Monaco Industries, LLC v. Envoy Solutions, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

AT KNOXVILLE

MONACO INDUSTRIES, LLC, )

)

Plaintiff, )

)

v. ) No. 3:22-CV-459-JRG-DCP

)

FOMENTO ECONOMIC MEXICANO )

S.A.B. de C.V., d/b/a FEMSA, et al., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,

and the Order [Doc. 20] of referral by United States District Judge J. Ronnie Greer.1

Now before the Court is Defendants’ Consolidated Motions to Dismiss [Doc. 12]. Plaintiff

has responded in opposition [Doc. 22], and Defendants filed a reply [Doc. 23]. The motion is ripe

for adjudication. See E.D. Tenn. L.R. 7.1(a). For the reasons explained below, the Court

GRANTS IN PART AND DENIES IN PART Defendants’ motion [Doc. 12].

I. BACKGROUND

Plaintiff originally filed this case in the Chancery Court for Knox County, Tennessee, and

Defendants removed this action on December 22, 2022 [Doc. 1]. Plaintiff names the following

entities as Defendants: Fomento Economico Mexicano S.A.B. de C.V. d/b/a FEMSA (“FEMSA”),

Envoy Solutions, LLC (“Envoy”), Southeastern Paper Group, LLC (“Southeastern”), and Penn

1 The parties requested that the undersigned resolve this motion pursuant to Local Rule 7.5,

which provides that the parties “may consent to the final resolution and entry of judgment on the

dispositive motion by a magistrate judge.” E.D. Tenn. L.R. 7.5(a). Upon receiving the parties’

request, Judge Greer entered an Order, referring the motion to the undersigned “for final resolution

and entry of judgment” [Doc. 20].

Jersey Paper Company, LLC (“Penn Jersey”) [Doc. 1-1]. FEMSA is the parent company for

Envoy, and Envoy is the parent company of Southeastern and Penn Jersey [Id. ¶¶ 2–3].2 Plaintiff

manufacturers, purchases, and sells paper, paper products, and supplies throughout Tennessee and

the United States, and Defendants are in the business of distributing supplies [Id. ¶¶ 10, 12, and

13].3

According to the Complaint, Plaintiff and “Defendant Southeastern enjoyed a long-

standing business relationship that spanned nearly fifteen (15) years, beginning in 2008 and

continuing through 2022” [Id. ¶ 14]. In their course of dealing, Southeastern sent purchase orders

to Plaintiff, and Plaintiff fulfilled those orders [Id. ¶ 17]. Envoy acquired Southeastern in late 2020

or early 2021, and despite the acquisition, there was no disruption in the parties’ business

relationship [Id. ¶ 18].

On March 15, 2022, Douglas Bobar (“Bobar”), previously the Director of Purchasing for

Southeastern and now for Envoy, emailed Richard Jansen (“Jansen”), Plaintiff’s president,

explaining that FEMSA had acquired Envoy, Southeastern, and others in order to create a “national

distribution platform” [Id. ¶ 21 (citing Doc. 1-1 p. 46)].4 Bobar stated, “I have been tasked to

engage suppliers and come up with an Envoy program for all members and drive sales to fewer

partnered suppliers. This is my category so I will be asking Monaco for a new program” [Id.

(citing Doc. 1-1 p. 46)]. He also asked if Plaintiff extended the program from 4/30/2021 to go

2 Envoy acquired Southeastern in late 2020 or early 2021 and acquired Penn Jersey in

November 2021 [Doc. 1-1 ¶¶ 18, 19].

3 Plaintiff alleges that “FEMSA is a multi-faceted corporation with ownership interests in

entities such as The Coca-Cola Company and Heinekin . . .” [Doc. 1-1 ¶ 11].

4 Along with other exhibits, Plaintiff attached various email exchanges to its Complaint [See

Doc. 1-1 pp. 45–131]. In summarizing the facts, the Court has provided citations to the Complaint

and the emails, although the undersigned has relied on the emails when directly quoting therefrom.

In addition, the Court has not corrected any grammatical errors in the emails.

through 4/30/2022, and if so, to provide a copy of it [Id. ¶ 22 (citing Doc. 1-1 p. 46)]. He

concluded, “I have a really nice value proposition to share with you” [Id. (Doc. 1-1 p. 46)]. Jansen

sent Bobar a copy of the requested program the same day and noted his availability to discuss the

other matters [Id. ¶ 23 (citing Doc. 1-1 p. 46)].

On March 28, 2022, Jansen and Bobar confirmed a meeting [Id. ¶ 24 (citing Doc. 1-1 p.

49)]. Bobar stated that he would review FEMSA’s strategy to establish a national distributors

platform and noted the “need to create one Envoy program and create true value for our partnered

vendors” [Id. (citing Doc. 1-1 p. 49)]. According to the Complaint, during the meeting, via

Microsoft Teams, Jansen and Bobar “discussed the acquisition of Defendants Southeastern and

Penn Jersey by Defendant FEMSA” [Id. ¶ 25]. In addition, during the meeting, “Bobar stated that

he wanted Plaintiff Monaco to become the vendor for Defendant Envoy and extolled the

possibilities of a growing opportunity for Plaintiff” [Id.].

On April 19, 2022, Bobar sent an email to Janson “explaining Defendants’ intent with

respect to the creation of one pricing program for all of Defendants’ members, including Defendant

Penn Jersey and Defendant Southeastern” [Id.]. Bobar wrote:

Our objective is to put together a 2022 program for all of Envoy

Solutions members. Please keep the inclusion open as we acquire

and add new members. Currently the volume is only from Penn

Jersey Paper and Southeastern Paper Group. We are looking for two

things: One program for all members and one price list for all

members. Please be aggressive as you can as the are several

suppliers involved in this opportunity. The volume attached is

annual for 2021. We can move this business and we will move this

business to the supplier that wants to partner with Envoy and growth

their business together. We will not support any other non partnered

suppliers unless it is contracted business that we cannot move. I did

include one ribbon on the summary. If you can provide that please

match it up with your offering and add it to the price list and

program.

* * *

I will be your contact for all of Envoy. No getting redirected to other

purchasing folks. We will make the decision and support that

partnered vendor. We are inpowered to make these decisions and

implement the change. I am excited about the relationship and the

opportunity to really focus on this category and grow together.

Please right the program to Tom Furia III.

[Doc. 1-1 p. 50].

Plaintiff alleges that “beginning in March 2022 and continuing through July 2022, in

addition to its usual purchase orders received from representatives of Defendant Southeastern, [it]

also received purchase orders from representatives of Defendant Envoy” [Doc. 1-1 ¶ 26]. While

the parties’ continued their business relationships, Plaintiff alleges that “Jansen and . . . Bobar

worked together to create a program for Defendants that would expand the business from

Defendant Southeastern to Defendants Envoy and Penn Jersey, ultimately benefitting Defendant

FEMSA” [Id. ¶ 27].

On April 27, 2022, Jansen emailed Bobar, “telling him that Plaintiff was working on

Defendant Penn Jersey’s portion of the new program solicited by Defendants and asking for

additional information and specifications regarding Defendant Penn Jersey’s needs as to its register

roll/thermal roll program” [Id. ¶ 28 (citing Doc. 1-1 p. 55)]. Bobar forwarded this email to Thomas

Furia, III (“Furia”), the Director of Supply Chain Management at Penn Jersey [Id. (citing Doc. 1-

1 p. 54)]. Furia responded by answering Jansen’s questions [Id. ¶ 29 (citing Doc. 1-1 p. 55)]. On

May 2, 2022, Bobar sent Jansen an email, stating that he was “[r]eally looking for one program for

all of Envoy and one price list for all of Envoy. You can quote us LTL pricing as well as TL and

the location will decide their purchasing minimum and pay the price accordingly. So one LTL and

TL price for all, one Envoy price list. You have several brackets if needed.” [Id. ¶ 30 (citing Doc.

1-1 p. 53)].

