motion. Doc. #8. Defendant MultiCam has

filed a Reply. Doc #9.

I. Background and Procedural History

On November 12, 2021, Olwin began discussions with one or both

Defendants regarding the purchase of an ARCOS Series Plasma Machine (the

“Machine”). Doc. #4 at PagelD #208. On November 17, 2021, Olwin received an

email from Brian Newhouse —an individual responsible for Ohio Valley Sales with a

“@multicamoh.com” email address and a “MultiCam Complete CNC Solutions”

signature graphic—that referenced previous contact with Olwin, a warranty, and a

series of tests for a cutting machine. /d. at PagelD #220. On November 18, 2021,

Olwin purchased the Machine and paid a 50% deposit, and then paid the remaining

50% on December 16, 2021. /d. at PagelD #209. The Machine was delivered on

December 20, 2021, and then from January 10 to January 18, 2022, a MultiCam

subcontractor installed the Machine and trained Olwin on its use. However,

according to the Complaint, jd. at PagelD #209, the Machine has never worked as

promised.

1 This Court’s jurisdiction is based on diversity of citizenship. 28 U.S.C. 81332. Olwin is an Ohio

company. MultiCam is headquartered in Texas, and Great Lakes is headquartered in Michigan.

As a part of the sale of the Machine, Olwin received a copy of The ARCOS

Bridge & Rail Plasma Agreement (“Agreement”). Doc. #4, PagelD #221-46. The

Agreement, which was endorsed—but not signed—by Brian Newhouse of Great

Lakes, was digitally signed as accepted by Derrick Olwin on November 18, 2021.

/d. at PagelD #243. The Agreement stated that complete installation would be

provided and guaranteed the Machine would be “fully functional and operating

properly at the time of installation.” /d. The Agreement also stated that all

quotations were subject to Terms and Conditions, /d., which were included at the

end of the Agreement, fd. at PagelD #245-—46, and under those Terms and

Conditions “[w]ritten acceptance of this Quotation by Purchaser accompanied by a

deposit accepted by Manufacturer [MultiCam Inc.] will constitute an agreement

binding on both parties.” /d. at PagelD #255. The Terms and Conditions further

stated that the Machine would not be shipped until full payment was received, and

MultiCam warranted that “the [Machine] will be free from defects in material and

workmanship for a period of 13 months from the date of shipment.” /d.

Il. Legal Standard

Federal Rule of Civil Procedure 8(a) provides that a complaint must contain

“a short and plain statement of the claim showing that the pleader is entitled to

relief.” The complaint must provide the defendant with “fair notice of what the

... Claim is and the grounds upon which it rests.” Bel/ Atlantic Corp. v. Twombly,

550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

Federal Rule of Civil Procedure 12(b)(6) allows a party to move for dismissal

of a complaint on the basis that it “fail[s] to state a claim upon which relief can be

granted.” The moving party bears the burden of showing that the opposing party

has failed to adequately state a claim for relief. DirecTV, Inc. v. Treesh, 487 F.3d

471, 476 (6th Cir. 2007) (citing Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir.

1991)). The purpose of a motion to dismiss under Rule 12(b)(6) “is to allow a

defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief

even if everything alleged in the complaint is true.” Mayer v. Mylod, 988 F.2d

635, 638 (6th Cir. 1993). In ruling on a 12(b)(6) motion, a court must “construe

the complaint in the light most favorable to the plaintiff, accept its allegations as

true, and draw all reasonable inferences in favor of the plaintiff.” Handy-Clay v.

City of Memphis, 695 F.3d 531, 538 (6th Cir. 2012) (quoting Treesh, 487 F.3d at

476).

Nevertheless, to survive a motion to dismiss under Rule 12(b)(6), the

complaint must contain “enough facts to state a claim to relief that is plausible on

its face.” Twombly, 550 U.S. at 570. Unless the facts alleged show that the

plaintiff's claim crosses “the line from conceivable to plausible, [the] complaint

must be dismissed.” /d. Although this standard does not require “detailed factual

allegations,” it does require more than “labels and conclusions” or “a formulaic

recitation of the elements of a cause of action.” /d. at 555. “Rule 8... does not

unlock the doors of discovery for a plaintiff armed with nothing more than

conclusions.” Ash/croft v. /qba/l, 556 U.S. 662, 678-79 (2009). Legal conclusions

“must be supported by factual allegations” that give rise to an inference that the

defendant is, in fact, liable for the misconduct alleged. /d. at 679.

