# Cornerstone Move Management, LLC v. Paxton

> District Court, S.D. Ohio · August 19, 2025

URL: https://www.frixlaw.com/law-library/cases/11123538

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** August 19, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11123538

## How later opinions describe it (automated extraction)

- finding insufficient particularity as to “when and where the statement was made”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION - CINCINNATI
CORNERSTONE MOVE : Case No. 1:24-cv-366
MANAGEMENT, LLC,
: Judge Matthew W. McFarland
Plaintiff, :

v
MATT PAXTON, et al.,
Defendants.

ORDER AND OPINION

This matter is before the Court on Plaintiff's Motion to Dismiss Defendant Paxton’s
Counterclaims and Third-Party Complaint (Doc. 21), as well as Plaintiff's Continued
Motion to Dismiss Defendant Paxton’s Amended Counterclaims and Third-Party
Complaint (Doc. 45). This matter is fully briefed and ripe for the Court’s review. (See
Docs. 22, 24, 46-47.) For the following reasons, Plaintiff's Motion to Dismiss Defendant
Paxton’s Counterclaims and Third-Party Complaint (Doc. 21) is DENIED AS MOOT,
and Plaintiff's Continued Motion to Dismiss Defendant Paxton’s Amended
Counterclaims and Third-Party Complaint (Doc. 45) is GRANTED.
BACKGROUND
Plaintiff Cornerstone Move Management, LLC and its affiliate FirstLight Home
Care (“FirstLight”) are involved in a franchised business system to provide downsizing
and moving services. (Second Am. Ver. Compl., Doc. 43, 9-12.) On July 3, 2024,

Plaintiff initiated this federal action “for breach of contract, unfair competition, theft of
confidential information and trade secrets and civil conspiracy arising out of Defendants
[Matt Paxton, Frank Todisco, and Kate Grondin’s] attempts to start a directly competitive
business using data, information, concepts, resources, work product, contacts[,] and
materials that belong to [Plaintiff] and which are the subject of contracts between the
parties in which the Defendants explicitly agreed they would not use for competitive
purposes.” (Id. at J 1; see also Compl., Doc. 1.)
On March 11, 2025, Defendant Paxton filed Counterclaims against Plaintiff, as well
as a Third-Party Complaint against FirstLight. (Counterclaims, Doc. 44.) Plaintiff and
FirstLight ultimately responded by filing a Continued Motion to Dismiss the
Counterclaims and Third-Party Complaint. (Continued Motion, Doc. 45.) Plaintiff has
filed several Amended Complaints in this matter, to which Defendants have responded
by refiling an Answer, Counterclaims, and Third-Party Complaint. For present purposes,
the operative pleadings include Plaintiff's Second Amended Verified Complaint (Doc.
43) and Defendant Paxton’s corresponding Amended Counterclaims and Third-Party
Complaint (Doc. 44), which incorporate previous allegations.
Defendant Paxton brings three claims for relief. (Am. Counterclaims, Doc. 23.) His
first counterclaim alleges fraudulent inducement: Plaintiff “made numerous promises
and representations in order to induce Defendant . . . to engage in the business entity
which is the subject of this action, and which never came to fruition.” (Id. at 4 1-4.) As
for the second counterclaim, Defendant Paxton alleges a constructive discharge based
upon Plaintiff making it “impossible” for him to “discharge his duties.” (Id. at 4 5-7.)

Third, Defendant Paxton alleges breach of contract. (Id. at { 8.) Turning to Defendant
Paxton’s Third-Party Complaint, he alleges that FirstLight should be liable for all
damages because it is an empty shell entity owned and operated by the same individuals
who purport to operate Plaintiff Cornerstone. (Am. Third-Party Compl., Doc. 23, 9 1-4.)
LAW AND ANALYSIS
A Rule 12(b)(6) motion to dismiss for failure to state a claim tests a plaintiff's cause
of action as stated in a complaint. Golden v. City of Columbus, 404 F.3d 950, 958 (6th Cir.
2005); Fed. R. Civ. P. 12(b)(6). A claim for relief must be “plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). Courts accept all factual allegations as true and
construe them in the light most favorable to the plaintiff. Doe v. Baum, 903 F.3d 575, 581
(6th Cir. 2018). However, courts are not bound to do the same for a complaint’s legal
conclusions. Twombly, 550 U.S. at 555. This same framework applies when evaluating
whether a counterclaim sufficiently states a claim for relief. Lewandowski v. Deters, No. 22-
CV-106, 2023 WL 6536193, at *2 (E.D. Ky. July 11, 2023) (collecting cases).
IL Fraudulent Inducement Claim
Claims of fraud trigger a heightened pleading standard. “In alleging fraud or
mistake, a party must state with particularity the circumstances constituting fraud or
mistake.” Fed. R. Civ. P. 9(b). “Malice, intent, knowledge, and other conditions of a
person’s mind,” however, “may be alleged generally.” Id. The Sixth Circuit has
understood this mandate to mean that a plaintiff 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.” Frank v.