On May 4, 2022, Jansen sent Bobar an email “with an attachment containing a proposed

program for Defendants” [Id. ¶ 31 (citing Doc. 1-1 p. 58)]. Jansen wrote, “The program consists

of the monthly 5% merchandise credit and 2% 10-day prompt payment terms” [Id. (citing Doc. 1-

1 p. 58)]. He also noted that while Bobar requested a single price, “the freight to Defendant Penn

Jersey would have affected this component for location maintained by Defendant Southeastern”

[Id. ¶ 32 (citing Doc. 1-1 p. 58)]. Following this email, Jansen and Bobar continued to exchange

emails wherein Jansen checked the progress of Bobar’s review, Bobar asked pricing questions,

and Plaintiff updated the spreadsheets for Defendants’ pricing as requested [Id. ¶¶ 32–33].

Throughout May 2022 to July 2022, the parties continued to engage in discussions

regarding price adjustments [Id. ¶¶ 34–39]. On July 19, 2022, Bobar emailed Jansen and Stacey

Anderson (“Anderson”), Plaintiff’s Chief Financial Officer [see Doc. 1-1 p. 75], as follows:

We are prepared to award the register roll business to Monaco for

all of Envoy Solutions. I just need a few things in order to get that

done.

***

We are prepared to move forward with Monaco. My suggestion to

my boss Tom Furia III. He is ready to move if you could address

the issues in the prior paragraph. Please let me know this week if

you can. We can then speak about next steps and the timing of the

conversion. We will need to move Iconex business in both the North

and the South. His only other concern was your support of the PJP

business to provide uninterrupted service to the best of your ability.

[Id. ¶ 40 (citing Doc. 1-1 p. 108)]. A few days later, Jansen sent a letter to Bobar, dated July 21,

2022, as follows:

Monaco is pleased to offer this program to Envoy Solutions

members from August 1, 2022 to July 31, 2023.

Monaco’s program for Envoy Solution includes a 6% rebate in the

form of a merchandise credit issued at the end of each month. In

addition, payment terms are 2% 10; net 30 days. The program will

be in effect from August 1, 2022 to July 31, 2023.

[Id. ¶ 41 (citing Doc. 1-1 p. 112)]. On July 25, 2022, Bobar emailed Jansen that he was “checking

on the critical item pricing adjustment[,]”explaining that certain prices “will close the deal and

[they] can move forward” [Id. ¶ 42 (citing Doc. 1-1 p. 116)]. Bobar concluded by requesting one

price revision and noted, “Please let me know if you can make this adjustment and I will commit

to giving you all the business today” [Id. (citing Doc. 1-1 p. 116)]. Jansen responded the same

day, “[L]ets move forward with your proposal” [Id. ¶ 43 (citing Doc. 1-1 p. 116)]. And a few

minutes later, Bobar responded, “I think this is going to be a great relationship. I think we will be

committed to giving this category attention to really growing the business” [Id. ¶ 44 (citing Doc.

1-1 p. 115)]. He also requested a revised price list, stated his availability to meet “to discuss

moving forward and placing orders[,]” and noted his excitement “to get things going” [Id. (citing

Doc. 1-1 p. 115)].

The parties continued to engage in back-and-forth emails regarding adjustments to the

pricing columns [Id. ¶ 45]. On July 26, 2022, Bobar asked Anderson via email a pricing question

and noted that Southeastern was going to move its Iconex volume and place orders next week, that

Penn Jersey could not commit until “all is set up and ready to go[,]” and that Bobar was going to

announce “this” to the sales teams on August 1, 2022 [Id. ¶ 46 (citing Doc. 1.1 p. 124)]. Bobar

stated, “We are very excited to move forward and really partner with [Plaintiff]” [Id. (citing Doc.

1.1 p. 124)]. Thereafter, the parties continued to engage in back-in-forth email exchanges

regarding updating final quotes, pricing, anticipated date of orders, sourcing of particular products,

Plaintiff’s “spec sheets” so that Bobar could set up shipping information in Defendants’ system,

and requests for Plaintiff’s certificate of insurance and W-9 [Id. ¶¶ 47–51, 54]. As a result of these

email and information exchanges, Plaintiff added Penn Jersey to its insurance [Id. ¶ 52]. During

August and September 2022, Southeastern sent purchase orders to Plaintiff “based on the new

pricing program created for the expanded business for Defendant Envoy and other Defendants”

[Id. ¶ 57]. According to Plaintiff, “Defendants paid those invoices in accordance with the new

pricing as agreed upon by the parties” [Id.]. The parties also engaged in email exchanges regarding

detailed shipping information and product codes [Id. ¶¶ 59–61].

The Complaint further alleges:

On or about August 12, 2022, Plaintiff’s Jansen met virtually with

Defendants’ Furia and Bobar via Microsoft Teams. The purpose of

the meeting was for Defendants’ Furia to meet with Plaintiff’s

Jansen face-to-face to discuss Plaintiff Monaco. During that

meeting, Defendants’ Furia asked Plaintiff’s Jansen how Plaintiff

could beat Defendants’ previous supplier’s prices. Plaintiff’s Jansen

told him that he, on behalf of Plaintiff, was making an investment

and looked forward to growing the business. Defendants’ Furia also

asked how Plaintiff would handle Defendants’ expansion to other

locations and Plaintiff’s Jansen replied that Plaintiff already

serviced (and continues to service) accounts nationally and had no

service issues. Defendants’ Furia ended the call by stating that

Plaintiff’s program for servicing Defendants would move forward,

that Defendant Southeastern’s orders would continue, and that

Plaintiff could anticipate orders from Defendant Penn Jersey

beginning in September 2022.

[Id. ¶ 62]. From August through the beginning of September 2022, Plaintiff received nearly

$75,000 net worth from purchase orders for Southeastern [Id. ¶ 65]. In reliance on the parties’

agreement and Defendants’ representation, Plaintiff purchased a 3-ply paper product in the amount

of $11,300 in anticipation that Penn Jersey would begin its orders in September 2022 [Id. ¶ 71].

On September 13, 2022, however, Bobar called Plaintiff and told him that Furia made the decision

that Iconex would be Defendants’ exclusive supplier instead of Plaintiff [Id. ¶ 69]. Plaintiff

alleges, “Based on Defendants’ representations and Plaintiff’s longstanding relationship and

course of dealing with Defendant Southeastern, Plaintiff’s expectation was that the parties’

agreement had established a ten year or more relationship for the Plaintiff to be the Defendants’

sole supplier” [Id. ¶ 73].

Based on the above allegations, Plaintiff alleges breach of contract, promissory fraud,

intentional misrepresentation, and promissory estoppel [Id. ¶¶ 74–95]. Defendants now move to

dismiss the Complaint in its entirety.

II. STANDARD OF REVIEW

Defendants filed their motion pursuant to Rules 12(b)(2) for lack of personal jurisdiction

over FEMSA and 12(b)(6) for failure to state a claim against FEMSA as well as the other

Defendants. With respect to the former, “the plaintiff bears the burden of establishing the existence

of personal jurisdiction.” G.C. ex rel. Conner v. Disney Destinations, LLC, No. 3:12-CV-54, 2012

WL 1205637, at *1 (E.D. Tenn. Apr. 11, 2012) (citing Air Prods. & Controls, Inc. v. Safetech Int’l,

Inc., 503 F.3d 544, 549 (6th Cir. 2007)). The Court can determine the issue on the parties’

submissions or allow limited discovery and proceed with an evidentiary hearing. Id. (citation

omitted). When the Court relies on the parties’ submissions, as opposed to holding an evidentiary

hearing, “the plaintiff need only make a prima facie showing of jurisdiction.” Id. (quoting Indah

v. SEC, 661 F.3d 914, 920 (6th Cir. 2011)). In this context, the Sixth Circuit Court of Appeals has

characterized the plaintiff’s burden as “relatively slight[],” Air Prods., 503 F.3d at 536 (citation

omitted), and “can be done merely through the complaint.” Malone v. Stanley Black & Decker,

Inc., 965 F.3d 499, 504 (6th Cir. 2020) (citation omitted). “In that context, the court reviews the

pleadings and other documentary evidence in the light most favorable to the plaintiff, without

considering the defendant’s controverting assertions.” Taco Mamacita, LLC v. Wilco Holdings,

LLC, No. 1:21-CV-62, 2022 WL 16542580, at *3 (E.D. Tenn. Oct. 29, 2022) (citation omitted),

appeal dismissed, No. 22-6039, 2023 WL 2392871 (6th Cir. Jan. 27, 2023).