In ruling on a motion to dismiss, the Court may consider “the Complaint and

any exhibits attached thereto, public records, items appearing in the record of the

case and exhibits attached to defendant's motion to dismiss so long as they are

referred to in the Complaint and are central to the claims contained therein.”

Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).

il. Analysis

MultiCam argues that Olwin’s Amended Complaint, as currently pled, must

be dismissed for all five counts against MultiCam for failing to either plead their

claim with sufficient particularity, plead distinct and actionable claims, or meet

heightened pleading requirements.

a. Count 1 - Breach of Contract

MultiCam contends that Olwin’s claim for breach of contract fails because it

does not allege the basic information necessary to show that it has a probable right

to relief, specifically which defendant was a party to the contract, which provision

was at issue, and how there was a breach. Doc. #6, PagelD #254-55.

For a breach of contract claim, “a plaintiff must show ‘the existence of a

contract, performance by the plaintiff, breach by the defendant, and damage or

loss to the plaintiff.'" Milavar v. Osborn, 738 N.E.2d 1271, 1281 (Ohio Ct. App.

2000) (quoting Doner v. Snapp, 649 N.E.2d 42, 44 (Ohio Ct. App. 1994). It is also

“well established” that a contract only binds “the parties to the contract and those

in privity with them,” and that suits for a breach of contract can be asserted “only

by the parties to the contract or those deriving rights from the contracting parties.”

Ohio Sav. Bank v. H. L. Vokes Co., 560 N.E.2d 1328, 1332 (1989) (emphasis

added).

Olwin’s Amended Complaint incorporates, by reference, the twenty-six (26)

page Agreement. Doc. #4, PagelD #209, 221-46. The first page of the Agreement

states that it was “Presented to: Derrick Olwin Olwin Metal Fabrication.” /d.,

PagelD #221. The second page of the Agreement states that MultiCam is a “global

supplier” with a “corporate office and manufacturing facility” in Dallas, Texas and

“over 50 technology centers across the globe” where a customer can “find a

location near [them] for local sales ... service, and support.” /d., PagelID #222. It

then lays out that Olwin’s local technology centers are in Grand Rapids, Michigan,

and Cincinnati, Ohio. /d., PagelD #223. The Agreement also lists an included

installation package, local and phone support packages, and a one-year parts and

labor warranty “subject to our Terms & Conditions,” id., PagelD #242, and then

provides a short summary list of the Agreement’s terms, which encompassed,

among other things, “50% due with order 50% [sic] due prior to machine

shipping” and free on board shipping from Dallas. /d., PagelD #243. The

Agreement concludes with a preprinted thanks from Brian Newhouse of Great

Lakes, /d., a generic textual disclaimer about the Agreement being subject to

“standard Terms & Conditions,” /d., a promise of complete installation, a guarantee

that the Machine “will be fully functional and operating properly at the time of

installation,” /d., and a short two page set of “TERMS AND CONDITIONS.” /d.,

PagelD #245-46.

The introduction of the Agreement’s own Terms and Conditions states

“[w]ritten acceptance of this Quotation by Purchaser accompanied by a deposit

accepted by Manufacturer will constitute an agreement binding on both parties.”

PagelD #155. That same paragraph defines “Manufacturer” as “MultiCam Inc.”

Also, the “Payment Terms,” /d., match those included earlier in the Agreement

regarding both a separate 50% down payment and a 50% payment prior to

shipping. /d., PagelD #153. In addition to the “Terms and Conditions” expressly

stating that the Agreement was between “MultiCam Inc.” and the Purchaser, the

bottom of both pages of the “Terms and Conditions” lists the name, address,

contact info, and website for MultiCam. /d., PagelD #155-56.

Construing the allegations in the Amended Complaint as true and drawing all

reasonable inferences in Olwin’s favor, the Court concludes that Olwin has stated

a plausible claim that MultiCam breached its contractual duty by failing to provide

Olwin with a fully functioning and properly operating MultiCam CNC Machine.