Dana Corp., 547 F.3d 564, 570 (6th Cir. 2008) (quotation omitted). This particularity
requirement serves the twin goals of ensuring that defendants are on notice of the alleged
conduct and preventing fishing expeditions. Republic Bank & Tr. Co. v. Bear Stearns & Co.,
683 F.3d 239, 255 (6th Cir. 2012). At the same time, Rule 9(b) “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)
(quotation omitted).
Plaintiff contends that Defendant Paxton’s fraud claim falls short of Rule 9(b)’s
particularity requirements. (Motion, Doc. 22, Pg. ID 314-16; Reply, Doc. 47, Pg. ID 751-
52.) Ata minimum, Rule 9(b) boils down to specifying 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 United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d
899, 903 (5th Cir. 1997)).
The Court begins with the who question. Plaintiff emphasizes that while the
Counterclaims identify three individual principals and a group of alleged
misrepresentations, they fail to indicate which principal made which alleged
misrepresentation. (Reply, Doc. 47, Pg. ID 751-52.) “In a fraud case with multiple
defendants, Rule 9(b) requires that the plaintiff plead specific allegations as to each
defendant’s alleged involvement.” Sugarlips Bakery, LLC v. AGG Franchising, LLC, No.
3:20-CV-830, 2022 WL 210135, at *10 (M.D. Tenn. Jan. 24, 2022) (quotation omitted).
Defendant Paxton’s fraud-based counterclaim involves allegations against a single
entity — Plaintiff Cornerstone. Reading these allegations in the light most favorable to

Defendant Paxton, Plaintiff's three principals— Bernard Markey, William Stewart, and
Glee McAnanly —all made these misrepresentations. (Am. Counterclaims, Doc. 23, 4 1-
3.) Defendant Paxton has therefore pled particularity as it pertains to the identity of the
speaker.
Next, the Court considers the question of when. As recently reaffirmed by the Sixth
Circuit, a plaintiff's “failure to give even one date on which an alleged misrepresentation
occurred dooms [his] ability to allege fraud with particularity.” Greer v. Strange Honey
Farm, LLC, 114 F.4th 605, 616 (6th Cir. 2024) (cleaned up). For instance, alleging that the
fraudulent statements were made during “relevant times” — without identifying such
relevant times in the complaint—falls short of alleging a timeframe with sufficient
particularity. See id. Here, Defendant Paxton’s pleading suffers from a similar problem
because it merely alleges that the fraudulent statements were made “prior to his
engagement and as an inducement to [Defendant Paxton] to engage with Plaintiff.” (Am.
Counterclaims, Doc. 23, § 1.) Such an open-ended timeframe fails to provide Plaintiff
with adequate notice. See, e.g., Bush Truck Leasing, Inc. v. Cummins, Inc., No. 1:18-CV-871,
2020 WL 3871322, at *4 (S.D. Ohio July 9, 2020) (dismissing fraud claim when the plaintiff
merely alleged that statements were made “during purchase negotiations”); Vendeven v.
Wyndham Vacation Resorts, Inc., No. 2:20-CV-56, 2021 WL 5567033, at *7 (M.D. Tenn. Nov.
29, 2021).
Additionally, as Plaintiff points out, the fraud-based counterclaim omits any
indication as to where the alleged misrepresentations took place or the mode of
communication. (Reply, Doc. 47, Pg. ID 751.) While Plaintiff's principal place of business