If the plaintiff makes a prima facie case, then the burden “shifts to the defendant, whose

motion to dismiss must be properly supported with evidence.” Malone, 965 F.3d at 504 (citation

omitted). “Once the defendant has met its burden, it returns to the plaintiff, who may no longer

‘stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the

court has jurisdiction.’” Id. (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.

1991)).

On a Rule 12(b)(6) motion, the Court considers not whether the plaintiff will ultimately

prevail, but whether the facts permit the court to infer “more than the mere possibility of

misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). For purposes of this determination, the

Court construes the complaint in the light most favorable to the plaintiff and assumes the veracity

of all well-pleaded factual allegations in the complaint. Thurman v. Pfizer, Inc., 484 F.3d 855,

859 (6th Cir. 2007). This assumption of veracity, however, does not extend to bare assertions of

legal conclusions, Iqbal, 556 U.S. at 679, nor is the Court “bound to accept as true a legal

conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986).

After sorting the factual allegations from the legal conclusions, the Court next considers

whether the factual allegations, if true, would support a claim entitling the plaintiff to relief.

Thurman, 484 F.3d at 859. This factual matter must “state a claim to relief that is plausible on its

face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plausibility “is not akin to a

‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

III. ANALYSIS

Defendants argue that the Complaint suffers from several defects. First, Defendants assert

that FEMSA should be dismissed under Rule 12(b)(2) because personal jurisdiction does not exist

in this case. Second, Defendants assert that the claims against FEMSA fail under Rule 12(b)(6)

because it did not engage in any of the conduct that forms the basis of the Complaint. Third,

Defendants assert that Plaintiff has not adequately pleaded a breach of contract claim against them

because its own Complaint shows that there was no writing establishing the existence of any ten-

year sole supplier agreement. Fourth, in violation of Rule 9(b), Defendants argue that Plaintiff has

not pleaded any false or misleading statements regarding past or present facts or with sufficient

particularity to support its claims for intentional representation and promissory fraud. Fifth,

Defendants argue that Plaintiff has not alleged with particularity any concrete promise on which it

reasonably relied in support of its promissory estoppel claim.

For the reasons explained below, the Court finds that it does not have jurisdiction over

FEMSA and therefore it will be dismissed from this lawsuit. The Court further finds that Plaintiff

has not adequately pleaded its breach of contract claim or its claim for intentional

misrepresentation, and those claims will also be dismissed. The Court will allow Plaintiff’s claims

for promissory fraud and promissory estoppel to proceed against the remaining Defendants.

A. Claims Against FEMSA

As mentioned above, Defendants argue that personal jurisdiction does not exist against

FEMSA. Defendants assert that “FEMSA is incorporated and has its principal place of business

in Mexico” [Doc. 13 p. 7]. Defendants conclude that general jurisdiction does not exist. In

addition, Defendants argue that FEMSA is not subject to specific jurisdiction in this case.

According to Defendants, simply because FEMSA is a parent company does not mean it

purposefully availed itself to Tennessee. Defendants further argue that “Tennessee and Sixth

Circuit law is clear that parent corporations are not subject to specific jurisdiction based solely on

the conduct of their subsidiaries” [Id. at 8 (citations omitted)]. Defendants argue that FEMSA is

not the alter ego of the other Defendants and that the “only allegation to support its alter ego claim

is . . . limited to bare and conclusory group pleading” [Id. at 9]. But “[e]ven if [Plaintiff] had

attempted to allege facts supporting its alter ego claim,” Defendants contend that “it would not

have been able to do so in good faith, because FEMSA and Envoy are indeed separate entities that

operate in accordance with appropriate corporate practices” [Id.]. In support of Defendants’

assertion, they filed the Declaration of Paul Ferracane, the Vice President of Category

Management at Envoy [Doc. 13-1]. To the extent the Court finds personal jurisdiction exists,

Defendants argue that Plaintiff fails to state a claim upon which relief can be granted against

FEMSA.

Plaintiff responds that contrary to Defendants’ argument, the “Complaint adequately

makes claims against FEMSA and its involvement in the conduct of all Defendants relative to the

negotiations with [it]” [Doc. 22-1 p. 7]. Referencing an email on March 15, 2022, Plaintiff argues

that FEMSA was implicated when Bobar stated that it had acquired Envoy and Southeastern in

order to create “a national platform.” [Id. (citation omitted)]. Later, according to Plaintiff, Bobar

indicated “on March 28, 2022, that he would be reviewing FEMSA’s strategy to establish a

national distribution platform and the FEMSA acquisition was further discussed between Bobar

and Jansen during their Microsoft Teams meeting” [Id. (citation omitted)]. Plaintiff concludes that

“the entirety of the negotiations and resulting contract between the parties was created pursuant to

FEMSA’s influence, strategy[,] and goals as the overarching owner of all other Defendants and

inured to FEMSA’s benefits” and therefore, “FEMSA played an active role in the wrongdoing

against [it], is subject to this Court’s jurisdiction, and should not be dismissed as a Defendant in

this cause” [Id.].

Defendants reply that Plaintiff cannot rely on its allegations in the Complaint to contest

Ferracane’s Declaration and that Bobar’s reference to FEMSA does not subject it to the Court’s

jurisdiction [Doc. 23 pp. 2–5].

The Court finds that it does not have personal jurisdiction over FEMSA. First, Plaintiff

does not contend that the Court has general personal jurisdiction [See id. at 2 n.2]. FEMSA is

incorporated in Mexico, which is also its principal place of business, and therefore, the Court

concludes that general personal jurisdiction does not exist. See Dochnal v. Thomson Reuters

Corp., No. 2:18-CV-00044, 2018 WL 5045205, at *3 (E.D. Tenn. Oct. 17, 2018) (finding no

general jurisdiction over a parent company incorporated in Ontario, Canada with its principal place

of business in Toronto, Canada).

But the inquiry does not stop there. “Specific jurisdiction allows a defendant to be sued in

the forum state where the issues of the suit derive from or are connected to the contacts that

establish jurisdiction.” Id. In order to exercise specific jurisdiction over a defendant, it must (1)

“purposefully avail itself of the privilege of acting in the forum state or causing a consequence in

the forum state[,]” (2) “the cause of action must arise from the defendant’s activities” in the forum

state, and (3) the defendant’s acts or consequences thereof “must have a substantial connection

with the forum state to make the exercise of jurisdiction over defendant reasonable.” Id. (citing S.

Machine Co. v. Mohasco Indus. Inc., 401 F.2d 374, 381 (6th Cir. 1968)). All three prongs must

be satisfied to exercise personal jurisdiction. Id. (citation omitted).

Plaintiff contends that jurisdiction exists because Bobar referenced in two emails that

FEMSA’s goal was to create a national distribution platform that benefitted Plaintiff. But the

Court finds Bobar’s references are not sufficient to establish specific jurisdiction over FEMSA.

Plaintiff claims that Bobar was “acting as Defendants’ duly authorized agent,” [Doc. 22-1 p. 7],

but there are no facts in the Complaint to support that Bobar was the agent for FEMSA. See Bird

v. Delacruz, No. 04-CV-661, 2005 WL 1625303, at *4 (S.D. Ohio July 6, 2005) (“A number of

federal district courts have held a complaint relying on agency must plead facts which, if proved,

could establish the existence of an agency relationship. It is insufficient to merely plead the legal

conclusions of agency.” (cleaned up) (collecting cases)).

And here, Defendants submitted Ferracane’s Declaration, which states that Bobar is the

Director of Purchasing for Southeastern and is not FEMSA’s employee [Doc. 13-1 ¶ 21]. Further,

FEMSA is not any other Defendants’ direct, sole owner: Envoy owns Penn Jersey and

Southeastern, and Emprex International LLC (FEMSA’s subsidiary) owns Envoy [Doc. 13-1 ¶¶

7–130]. Plaintiff has not rebutted this evidence. See Theunissen v. Matthews, 935 F.2d 1454, 1458

(6th Cir. 1991) (“In the face of a properly supported motion for dismissal, the plaintiff may not

stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the

court has jurisdiction.” (citation omitted)).

