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Moss v. Experian Information Solutions, Inc.

United States District Court, S.D. West Virginia, Huntington Division

March 24, 2017

TAMMY MOSS, Plaintiff,



         Pending before the Court is Plaintiffs' and Counterclaim Defendants' motions to dismiss Defendant and Counterclaim Plaintiff Wells Fargo's counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF Nos. 60, 77. Both Tammy and Kevin Moss bring identical motions to dismiss Wells Fargo's counterclaim. The motions assert that Wells Fargo's counterclaim for breach of contract did not state a claim because Wells Fargo did not plead it had incurred damages as a result of the breach and Wells Fargo did not comply with the ter ms of the contr act and therefore cannot bring a breach of contract claim. For the following reasons the motions are DENIED.

         I. Background

         In 2013, husband and wife Kevin and Tammy Moss filed suit against Wells Fargo in Putnam County West Virginia bringing claims related to loans made to Tammy and Kevin. The parties entered into a confidential settlement agreement. That agreement provided that Kevin and Tammy would release all past and future claims against Wells Fargo related to the accounts at issue in the Putnam County case. The agreement also provided that the parties would keep the terms as well as the existence of the agreement confidential. Kevin and Tammy agreed that if they breached the agreement, Wells Fargo would suffer irreparable harm and Wells Fargo could seek legal or equitable remedies.

         Plaintiffs then filed these cases claiming that Wells Fargo did not properly report the result of the loan accounts at issue in the Putnam County case properly to certain credit reporting agencies. Wells Fargo filed a counterclaim asserting a cause of action for breach of the settlement agreement. Specifically, Wells Fargo points to breaches of the release provision and the confidentiality agreement. The latter was breached, Wells Fargo claims, when Kevin and Tammy disclosed the existence and terms of the settlement agreement in documents publically filed with the Court. The former was breached when Tammy and Kevin filed their cases in federal court.

         Plaintiffs' then brought separate motions to dismiss, each arguing that Wells Fargo had failed to state a claim on which relief could be granted and the counterclaim should be dismissed pursuant to Rule 12(b)(6). Kevin and Tammy argue that Wells Fargo has not alleged that it suffered damages as a result of Plaintiffs' breach, and Wells Fargo cannot enforce the contract because it breached the contract too. Wells Fargo responds that its future settlement efforts in other cases will be hobbled and it has incurred attorney's fees and costs in this case. Wells Fargo goes on contend that no matter the facts alleged in the counterclaim, nominal damages can be inferred from the alleged breach. Lastly, Wells Fargo argues that on a motion to dismiss the Court cannot consider evidence beyond the pleadings to find that Wells Fargo also breached the contract.

         II. Legal Standard

         When considering a motion to dismiss pursuant to Rule 12(b)(6), a court follows a two-step approach: (1) “begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth, ” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), and then (2) “[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id.

         For the first step, the complaint must provide the plaintiff's “grounds of . . . entitlement to relief” in more factual detail than mere “labels and conclusions.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted). “[A] formulaic recitation of the elements of a cause of action will not do.” Id. at 555. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Iqbal, 556 U.S. at 679.

         For the second step, a court must take the remaining factual allegations in the complaint as true, and view them in the light most favorable to the plaintiff. See Twombly, 550 U.S. at 555-56. The complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Id. at 555, 570 (internal quotation marks omitted). Plausibility is established “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard . . . asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (internal quotation marks omitted).

         III. Analysis

         A breach of contract claim in West Virginia has three elements: “formation of a contract, a breach of the terms of that contract, and resulting damages.” Sneberger v. Morrison, 776 S.E.2d 156, 171 ( W.Va. 2015). A plaintiff must plead facts to support each of these elements to sustain a breach of contract claim. “Recoverable damages in an action for breach of contract cannot be too remote, contingent, or speculative, but must consist of actual facts form which a reasonably accurate conclusion could be drawn regarding the cause and amount of such damages.” Exec. Risk Indem., Inc. v. Charleston Area Med. Ctr., Inc., 681 F.Supp.2d 694, 726 (S.D. W.Va. 2009) (citing Commonwealth Tire Co. v. Tri-State Tire Co., 193 S.E.2d 544, 550 ( W.Va. 1972)).

         West Virginia recognizes nominal damages for breach of contract claims. Harper v. Consol. Bus Lines, 185 S.E. 225, 226 ( W.Va. 1936). Moreover, a court may infer them where a plaintiff has pled that a valid contract has been breached. Id. “Nominal damages arise where there is breach of a duty owed the plaintiff or an infraction of his right, though the amount of actual damages is not shown. Damages are inferred from the fact of a wrong done.” Id.; see also Exec. Risk, 681 F.Supp.2d at 726 (citing Harper, 185 S.E. at 226).

         Wells Fargo has pled with sufficient facts the existence of a contract between Kevin, Tammy, and Wells Fargo. It has also pled sufficient facts to support a breach of that contract. Kevin and Tammy, Wells Fargo alleges, have breached the release provision by bringing these suits and breached the confidentially provision by filing public documents that revealed the existence and the terms of the settlement agreement. The Court therefore infers from “the fact of a wrong done” that Wells Fargo is entitled to nominal damages. See Harper, 185 S.E. at 226. The Court also notes that Wells Fargo has specifically pled that it has incurred attorney's fees and ...

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