Olwin has shown, through its Complaint, the existence of a contract, namely the

Agreement attached to and incorporated with the Amended Complaint, and that a

term of said contract was the guarantee that the Machine would be “fully

functional and operating properly at the time of installation.” /d., PagelD #155.

Olwin claims MultiCam breached the contract by providing a machine that did not

work as promised, citing three technical benchmarks of performance, ultimately

causing it damages in the amount of the Machine’s total purchase price, plus

additional damages. /d., PagelD #119-20. This pleading covers the “relevant terms

of the ... agreement, how the agreement was breached, and how the breach

harmed [it].” See Derbabian v. Bank of America, N.A., 587 Fed. Appx. 949, 954

(6th Cir. 2014) (affirming the dismissal of a breach of contract claim for not

adequately pleading each element).

MultiCam contends that Olwin fails to specify which of the named

Defendants were a party to the purported contract. Doc. #6, PagelD #254, But, as

previously stated, the Agreement, which was incorporated by reference into the

Amended Complaint, expressly lays out in its Terms and Conditions that

acceptance of the quotation by payment of the quoted purchase price constituted

a contract between the Purchaser, Olwin, and the Manufacturer, MultiCam. See

Doc. #1, PagelD #155. Despite MultiCam’s contentions, Olwin’s use of the

collective “Defendants” in its Amended Complaint does not vitiate its claim that

MultiCam was a party to the Agreement, and that their breach of said Agreement

by delivering the non-conforming Machine caused Olwin damages. While the face

of the Agreement also appears to include Great Lakes as a party to the contract,

the face of the Amended Complaint has made sufficient factual allegations

regarding MultiCam being a party to the contract to bring it across “the line from

conceivable to plausible” that MultiCam is liable for breaching the Agreement. See

Twombly, 555 U.S. at 570, /qba/, 556 U.S. at 679.

Accordingly, as to Count I, the Court OVERRULES MultiCam’s Motion to

Dismiss Plaintiff’s First Amended Complaint.

b. Counts 2 and 3 - Non-acceptance and Revocation

MultiCam also contends that Olwin’s second and third claims for relief —non-

acceptance and revocation—should be dismissed as they are duplicative of the

breach of contract claim and are only “events which give rise to a claim for breach

of contract” rather than separate causes of action. Doc. #6, PagelD #255. In the

Amended Complaint, Doc. #1, PagelD#120-—21, Olwin cites Texas Business &

Commercial Code §§ 2.606 and 2.608 for its non-acceptance and revocation

claims, respectively. However, neither section of the Code provides a separate

cause of action but instead only defines each term’s legal meaning in the context

of the sale of goods.

In its Memorandum in Opposition, Doc. #8, PagelD #270, Olwin cites to a

separate section of the Code— 8 2.711 —for the premise that it “may recover

breach of contract remedies for delivery of non-conforming goods.” /d. (citing

Emerson Elec. Co. v. Am. Permanent Ware Co., 201 S.W.3d 301, 310 (Tx. App.

2006)). However, “the issue of [rejection or revocation i]s not an independent

theory of recovery[,]” but is instead a component of a breach of contract claim.

Emerson Elec. Co., 201 S.W.3d at 310. Olwin’s own arguments further support

this, by stating that the Amended Complaint alternatively alleged that it either did

not accept or revoked acceptance of the Machine “based on its non-conformity,”

and that “[t]hese allegations further support [Olwin’s] breach of contract claim[.]”

Id.

Accordingly, without restricting Olwin's ability to use either revocation or

non-acceptance as an alternative basis for arguing its breach of contract claim, the

Court SUSTAINS MultiCam’s Motion to Dismiss Plaintiff’s First Amended

Complaint as to Counts II-Ill.

c. Count 4 - Fraud

MultiCam alleges that Olwin’s claim of fraud fails for not meeting the

heightened pleading requirement laid out in Rule 9(b) of the Federal Rules of Civil

Procedure. Doc. #6, PagelD 253. MultiCam also contends that Olwin’‘s fraud claim

constitutes “group pleading’ [by] sweepingly assigning conduct to a group of

defendants without specifying which defendant committed what conduct.” /d.

(citing U.S. ex rel Blesdoe v. Cmty Health Sys., Inc., 342 F.3d 634, 643 (6th Cir.