According to Defendants’ unrebutted evidence, FEMSA is a Mexican holding company

[see Doc. 13-1 ¶ 10], and it is not subject to jurisdiction based solely on the conduct of its

subsidiaries. See Taco Mamacita, LLC, 2022 WL 16542580, at *9 (finding parent company did

not purposefully avail itself of acting in Tennessee where the alleged Tennessee contacts were

taken by the company’s subsidiary); Brown v. Quince Nursing & Rehab. Ctr., LLC, No. 2:18-CV-

2740, 2020 WL 4873670, at *7 (W.D. Tenn. Aug. 19, 2020) (“Deriving substantial revenue from

a subsidiary that is subject to the jurisdiction of the court in the forum state, alone, is not enough

for a court to have jurisdiction over that subsidiary’s parent company.” (citation omitted)); Univ.

of S. v. S. Univ., LLC, No. 4:09-CV-71, 2009 WL 10675089, at *3 (E.D. Tenn. Nov. 20, 2009)

(“[T]he personal jurisdiction of a subsidiary does not lead to automatic personal jurisdiction of a

parent corporation unless there is evidence that the parent acts as an alter ego of the subsidiary.”).

And as set forth in Ferracane’s Declaration, FEMSA operates separately from its subsidiaries [Doc.

13-1 ¶¶ 16–20]. The Court therefore concludes that it does not have jurisdiction over FEMSA.5

B. Breach of Contract Claim

Defendants assert that Plaintiff’s breach of contract claim fails because no one wrote that

the agreement was to be a sole supplier agreement and that Plaintiff’s “expectation that the alleged

agreement would last for ten years has no basis in any statement, promise, or writing made by any

individual or party to the Complaint” [Doc. 13 p. 11 (internal quotation marks omitted)]. First,

Defendants contend that Plaintiff “makes no attempt to show that it has a written agreement to be

FEMSA’s, Envoy’s, Southeastern’s, or Penn Jersey’s ‘sole supplier’ of paper goods—let alone for

a ten-year period” [Id. at 12 (emphasis omitted)]. Citing to Tennessee’s Uniform Commercial

Code (“UCC”), Tenn. Code Ann. § 47-2-201, Defendants state that Plaintiff cannot enforce its

purported ten-year, sole supplier agreement. Acknowledging that “the parties exchanged many

emails negotiating price[,]” Defendants argue that Plaintiff “cannot point to any signed writing

that contains the alleged quantity: all of the Defendants’ requirements for paper goods for ten

years” [Id. at 13 (emphasis omitted)]. According to Defendants, this is fatal to Plaintiff’s claim

because it cannot satisfy the UCC’s Statute of Frauds.

Second, Defendants state that the contract did not satisfy the parties’ condition of

acceptance—namely, because Furia never signed a written agreement. At the beginning of

5 Defendants also moved to dismiss FEMSA because Plaintiff failed to state a claim of relief

against it, arguing that “FEMSA made no statements, sent no emails, engaged in no conversations,

partook in no negotiations, and made no promises. Not one individual named in the complaint is

a FEMSA employee” and “FEMSA’s logo appears nowhere in the exhibits” [Doc. 13 p. 11].

Relying on Bobar’s references to FEMSA and its alleged goals, Plaintiff asserts that it has stated

a claim against FEMSA [Doc. 22-1 p. 7]. Although Plaintiff concludes that “FEMSA played an

active role in the wrongdoing against [it,]” [see id.] there are no allegations in the Complaint setting

forth FEMSA’s wrongdoing. Thus, even if the Court had jurisdiction over FEMSA, Plaintiff has

not stated a claim against it. See Fed. R. Civ. P. 12(b)(6).

negotiations, according to Defendants, Bobar told Plaintiff to write the program to Furia, Bobar’s

boss, and that Furia would sign the program. Defendants argue, “Unambiguously, Bobar set out

the terms for acceptance (a signed agreement with Furia), and Furia never signed a ten-year

exclusivity agreement” [Id. at 16].

Third, Defendants contend that Plaintiff cannot rely on its purchase orders from

Southeastern as evidence of an “unwritten exclusivity agreement with all of the Defendants” [Id.

at 17]. Relying on the UCC, Defendants submit that “partial performance cannot remedy Statute

of Frauds deficiencies beyond the goods delivered and paid for” [Id. (citation omitted)].

Defendants add that “the alleged oral statements and emails that occurred before and after

Southeastern issued the purchase orders are not incorporated into the orders themselves, by

operation of the UCC’s parol evidence rule” [Id. (emphasis and citations omitted)].

Plaintiff responds that its “Complaint more than sufficiently satisfies the requirement to

state a claim for breach of contract against the Defendants that is plausible on its face” [Doc. 22-1

p. 8)]. Agreeing that this issue is governed under Article 2 of Tennessee’s UCC, Tenn. Code Ann.

§ 47-2-101 et seq., Plaintiff states that Tenn. Code Ann. § 47-2-207(1) “expands formation of

contracts for the sale of goods beyond a fully integrated written document” [Doc. 22-1 p. 9]. “In

cases such as this one,” Plaintiff argues, “where there is not a fully integrated written agreement

although there is an agreed-upon pricing list and a course of conduct demonstrating an agreement,

Tennessee law incorporates the UCC gap-filing provisions . . .” [Id. at 10 (citation omitted)].

Plaintiff states that dismissing this case because there is not a ‘fully-integrated’ document is

inappropriate” [Id.]. Plaintiff responds that “at no time did [it] plead that there was a ten-year term

contract and the Complaint should not be dismissed on that basis as Defendants suggest” [Id. at

13]. Instead, Plaintiff states that it pleaded its expectation that the parties’ relationship would last

ten or more years [Id.]. Plaintiff outlines the elements of a breach of contract claim and cites to

allegations, which it argues, supports each element [Id. at 11–15].

Defendants reply that Plaintiff cannot rely on Southeastern’s purchase orders to establish

that “all Defendants and [Plaintiff] struck the sole supplier agreement” [Doc. 23 p. 6 (emphasis

omitted)]. Further, Defendants state that the statutes that Plaintiff relies on are inapplicable.

Defendants maintain that the UCC’s Statute of Frauds requires a written agreement. Because the

parties did not sign an agreement for a sole supplier contract, they did not satisfy the condition of

acceptance. Further, Defendants contend that Plaintiff fails to explain how the parties’

communications establish a sole supplier agreement.

Count I of the Complaint alleges that Defendants breached the parties’ contract [Doc. 1-1

¶¶ 74–84]. Paragraph 76 alleges, “The agreement was supported by adequate consideration and

relied on promises in lieu of consideration, including, but not limited to, Plaintiff’s purchasing of

product to service Defendants’ needs and Defendants’ promise to Plaintiff that Plaintiff would be

the sole supplier for Defendants” [Id. ¶ 76]. “Under Tennessee law, a plaintiff alleging breach of

contract must prove (1) the existence of a contract, (2) breach of the contract, and (3) damages

which flow from the breach.” Carbon Processing & Reclamation, LLC v. Valero Mktg. & Supply

Co., 823 F. Supp. 2d 786, 803 (W.D. Tenn. 2011) (citing Life Care Ctrs. of Am., Inc. v. Charles

Town Assocs. Ltd. P’ship, 79 F.3d 496, 514 (6th Cir. 1996)). At the heart of the parties’ dispute

is whether Plaintiff plausibly alleged the existence of a contract.

The parties acknowledge that Tennessee’s UCC applies. Pursuant to Tennessee Code

Annotated § 47-2-201(1):

Except as otherwise provided in this section, a contract for sale of

goods for the price of five hundred dollars ($500) or more is not

enforceable by way of action or defense unless there is some writing

or record sufficient to indicate that a contract for sale has been made

between the parties and signed by the party against whom

enforcement is sought or by his authorized agent or broker. A

writing or record is not insufficient because it omits or incorrectly

states a term agreed upon but the contract is not enforceable under

this paragraph beyond the quantity of goods shown in such writing

or record.

