United States District Court, S.D. West Virginia, Huntington Division
MEMORANDUM OPINION AND ORDER
C. CHAMBERS, CHIEF JUDGE
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.
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.
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
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.
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.
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.
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).
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)).
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).
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 ...