2003)) (emphasis in original).

In its Amended Complaint, Doc. #4, PagelD #208-12, Olwin asserts that on

November 12, 2021, Olwin and MultiCam began discussions about Olwin

purchasing the Machine, /d., PagelD #208, and that Olwin received an email on

November 17, 2021, from MultiCam, “providing specific assurances as to the

Machine’s capabilities.” /d. The email in question was sent by Brian Newhouse, /d.,

PagelD # 220, whose signature block reflects a position involving “Ohio Valley

Sales,” a physical address in Cincinnati, Ohio, and an email address affiliating him

with “multicamoh.com.” /d. The Agreement, jd., PagelD #243, separately identifies

10

Brian Newhouse as an employee of Great Lakes in an unsigned acknowledgment

block; /d.; however, the Agreement was not signed by anyone other than Derrick

Olwin, who signed it digitally on November 18, 2021. /d. The Amended Complaint

further alleges that:

Defendants and their employees and/or agents acting within the course

and scope of their employment, and or within the actual or apparent

authority of their agency, made material representations as to the

capabilities of the Machine including, but not limited to, the

representations made in [the email] and [the Agreement.]

PagelD #211. Olwin then generally contends that those representations were

knowingly false or “made with reckless disregard of their truth or falsity,” and

were made intentionally to induce Olwin’s reliance in choosing to purchase the

Machine. /d.

Rule 9(b) of the Federal Rules of Civil Procedure requires that “a party must

state with particularity the circumstances constituting fraud,” however intent “may

be alleged generally.” Additionally, “[t]o satisfy Rule 9(b), a plaintiff's complaint

must (1) specify the statements that the plaintiff contends were fraudulent, (2)

identify the speaker, (3) state where and when the statements were made, and (4)

explain why the statements were fraudulent.” City of Taylor Gen. Employees Ret.

Sys. v. Astec Indus., 29 F.4th 802, 810 (6th Cir. 2022) (internal citations and

quotations omitted). In short, the complaint must lay out the “’who, what, when,

where, and how’ of the alleged fraud.” Sanderson v. HCA-The Healthcare Co., 447

F.3d 873, 877 (6th Cir. 2006) (quoting U.S. ex rel. Thompson v. Columbia/HCA

Healthcare Corp., 125 F.3d 899, 903 (5th Cir. 1997)).

11

Olwin’s Amended Complaint appears to address two specific statements

that were allegedly fraudulent: that the Machine was thoroughly tested to exact

cutting specifications, Doc. #4, PagelD #220, and that the Machine would be

“fully functional and operating properly at the time of installation.” /d., PagelD

#243. The Amended Complaint identifies the speaker of those statements as

“Defendants and their employees and/or agents,” jd., PagelD #211, states that the

statements were made on November 17 and 18, 2021, and contends that the

statements were fraudulent because “the Machine was not capable of performing

the ways in which Defendants specifically represented.” /d., PagelD #212.

The Court finds that Olwin has failed to plead the claim of fraud with

sufficient particularity under Rule 9(b). Olwin asserts that “Defendants and their

employees and/or agents” fraudulently misrepresented the Machine's capabilities to

induce Olwin to purchase it, but Olwin does not establish sufficient facts to

establish that an employer/employee or master/servant relationship existed

between either MultiCam and Great Lakes or MultiCam and Brian Newhouse. The

Amended Complaint recognizes MultiCam and Great Lakes as distinct corporations

from different states— Texas and Michigan, respectively — with different principal

places of business. Doc. #4, PagelD #208. No information is provided to indicate

what the legal relationship is between MultiCam and Great Lakes, such as whether

Great Lakes is a wholly or partially owned subsidiary of MultiCam, a “franchise” of

MultiCam, or a totally independent entity. Olwin attempts to refine its presentation

of the Defendants’ relationship in its Motion in Opposition, Doc. #8, PagelD #266-

12

67, but that attempt is unavailing, as Olwin’s argument that Defendants were

“acting as one entity as it relates to the purchase of the Machine” is not supported

by any facts.”