Tenn. Code Ann. § 47-2-201(1). The comment to the statute explains that not all the material

terms are required to be in the written agreement. Tenn. Code Ann. § 47-2-201(1) cmt. 1. But

there are “three definite and invariable requirements[,]” including (1) “it must evidence a contract

for the sale of goods;” (2) “it must be ‘signed,’ a word which includes any authentication which

identifies the party to be charged;” and (3) “it must specify a quantity.” Tenn. Code Ann. § 47-2-

201(1) cmt. 1; Cackowski v. Drake, No. E202200700COAR3CV, 2023 WL 155124, at *6 (Tenn.

Ct. App. Jan. 11, 2023) (“The ‘three definite and invariable requirements’ of this subsection are

that the memorandum in question must evidence a contract for the sale of goods, must be signed,

and must specify a quantity.” (citation omitted)). “[T]he purpose of the UCC’s statute of frauds

[is] ‘to ensure that the parties did in fact have an agreement.’” W. Silver Recycling, Inc. v.

ProTrade Steel Co., LTD., 476 F. Supp. 3d 667, 679, n.10 (M.D. Tenn. 2020) (quoting

Eberspaecher N. Am., Inc. v. Nelson Glob. Prod., Inc., No. 12-11045, 2012 WL 4356781, at *5

(E.D. Mich. Sept. 23, 2012)).

Plaintiff admits that there is not a fully integrated written agreement [see Doc. 22-1 p. 10

(“In cases such as this one, where there is not a fully integrated written agreement . . .”)]. But a

fully integrated written agreement is not necessarily required. “[T]he statute of frauds need not be

satisfied by a single writing; multiple writings collectively can do the job.” W. Silver Recycling,

Inc., 476 F. Supp. 3d at 679 n.10; see also Garland v. Ford Motor Co., No. 2:12-00121, 2013 WL

3937017, at *3 (M.D. Tenn. July 30, 2013) (“[T]to satisfy the statute of frauds, a party may rely

on multiple documents evidencing the same transaction, provided that the writings on their face

relate to one another.”) (quoting Oliver v. Upton, No. 01A01-9705-CH-00197, 1998 WL 151388

at *3 (Tenn. Ct. App. April 3, 1998)). And these multiple writings do “not need to be formal or

sophisticated documents.” W. Silver Recycling, Inc., 476 F. Supp. 3d at 679 n.10 (citing Waddle

v. Elrod, 367 S.W.3d 217, 222 (Tenn. 2012) (finding that the parties’ various emails satisfied the

statute of frauds) and CALA Diamonds, LLC v. HRA Grp. Holdings, No. 17-CV-1136, 2017 WL

4222886, at *12 (E.D. Pa. Sept. 22, 2017) (holding that “the invoices, emails, shipping and

promotional materials which are alleged to have been exchanged between the parties[] are, we

find, definite enough to reflect the terms of the parties’ oral agreements and [d]o in and of

themselves constitute a written contract.”)).

Even so, the multiple writings must have a precise quantity term. Cackowski, 2023 WL

155124, at *6 (explaining that the quantity term is a requirement). Here, the Court finds that the

parties’ emails do not contain a precise quantity term. When Bobar made the initial contact with

Jansen, he told Jansen that he had been “tasked to engage suppliers and come up with an Envoy

program for all members and drive sales to fewer partnered suppliers” [Doc. 1-1 p. 46], and shortly

thereafter, he noted to Jansen the “need to create one Envoy program and create true value for our

partnered vendors” [Id. p. 49]. Later, Bobar reiterated that the need was to “create one Envoy[,]”

and “one program for all of Envoy and the price list for all of Envoy[,]” but he did not reference a

sole supplier [Id. at 49, 53]. In a later email, Bobar noted that “[w]e are prepared to award the

register roll business to [Plaintiff] for all of Envoy Solutions” [Doc. 1-1 p. 108]. And subsequently,

Bobar committed “to giving [Plaintiff] all of the business today” [Id. at 116]. But the Court does

not construe these statements, in light of the other emails, to mean “all of the Defendants’ needs,

of all kinds” [Doc. 13 p. 15]. Further, on August 1, 2022, Bobar told Anderson that he was going

to check with another wholesaler, Essendant, on another item [Doc. 1-1 p. 140]. While the

undersigned has construed the allegations in the light most favorable to Plaintiff, the Court has

reviewed the emails attached to the Complaint and finds that a required term is missing from these

documents: quantity. Plaintiff therefore cannot satisfy the Statute of Frauds.6

Still, there are exceptions to the Statute of Frauds—one of which Plaintiff relies on.

Specifically, Tennessee Code Annotated § 47-7-207(3) states, “Conduct by both parties which

recognizes the existence of a contract is sufficient to establish a contract for sale although the

writings of the parties do not otherwise establish a contract.” In other words, under this statute:

[P]erformance by both parties under what they apparently believe to

be a contract may be sufficient to establish a contract,

notwithstanding the fact that no contract would have been

recognized on the basis of their writings alone. The rationale for

such a rule is easy to apprehend. Sellers usually do not ship and

Buyers do not receive goods unless they think they have struck a

deal. Under such circumstances, the terms of the agreement between

the parties are the terms on which the writings of the parties agree

as well as the UCC’s gap filling provisions.

Carbon Processing & Reclamation, LLC, 823 F. Supp. 2d at 804 (internal quotation marks and

citations omitted).

Plaintiff points to Southeastern’s purchase orders to support its allegations that it would be

Defendants’ sole supplier, stating that it began purchasing items under the parties’ agreed-upon

pricing terms. But the comment to Tennessee Code Annotated § 47-2-201 states that partial

performance, in lieu of a contract, “can validate the contract only for the goods which have been

accepted or for which payment has been made and accepted.” Tenn. Code Ann. § 47-2-201 cmt.

2; see also Aluminum Vinyl Sales Co. v. Woerz, No. 03A01-9304-CV-00172, 1993 WL 367125, at

*3 (Tenn. Ct. App. Sept. 20, 1993). Southeastern acknowledges that it issued purchase orders in

6 In light of this finding, the Court does not need to address Defendants’ argument that the

parties did not satisfy the condition of acceptance—that is, Furia did not sign the program [See

Doc. 13 p. 16].

August and September 2022 [See Doc. 13 p. 17]. But as Plaintiff alleges in the Complaint, it and

Southeastern had a business relationship prior to the parties’ negotiations [Doc. 1-1 ¶¶ 14, 17]. In

addition, there are no allegations that the purchase orders contain an exclusivity term [See Docs.

1-1 pp. 177–199]. The Court finds that the purchase orders do not evidence an exclusivity

agreement.7 In light of the above findings, the Court DISMISSES Plaintiff’s breach of contract

claim.

C. Fraud-Based Claims

Counts II and III in the Complaint allege promissory fraud and intentional

misrepresentation, respectively [Doc. 1-1 ¶¶ 85–89].8 Defendants state that Plaintiff’s “alleged

representation deals with a future intent, not a present fact, which is fatal to the Fraud-Based

Claims” [Doc. 13 p. 19]. In addition, Defendants state that Plaintiff does not plead promissory

fraud with particularity as required by Rule 9(b) of the Federal Rules of Civil Procedure.

1. Intentional Misrepresentation

The parties agree that intentional misrepresentation has six elements: (1) the defendant

made a representation of an existing or past fact; (2) the representation was false when made; (3)

the representation was in regard to a material fact; (4) the false representation was made either

knowingly or without belief in its truth or recklessly; (5) plaintiff reasonably relied on the

misrepresented material fact; and (6) plaintiff suffered damage as a result of the misrepresentation.

7 Further, as Defendants argue, the Court cannot consider any alleged oral statements that

are not incorporated into the orders themselves pursuant to the parol evidence rule. Tenn. Code

Ann. § 47-2-202; Upperline Equip. Co. v. J & M, Inc., 724 F. Supp. 2d 883, 890 (E.D. Tenn. 2009)

(“The alleged oral modification to the Purchase Agreement was not in writing and would be barred

by the Statute of Frauds.”).

8 Defendants point out that “‘[i]ntentional misrepresentation,’ ‘fraud misrepresentation,’ and

‘fraud’ are different names for the same cause of action” [Doc. 13 p. 19 (citing Hodges v. Craig,

382 S.W.3d 325, 342 (Tenn. 2012)].

Iseman v. Werner, No. 3:19-CV-365-TRM-DCP, 2020 WL 4674113, at *7 (E.D. Tenn. Aug. 12,

2020) (citing Walker v. Sunrise Pontiac-GMC Truck, Inc., 249 S.W.3d 301, 311 (Tenn. 2008)).