is in Cincinnati, Ohio, and Defendant Paxton resides in Georgia (Second Am. Ver.
Compl., Doc. 43, 3-4), the Counterclaims do not suggest where or how these alleged
misrepresentations materialized. See, e.g., Bush Truck Leasing, Inc., 2020 WL 3871322, at *4
(highlighting the lack of allegations concerning where the statements were made when
the parties lived in different states); Cole v. Harris, No. 4:09-CV-1270, 2010 WL 11681664,
at *3 (N.D. Ohio Jan. 4, 2010), aff'd, 444 F. App’x 888 (6th Cir. 2012) (dismissing fraud claim
when plaintiffs “fail[ed] to aver when the misrepresentations were made, the location
where these misrepresentations were made, or the mode or medium in which these
misrepresentations were made”); Newberry v. Silverman, 789 F.3d 636, 645 (6th Cir. 2015)
(finding insufficient particularity as to “when and where the statement was made”).
Because Defendant Paxton inadequately pleads particularity as to when, where,
or the mode of the misrepresentations, his fraudulent inducement claim cannot proceed.
II. Constructive Discharge Claim
Turning to Defendant Paxton’s second claim for relief, he incorporates his
preceding allegations of misrepresentations and claims that “Plaintiff's failure to
provide[ ] what it promised to provide [was] designed to and did make [Defendant
Paxton’s] ability to discharge his duties impossible, forcing him to separate from Plaintiff

... and constitut[ing] constructive discharge.” (Am. Counterclaims, Doc. 23, J 5-7.)
Plaintiff contends that it is unclear what type of claim Defendant Paxton is alleging and,
in any event, the type of constructive discharge theory put forth has not been judicially
recognized. (Motion, Doc. 22, Pg. ID 313-16; Reply, Doc. 47, Pg. ID 752-53). The Court
agrees.

Constructive discharge is not an independent cause of action. Starks v. New Par,
No. 98-1300, 181 F.3d 103 (Table), 1999 WL 357757, at *5 (6th Cir. 1999); Donnelly v. Health
Memit. Sols., Inc., No. 2:19-CV-5303, 2022 WL 22883109, at *3 (S.D. Ohio Feb. 8, 2022); Leath

v. Sec’y of United States Dep’t of Veterans Affs., No. 2:23-CV-11407, 2025 WL 968896, at *6
(E.D. Mich. Mar. 31, 2025) (collecting cases); Lucarell v. Nationwide, 44 N.E.3d 319, 331-32
(Ohio Ct. App. 2015), rev’d on other grounds, 97 N.E.3d 458 (Ohio 2018). “Instead, it is a
means of proving the element of an adverse employment action where the employee
quits instead of being fired for an employment discrimination claim.” Donnelly, 2022 WL
22883109, at *3 (quotation omitted); Starks, 1999 WL 357757, at *5 (For constructive
discharge to be actionable, “there must [be] an underlying cause of action for
employment discrimination.”). Here, Defendant Paxton argues that he has pled
constructive discharge by incorporating his fraudulent inducement allegations.
(Response, Doc. 46, Pg. ID 747; Am. Counterclaims, Doc. 23, § 7.) After examining the
Counterclaims as a whole, the Court does not find that Defendant Paxton has alleged an
employment discrimination claim. And, Defendant Paxton has not otherwise clarified
how this constructive discharge theory may service a cognizable claim. Thus, the Court
will dismiss this stand-alone constructive discharge claim.
III. Breach of Contract Claim
A breach of contract involves four elements: “(1) a contract existed, (2) one party
fulfilled his obligations, (3) the other party failed to fulfill his obligations, and (4) damages
resulted from that failure.” Quest Workforce Sols., L.L.C. v. Job1USA, Inc., 75 N.E.3d 1020,
1030 (Ohio Ct. App. 2016). Plaintiff argues that Defendant Paxton has failed to allege any