Accordingly, the Court SUSTAINS MultiCam’s Motion to Dismiss Plaintiff's

First Amended Complaint as to Count IV.

d. Count 5 — Unjust Enrichment

MultiCam’s final contention is that Olwin’s unjust enrichment claim fails on

both procedure and substance, Doc. #6, PagelD #257, because the pleading was

not in the alternative to the breach of contract claim, did not facially allege all the

elements of the unjust enrichment claim, and failed to give MultiCam adequate

notice of whether the claim involves itself or Great Lakes. /d.

“To state a claim for unjust enrichment in Ohio, Plaintiffs must plausibly

allege that (1) they conferred a benefit on the defendant; (2) the defendant had

knowledge of the benefit; and (3) the defendant retained the benefit under

circumstances where it would be unjust to do so without payment.” Duff v.

Centene Corp., 565 F.Supp. 3d 1004, 1028 (S.D. Ohio 2021) (citing Hambleton v.

R.G. Barry Corp., 465 N.E.2d 1298, 1302 (Ohio 1984)). Under federal law, “a

? Indeed, as discussed in Section |, supra at 2-3, Brian Newhouse—the only named individual in the

Complaint’s supporting documentation, might appear to have connections to MultiCam as a sales

representative, see Doc. #4, PagelD #220, while also being an employee of Great Lakes, /d. at

PagelD #243, but that is not sufficient to claim the Defendants are a single entity. Likewise, while

Olwin argues that MultiCam and Great Lakes are “collectively [known] as ‘MultiCam Complete CNC

Solutions,’” it does not support that claim with any facts beyond the similarities in the Defendants’

naming, website branding, see Doc. #4, PagelD ##215-19, and MultiCam’s self-description, /d.,

PagelD ##222-23, which is not a sufficient allegation that they are the same legal entity.

13

party may plead both a breach of contract claim and an unjust enrichment claim, in

the alternative, without negating the validity of either,” so long as there is a

dispute on either the existence of, or liability of a party under, a contract. /d. at

1029 (citing Ortega v. Wells Fargo Bank, N.A., No. 3:11CV01734, 2012 U.S.

Dist. LEXIS 11409, at *11 (N.D. Ohio Jan. 31, 2012)).

The Court finds that Olwin has failed to plausibly allege unjust enrichment

against MultiCam. In the Amended Complaint, Doc. #4, PagelD #212, Olwin

asserts that “Defendants have been unjustly enriched ... by failing to provide a

machine that was fully functional and operating ... while retaining the full purchase

price of the Machine.” Olwin also states that they “purchased the Machine from

Defendants on November 18, 2021, ... [and] put down [$111,652.00] on the

Machine,” and that on December 16, 2021, they “paid the remaining [balance] due

on the Machine, for a total purchase price of $223,304.00.” /d., PagelD #119. But

Olwin does not specify which of the Defendants the monies were sent to, nor

which of the Defendants delivered the Machine. See /d. (stating “the Machine was

delivered to Olwin’s place of business” without stating who made the delivery).

Olwin has alleged that they conferred a benefit, but they have not pleaded

sufficient facts for this Court to identify either upon whom the benefit was

conferred or that the recipient of that benefit had knowledge of the benefit. As laid

out in the Amended Complaint, the assertions regarding Olwin’s payments for the

Machine do not permit the Court to “infer more than the mere possibility” that

MultiCam knowingly received the benefit of Olwin’s payments. In addition, as

14

outlined supra in Section IIl{c), Olwin has also failed to plead enough facts to

establish that a legal relationship exists between MultiCam and Great Lakes (and

what that relationship was), thus enabling Olwin to claim either or both defendants

are jointly and severally liable for the actions or obligations of the other.

Accordingly, the Court SUSTAINS MultiCam’s Motion to Dismiss Plaintiff's

First Amended Complaint as to Count V.

IV. Conclusion

For the reasons set forth above, Defendant’s Motion to Dismiss, Doc. #6, is

overruled as to Count I, and, without restricting Olwin’s ability to use either

revocation or non-acceptance as an alternative basis for arguing its breach of

contract claim, sustained as to Counts II-V.

Plaintiff is given leave to file an amended complaint, as to Counts H-V,

subject to the strictures of Fed. R. Civ. P. 11, within 21 days from the date of

filing of this decision.

Date: September 27, 2023 (SodAe Fy Cee Q

WALTER H. RICE

UNITED STATES DISTRICT JUDGE

15