Defendants assert that Plaintiff has not alleged the first element. Defendants contend that

the only arguable basis for this claim is Plaintiff’s allegation that it “would be the sole supplier of

bond, thermal, and carbonless paper products for Southeastern and Penn Jersey in the course of

their business” [Doc. 13 p. 20 (citations omitted)]. But in reviewing the context of the total

negotiations, Defendants state that these “would be” representations “are forward-looking and do

not concern an existing or past fact” [Id.]. According to Defendants, “Courts applying Tennessee

law regularly reject efforts to cloak a ‘promissory fraud’ claim in ‘intentional misrepresentation’

garb” [Id. (citation omitted)].

Plaintiff states that it has sufficiently pleaded the first element of its intentional

misrepresentation claim. Specifically, Plaintiff points to “Furia’s representations to [it] that the

parties had an agreement after Southeastern began ordering from [it] pursuant to the parties’ newly

agreed-upon pricing[,]” calling these representations “existing or past facts” [Doc. 22-1 p. 19

(internal quotation marks omitted)]. According to Plaintiff, this is sufficient “to draw the

reasonable inference that Defendants did not intend to keep their promise for [Plaintiff] to be the

sole supplier to Defendants when they made it” [Id.]. Stating that Southeastern began purchasing

pursuant to the new pricing terms on August 8, 2022, Plaintiff states that a few days later, “Furia

openly stated in a Microsoft Teams meeting that Defendants would move forward with [Plaintiff],

that Southeastern’s order would continue, and Penn Jersey’s would begin in September 2022” [Id.

(emphasis omitted)]. Plaintiff claims that when “Furia made the statement regarding Southeastern,

the parties were already operating under the agreement” [Id.].

“Statements of future intention, opinion, or sales talk are generally not actionable because

they do not involve representations of material past or present fact.” Power & Tel. Supply Co. v.

SunTrust Banks, Inc., 447 F.3d 923, 931 (6th Cir. 2006) (citing McElroy v. Boise Cascade Corp.,

632 S.W.2d 127, 130 (Tenn. Ct. App. 1982)); see also Frankot v. Reg’l Inst. for Veterinary

Emergencies & Referrals, No. 1:13-CV-27, 2013 WL 12192495, at *5 (E.D. Tenn. July 26, 2013)

(“Courts applying Tennessee law recognize a defendant’s promise to perform in the future

implicates a promissory fraud claim and not an intentional misrepresentation claim.”). Here,

Plaintiff has pleaded its intentional misrepresentation claim in the context of forward-looking

promises. In support of its argument, Plaintiff cites to paragraphs 56–57 of the Complaint, but

there are no representations in these paragraphs [See Doc. 1-1 ¶¶ 56–57]. Plaintiff also cites to

paragraphs 58–62, but most of these paragraphs simply refer to the parties’ email exchanges

regarding information requests [See id. at ¶¶ 58–62]. Paragraph 62 contains the following

allegation: “Defendants’ Furia ended the call by stating that Plaintiff’s program for serving

Defendants would move forward, that Defendant Southeastern’s orders would continue, and that

Plaintiff could anticipate orders from Defendant Penn Jersey beginning in September[] 2022” [Id.

¶ 62]. But these are all statements of future intention that do not relate to an existing or past fact

but instead speak to Defendants’ future conduct: a promise to continue orders and a promise for

Penn Jersey to place orders.9 This does not state a claim for intentional misrepresentation. See

Power & Tel. Supply Co., 447 F.3d at 931 (finding that the representations “involved generalized

9 Both parties recognize that while a promise of future intention is not actionable as an

intentional misrepresentation claim, it can be actionable as a promissory fraud claim [See Doc. 13

p. 19 (“Promissory fraud shares these elements, except that the representation required by the first

element is not one as to an existing or past fact . . .”); Doc. 22-1 p. 19 (requesting that promissory

fraud claim go forward should the Court dismiss the intentional misrepresentation claim); Doc. 23

p. 13 (noting that there is an exception to the requirement that fraud requires a representation of

past or present fact, but the exception is the doctrine of promissory fraud).

sales talk and not representations of existing or past fact” and therefore did not constitute an

intentional misrepresentation claim); Frankot, 2013 WL 12192495, at *5 (the defendant’s “alleged

promise to provide access or . . . alleged promises to serve as [the p]laintiff’s mentor are not

representations of existing fact”).

2. Promissory Fraud Claim

Defendants contend that Plaintiff does not adequately plead its promissory fraud claim

pursuant to Rule 9(b). Arguing that Plaintiff engages in “group pleading,” Defendants state that

Rule 9 does not allow that form of pleading. Defendants contend that Plaintiff has attached

numerous emails and quotes them in the Complaint, but “none of the emails . . . contains the

supposed promise on which [Plaintiff’s] fraud claims are based—namely, that [Plaintiff] would be

the sole and exclusive supplier of bond, thermal, and carbonless paper products for all Defendants”

[Doc. 13 p. 21]. Further, Defendants argue that Plaintiff does not attribute any specific promise to

one Defendant, which is fatal to its claim. Defendants add that “it is not enough for [Plaintiff] to

identify an alleged parent, subsidiary, or sister relationship between the various Defendants to

overcome the lack of particularized allegations” [Id. at 22 (citation omitted)]. Defendants

summarize that Plaintiff “does not identify with sufficient particularity which of the four

Defendants—Envoy, Southeastern, Penn Jersey, or FEMSA—made the alleged misrepresentation

upon which its promissory fraud claim is based[,]” thus, failing to meet Rule 9(b)’s requirements

[Id.].

Plaintiff responds that Defendants’ position is incorrect and that “the manner in which it

[pleaded] its allegations regarding fraud and/or misrepresentation against the Defendants was

sufficient to put [them] on notice of its claims such that dismissal pursuant to F.R.C.P. Rule

12(b)(6) is inappropriate” [Doc. 22-1 p. 16]. Here, Plaintiff argues, that it made “specific

allegations that Defendants made representations to [it] on multiple occasions that it would be the

sole supplier for Defendants, negotiated a pricing plan for Defendants, began to perform under the

pricing plan, and did so without present intention to fully perform” [Id. at 20 (citation omitted)].

Referencing Defendants in a group, Plaintiff contends, “is not fatal to [its] promissory fraud claim”

[Id.].

In addition, Plaintiff argues that it identifies “Bobar and Furia[] as the makers of the

fraudulent statements on behalf of Defendants and sets forth those statements in terms of time,

place, and content” [Doc. 22-1 p. 20]. Throughout its Complaint, Plaintiff states that it alleges

Defendants’ misrepresentations and fraudulent statements, upon which it reasonably relied, and

that it “bought products in order to ensure Defendants’ needs were adequately supplied pursuant

to the agreement, adding Penn Jersey to its insurance and providing proof of such, exchanging tax

information and credit references with Defendants, and fulfilling orders placed by Southeastern

pursuant to the newly agreed-upon pricing program” [Id. at 21 (citation omitted)]. Plaintiff states

that its “Complaint also sets up the fraudulent scheme of the Defendants, which was to negotiate

the terms with [it], drive [it] to rely on the agreement to its detriment causing [it] to expend time,

efforts, and money, doing so without intent to fully perform and subsequently unilaterally

terminating the agreement to use another company, Iconex” [Id. (citation omitted)]. Without the

benefit of discovery, according to Plaintiff, it “has been unable to determine whether Defendants

utilized its agreement with [it] in order to benefit itself with Iconex” [Id.].

Defendants reply that while Plaintiff claims to identify Bobar and Furia as the individuals

who made the fraudulent statements, the cited paragraphs and underlying documents do not

contain statements from them [Doc. 23 pp. 13–15]. Defendants maintain that Plaintiff cannot

engage in group pleading under Rule 9.

Pleading fraud is subject to a heightened pleading standard. Fed. R. Civ. P. 9(b).

Specifically, a plaintiff who alleges fraud or mistake, “must state with particularity the

circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a

person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). This means that the party must

allege “the time, place, and content of the alleged misrepresentation on which he or she relied.”