facts that Plaintiff violated its obligations under a contract or that Defendant Paxton
fulfilled his obligations under a contract. (Motion, Doc. 22, Pg. ID 317; Reply, Doc. 24, Pg.
ID 330-31.) In response, the extent of Defendant Paxton’s argument is that “all of the
allegations of the Counterclaim, read together, fully and completely state a claim for
breach of contract.” (Response, Doc. 46, Pg. ID 747.)
Defendant Paxton alleges that “Plaintiff's failure to honor the promises and
representations [alleged in the fraudulent inducement claim] constitute[s] a breach of
contract.” (Am. Counterclaims, Doc. 23, § 8.) These promises included, among other
things, that Defendant Paxton would receive employee benefits and equity, the company
would be adequately funded, and the company would have sufficient staff. (Id. at 2.)
Furthermore, Defendant Paxton alleges that these promises and representations
“constituted contracts between Plaintiff and [Defendant] Paxton.” (Id. at | 6.) Though
Defendant Paxton alleges that Plaintiff failed to fulfill its promises and representations,
he does not specify his obligations under the purported contract or that he fulfilled such
obligations. “To properly state a claim for breach of contract, the plaintiff must allege,”
among the other elements, that “the nonbreaching party performed his or her contractual
obligations.” Best Motors, L.L.C. v. Kaba, Nos. 113437, 114145, 2025 WL 662466, at *6 (Ohio
Ct. App. Feb. 27, 2025); see also Rachells v. Cingular Wireless, 483 F. Supp. 2d 583, 590 (N.D.
Ohio 2007); Vendeven, 2021 WL 5567033, at *9; Lewandowski, 2023 WL 6536193, at *2. Thus,
Defendant Paxton has not plausibly pled a breach of contract claim.

IV. Alter Ego
Defendant Paxton’s Third-Party Complaint seeks to hold FirstLight liable for “all
the damages to which he is entitled by reason of his Counterclaims.” (Am. Third-Party
Compl., Doc. 23, 4 4.) Plaintiff argues that the Third-Party Complaint fails to specify the
precise claim against FirstLight. (Reply, Doc. 24, Pg. ID 331). It appears that Defendant
Paxton attempts to allege each of the three counterclaims against FirstLight through an
alter ego theory. However, as each of these claims fail for the reasons explained above,
the Court finds that the Third-Party Complaint also fails to state a claim.
V. Leave to Amend
In the event the Court finds pleading inadequacies, Defendant Paxton seeks leave
to amend his Counterclaims and Third-Party Complaint. (Response, Doc. 46, Pg. ID 748.)
However, Defendant Paxton does not provide any proposed amendments. “The problem
with the lack of a motion or proposed amendment is that without viewing the proposed
amendment, it is impossible for the district court to determine whether leave to amend
should [be] granted.” United States ex rel. Harper v. Muskingum Watershed Conservancy
Dist., 739 F. App’x 330, 335 (6th Cir. 2018) (cleaned up); see also Kuyat v. BioMimetic
Therapeutics, Inc., 747 F.3d 435, 444 (6th Cir. 2014) (“A request for leave to amend almost
as an aside to the district court ina memorandum in opposition to the defendant’s motion
to dismiss is not a motion to amend.”) (cleaned up). Thus, the Court cannot currently
determine whether amendment would be proper. At the same time, however,
“{dJismissal with prejudice and without leave to amend is not appropriate unless it is
clear on de novo review that the complaint could not be saved by amendment.” Newberry

v. Silverman, 789 F.3d 636, 646 (6th Cir. 2015) (quotation omitted); see also Brown v.
Matauszak, 415 F. App’x 608, 614 (6th Cir. 2011).
Accordingly, if Defendant Paxton desires to amend his Counterclaims and Third-
Party Complaint, he shall file a motion to amend—along with the proposed amended
pleadings — within twenty-one (21) days of this Order. See Barnett v. Kroger Co., No. 1:22-
CV-544, 2023 WL 5899836, at *6 (S.D. Ohio Sept. 11, 2023).
CONCLUSION
For the foregoing reasons, the Court ORDERS the following:
(1) Plaintiff's Motion to Dismiss Defendant Paxton’s Counterclaims and Third-
Party Complaint (Doc. 21) is DENIED AS MOOT;
(2) Plaintiff's Continued Motion to Dismiss Defendant Paxton’s Amended
Counterclaims and Third-Party Complaint (Doc. 45) is GRANTED;
(3) Defendant Paxton’s Counterclaims and Third-Party Complaint are
DISMISSED WITHOUT PREJUDICE; and
(4) To the extent Defendant Paxton desires to amend his Counterclaims and Third-
Party Complaint, he SHALL FILE a motion to amend—along with the
proposed amended pleadings — within twenty-one (21) days of this Order.
IT IS SO ORDERED.
UNITED STATES DISTRICT COURT
THERN DISTRICT OF QHI
Hoe, We 1 ald!
By:
JUDGE MATTHEW W. McFARLAND

10

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11123538. Public record. Not legal advice.