United States ex rel. Bledsoe v. Cmty. Health Sys., 501 F.3d 493, 509 (6th Cir. 2007) (quoting

United States ex rel. Bledsoe v. Cmty. Health Sys., 342 F.3d 634, 643 (6th Cir. 2003)). “In other

words, a plaintiff must (1) specify the allegedly fraudulent statements, (2) identify the speaker, (3)

plead when and where the statements were made, and (4) explain what made the statements

fraudulent.” Gordon v. B. Braun Med. Inc., No. 1:19-CV-121, 2020 WL 1491378, at *10 (S.D.

Ohio Mar. 27, 2020) (citing Republic Bank & Trust Co. v. Bear Sterns & Co., 683 F.3d 239, 247

(6th Cir. 2012)).

The purpose of this heightened pleading standard is two-fold: (1) “to put defendants on

notice of the alleged misconduct,” and (2) “to prevent fishing expeditions and to narrow potentially

wide-ranging discovery to relevant matters.” Republic Bank & Tr. Co., 683 F.3d at 255 (internal

quotation marks and citation omitted). Despite this heightened pleading standard, however, Rule

9 “should not be read to defeat the general policy of ‘simplicity and flexibility’ in pleadings

contemplated by the Federal Rules.” U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496,

503–04 (6th Cir. 2008) (quoting Michaels Bldg. Co. v. Ameritrust Co., N.A., 848 F.2d 674, 678

(6th Cir. 1988)).

Count II of the Complaint relates to Plaintiff’s claim for promissory fraud [Doc. 1-1 ¶ 85–

87]. In paragraphs 86 and 87, Plaintiff references “Defendants” collectively. “Courts generally

frown upon ‘group pleading.’” Gordon, 2020 WL 1491378, at *11 (quoting Kurek v. Ohio Dep’t

of Dev. Disabilities, No. 3:16cv623, 2017 WL 1555930, at *6 (N.D. Ohio Jan. 20, 2017)). Even

so, the Court finds that the Complaint provides Defendants notice so that they can adequately

respond. See Newberry v. Serv. Experts Heating & Air Conditioning, LLC, 806 F. App’x 348, 362

(6th Cir. 2020) (“Thus, while a plaintiff’s complaint that refers only to ‘defendants’ is insufficient

under Rule 9(b), a complaint that identifies a particular corporate defendant as well as the time,

place, and content of the alleged misrepresentation need not also identify the corporation’s

individual employee who made the alleged fraudulent misrepresentation”) (cleaned up).

Beginning with paragraph 21, the Complaint details the parties’ negotiations and specifically

identifies Bobar and Furia as the primary individuals who took part in these discussions [Doc. 1-1

¶¶ 21–70]. The Complaint outlines the date of each communication, the substance thereof, and

attaches those communications as exhibits [See Doc. 1-1]. And, in paragraph 62, Plaintiff alleges

that on August 12, 2022, during a virtual Teams meeting, “Defendants’ Furia ended the call by

stating that Plaintiff’s program for servicing Defendants would move forward, that Defendant

Southeastern’s orders would continue, and that Plaintiff could anticipate orders from Defendant

Penn Jersey beginning in September[] 2022” [Id. ¶ 62]. The allegations in the Complaint detail

the who, what, when, where, and how. Cf. BlueCross Blueshield of Tenn. v. Dunwoody Labs, Inc.,

No. 1:20-CV-167, 2021 WL 6275265, at *4 (E.D. Tenn. Dec. 8, 2021) (“Progressive, however,

does not specify who made the misrepresentation, and whether they were employed by the County

or the Hospital. It simply alleges that ‘Decatur’—a term Progressive uses to refer to the Hospital

and the County collectively—made these representations.” (internal citation omitted)); Heartland

Payment Sys., Inc. v. Hickory Mist Luxury Cabin Rentals, LLC, No. 3:11-CV-350, 2011 WL

6122371, at *5 (E.D. Tenn. Dec. 8, 2011) (“Plaintiff’s allegations fail to include any particularized

facts with respect to the who, the what, the when, the where, and the how regarding the alleged

fraudulent conduct. There is no allegation regarding the time or place in which the fraudulent

representations or transfers were made.”).

Defendants contend that Plaintiff “does not identify with sufficient particularity which of

the four Defendants—Envoy, Southeastern, Penn Jersey, or FEMSA—made the alleged

representation upon which its promissory fraud claim is based” [Doc. 13 p. 22].10 But similar to

the above reasoning, Plaintiff identifies the two individuals who allegedly made the false

promises—Bobar and Furia. Cf. Hoover v. Langston Equip. Assocs., Inc., 958 F.2d 742, 745 (6th

Cir. 1992) (“The complaint identifies relationships between various of the defendants but it alleges

misrepresentations without sufficiently identifying which defendants made them. The complaint

does not enable a particular defendant to determine with what it is charged.”); Constr. Mgmt., Inc.

v. Expo Hosp., LLC, No. 3:19-CV-00298, 2020 WL 489461, at *4 (M.D. Tenn. Jan. 30, 2020)

(dismissing the fraud allegations against one defendant because the plaintiff resorted to group

pleading and there were “no corresponding allegations of false statements made” by the defendant

to the plaintiff). Additionally, the Complaint sets forth these individuals’ role with the company

Defendants [See Doc. 1-1 ¶¶ 20–21, 28, & 30]. The Court concludes that these allegations

sufficiently state a claim for promissory fraud.

D. Promissory Estoppel Claim

Defendants assert three reasons in support of their argument that the Court should dismiss

Plaintiff’s promissory estoppel claim. First, Defendants state that Plaintiff “relies on the same

impermissible group pleading that forms the basis for its Fraud-Based Claims[,]” citing its

arguments outlined above [Doc. 13 p. 23]. Second, Defendants argue that the alleged promise is

10 Given that the Court lacks jurisdiction over FEMSA, see supra pp. 10–14, the Court will

not address this argument as it relates to that entity.

too indefinite to be enforced because it did not have a specific term. Third, Defendants argue that

Plaintiff’s actions in relying on the alleged promise were not objectively reasonable.

The Court has already determined that the Complaint complies with Rule 9(b), and

therefore, the Court will not re-visit this issue. Instead, the Court will turn to Defendants’

remaining arguments.

Defendants assert that Tennessee limits the doctrine of promissory estoppel to “exceptional

cases” [Doc. 13 p. 23 (citation omitted)]. Arguing that this is not an exceptional case, Defendants

state that the promise must be “sufficiently definite” [Id. at 24]. According to Defendants,

“Tennessee courts routinely find that promises without a definite length (such as a one-year or

multi-year duration) are too vague to be enforceable” [Id.]. Defendants state that this “is consistent

with their application of the Statute of Frauds, which requires contracts with lengths of one year

or more to be in writing” [Id.]. While Plaintiff states that it expected the parties’ relationship to

last ten or more years, Defendants argue that it does not allege they promised a particular term.

Defendants state, “The Court should not allow [Plaintiff] to avoid the Statute of Frauds by

enforcing a ‘sole supplier’ agreement (based on an alleged oral statement) with a ten-year term

(created by [Plaintiff’s] ‘expectation’)” [Id.].

Further, Defendants state that Plaintiff’s “alleged reliance on an oral promise was

objectively unreasonable” [Id. at 25]. Pointing to Bobar’s statement at the beginning of the

negotiations that “Furia would sign the final agreement[,]” Defendants assert that Plaintiff acted

unreasonably because it was aware the parties needed a signed agreement [Id. (citation omitted)].

Defendants submit:

And, purchasing materials in anticipation of product it hoped Penn

Jersey might order is not reasonable: (1) Penn Jersey never told

Monaco it was ready to issue orders; (2) Penn Jersey never sent

Monaco any purchase orders at all; (3) the email communications

between Monaco and Bobar were not consistent with an exclusivity

agreement with Penn Jersey (or Southeastern, or the other

Defendants); and (4) the parties never discussed the length of the

agreement.

[Id.].

Plaintiff responds that it has alleged an exceptional case, “wherein the doctrine of

promissory estoppel should be applied and the Statute of Frauds is inapplicable” [Doc. 22-1 p. 23].

According to the allegations in the Complaint, Plaintiff asserts, Bobar and Furia promised that

Plaintiff would be the sole supplier, inducing Plaintiff “to act to its detriment” [Id. (citations

omitted)]. In addition, Plaintiff argues that “[b]ased on its course of dealings with Southeastern,

the [Plaintiff’s] pricing offer to Defendants was for a definite one-year term (August 1, 2022,

through July 31, 2023) that [Plaintiff] reasonably anticipated would roll over from year to year”

[Id. (citations omitted)]. Plaintiff submits that it adjusted its pricing so the parties could “close the

deal” and that it “relied on Furia’s statement that Defendants would move forward with [Plaintiff]

and to expect forthcoming orders from Southeastern and Penn Jersey” [Id. (citations omitted)].

Plaintiff submits that the parties agreed in writing to a “one-year term portion for the pricing . . .

which was never altered by Defendants in subsequent negotiations” [Id. at 24 (citations omitted)].

Citing to the actions it took based on Defendants’ alleged promises, Plaintiff alleges that it

suffered an economic detriment that was reasonably foreseeable [Id.]. Plaintiff argues that

Defendants told it to expect additional sales, they requested additional products, and Southeastern

purchased items at the agreed-upon pricing program [Id.]. With respect to Defendants’ argument

that Bobar stated that Furia needed to sign the program, Plaintiff states that such ignores Bobar’s

later statements that Defendants would move forward with Plaintiff, and they began to perform

using the agreed-upon pricing program [Id. at 24–25]. Arguing that Bobar and Furia told Plaintiff

to expect orders, Plaintiff states that it reasonably relied on those statements to purchase additional

products and to take further actions (i.e., adding Penn Jersey to its insurance) [Id. at 25]. Plaintiff

states that the application of promissory estoppel is warranted in this case.

With respect to Plaintiff’s argument regarding the one-year pricing list, Defendants reply

that “[a] promise with a yearly length that rolls over indefinitely is the same as a promise with an

indefinite length” and is not enforceable [Doc. 23 p. 16]. Defendants disagree that this is an

exceptional case. Defendants dispute there was a partial performance of the alleged agreement,

stating that “the Southeastern purchase orders were their own, separate, fully integrated written

contracts containing no exclusivity agreement” [Id.].

Promissory estoppel is “a promise which the promisor should reasonably expect to induce

action or forbearance of a definite and substantial character on the part of the promisee and which

does induce such action or forbearance is binding if injustice can be avoided only by enforcement

of the promise.” Alden v. Presley, 637 S.W.2d 862, 864 (Tenn. 1982). “[A] plaintiff[] may invoke

the theory of promissory estoppel, even though contracts for the sale of goods would ordinarily be

governed by Article 2 of the [UCC].” Amacher v. Brown-Forman Corp., 826 S.W.2d 480, 482

(Tenn. Ct. App. 1991) (citation omitted); see also Chavez v. Broadway Elec. Serv. Corp., 245

S.W.3d 398, 405 (Tenn. Ct. App. 2007) (“A claim of promissory estoppel is not dependent upon

the existence of an express contract between the parties.” (citation omitted)). As the Tennessee

Court of Appeals has explained, “The key element in finding promissory estoppel is, of course,

the promise. It is the key because the court must know what induced the plaintiff’s action or

forbearance; only then would the court be able to prevent the injustice resulting from a failure to

keep the promise.” Amacher, 826 S.W.2d at 482.

To state a claim for promissory estoppel, plaintiffs must allege “(1) that a promise was

made; (2) that the promise was unambiguous and not unenforceably vague; and (3) that they

reasonably relied upon the promise to their detriment.” Chavez, 245 S.W.3d at 404 (citation

omitted). It is a “equitable doctrine, and its limits are defined by equity and reason.” Id. (citation

omitted). “Tennessee does not liberally apply the doctrine of promissory estoppel. To the

contrary, it limits application of the doctrine to exceptional cases.” Barnes & Robinson Co. v.

OneSource Facility Servs., Inc., 195 S.W.3d 637, 645 (Tenn. Ct. App. 2006) (citing Shedd v.

Gaylord Entertainment Co., 118 S.W.3d 695, 700 (Tenn. Ct. App. 2003)); see also Johnson v.

Allison, No. M2003-00428-COA-R3CV, 2004 WL 2266796, at *8 (Tenn. Ct. App. Oct. 7, 2004)

(“Since the application of promissory estoppel in contract cases creates an exception to the Statute

of Frauds, it should not be applied too liberally lest the exception swallow the rule.”).

As explained above, at the motion to dismiss stage, the Court must construe the pleadings

in favor of Plaintiff. Thurman v. Pfizer, Inc., 484 F.3d 855, 859 (6th Cir. 2007). In so construing,

the Court will allow this claim to proceed. According to the exhibits attached to the Complaint,

Bobar stated that he was “looking for one program for all of Envoy and one price list for all of

Envoy” [Doc. 1-1 p. 53]. Later, Bobar stated, “We are prepared to move forward with [Plaintiff]”

and that would be his suggestion to his boss, Furia [Id. at 108]. He mentioned that Bobar is also

ready to move forward if Jansen could address some issues [Id.]. On July 21, 2022, Plaintiff

offered “this program” to Envoy from August 1, 2022, to July 31, 2023 [Id. at 112]. Bobar

responded, “I think this is going to be a great relationship[,]” and he requested a revised price list

[Id. at 115]. Bobar later requested a pricing adjustment, believing that if Plaintiff agreed, it would

“close the deal and [they] can move forward” [Id. at 116]. Bobar concluded, “Please let me know

if you can make this adjustment[,] and I will commit to giving you all the business today” [Id.].

Plaintiff responded, “[L]ets move forward with your proposal” [Id.]. In another email, dated July

26, 2022, Bobar stated he was planning to “announce this to the sales team on Monday 08/01/22.

We are very excited to move forward and really partner with [Plaintiff]” [Id. at 124]. The parties

later exchanged information for shipping, and according to the allegations in the Complaint, Furia

told Plaintiff during a virtual meeting that Plaintiff’s program would move forward [Id. ¶ 62].

Southeastern then began making purchase orders “under the new pricing program created for the

Defendants and agreed upon by the parties” [Id. ¶ 65].

Defendants argue that any alleged promise was not sufficiently definite in length. But

Plaintiff’s letter states that the program would be in effect from August 1, 2022, to July 31, 2023

[Id. at 112]. And, after receiving a pricing adjustment, Bobar responded, “I think this is going to

be a great relationship” [Id. at 115]. The parties also dispute whether Plaintiff reasonably relied

on the alleged promise. Defendants argue that Furia needed to sign the program as noted at the

beginning of their negotiations. Plaintiff alleges that during the parties’ virtual meeting, Furia

stated that Plaintiff’s program would move forward and that the parties worked together to start

the placement of orders [Id. ¶¶ 46–61]. Defendants also argue that Plaintiff’s anticipation of

product from Penn Jersey was not reasonable. The Complaint, however, alleges that on August 1,

2022, Caroline Bane, Senior Category Analyst for Defendant Envoy, requested that Plaintiff

complete the new vendor information for Defendant Penn Jersey; on August 9, 2022, Bobar

requested information from Plaintiff so Penn Jersey could set up product codes; and on August 12,

2022, Furia told Plaintiff that it could anticipate receiving Penn Jersey’s orders in September 2022

[Id. ¶ 50, 61, & 62]. In construing the allegations in favor of Plaintiff, the Court finds that at this

stage, Plaintiff reasonably relied on the above emails to prepare orders for Defendants. The Court

declines to dismiss Plaintiff’s promissory estoppel claim at this time.

IV. CONCLUSION

For the reasons stated above, the Court GRANTS IN PART AND DENIES IN PART

Defendants’ Consolidated Motions to Dismiss [Doc. 12]. Specifically, the Court DISMISSES

FEMSA from this matter. The Court also DISMISSES Plaintiffs breach of contract claim and its

claim for intentional misrepresentation. The Court finds Plaintiff's remaining claims for

promissory fraud and promissory estoppel shall proceed against the remaining Defendants.

IT IS SO ORDERED.

ENTER: _

Kp iehA Toole nA

Debra C. Poplin J

United States Magistrate Judge

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