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Wright v. Sutton

United States District Court, S.D. West Virginia, Bluefield

July 5, 2017

LACY WRIGHT, JR., Plaintiffs,
v.
JAMES M. SUTTON, Defendants.

          MEMORANDUM OPINION AND ORDER

          David A. Faber Senior United States District Judge

         Pending before the court are motions to dismiss the Amended Complaint filed by the remaining defendants. (ECF Nos. 77 and 79). For reasons expressed more fully below, those motions are GRANTED.

         I. Background

         On October 27, 2006, plaintiffs filed this civil action, in the Circuit Court of McDowell County, against various defendants alleging that defendants engaged in a “freeze-out” of plaintiff Lacy Wright and other John Doe minority shareholders in American Bankshares, committed fraud, engaged in civil conspiracy, and were negligent. See Complaint generally (ECF No. 1). On September 19, 2008, the Office of Thrift Supervision closed Ameribank, alleged to be a subsidiary of American Bankshares, and appointed the Federal Deposit Insurance Corporation ("FDIC") as Receiver.

         On December 17, 2008, the FDIC filed a Motion to Substitute, in the McDowell County Circuit Court, seeking to substitute the FDIC as Receiver for defendant Ameribank. On that same day, the FDIC removed the case to federal court. On September 29, 2010, the court granted the motion to dismiss filed by the FDIC as Receiver for Ameribank for lack of subject matter jurisdiction based on plaintiffs' failure to exhaust administrative remedies.

         On July 6, 2010, the court granted defendant Crowe Chizek and Company, LLC's (hereinafter "Crowe") motion for a more definite statement. In particular, plaintiffs were directed to explain:

1) the nature of each claim for relief they are asserting while providing separate counts for each individual claim, 2) any statute or regulation allegedly violated (if applicable), 3) the facts that support each claim, and 4) the relief he seeks for each claim. The amended complaint must also specifically identify which counts are applicable to which defendants. Furthermore, plaintiffs are reminded of Federal Rule of Civil Procedure 12(f) and directed to omit from their more definite statement any impertinent or scandalous matter such as that contained in the last sentences of paragraphs numbered 20 and 21 of the original complaint.

ECF No. 51 at pp. 3-4. Plaintiffs were also warned that failure to comply with the court's Order might result in dismissal of this action without prejudice.

         On July 20, 2010, plaintiffs filed a ten-count Amended Complaint. According to the Amended Complaint, plaintiff Lacy Wright "was a loyal and patient stockholder in American Bankshares, Inc., for over thirty (30) years and was a minority shareholder in Defendant, American Bankshares, Inc." Amended Complaint at ¶ 2 (ECF No. 53). The Amended Complaint alleges that American Bankshares is a West Virginia corporation with its principal place of business in McDowell County, West Virginia. See id. at ¶ 5.

         Named as defendants are:

1) James M. Sutton, individually and in his capacity as Chairman of American Bankshares and a member and officer of the Board of Directors. See id. at ¶ 4.
2) Phillip H. Ward, III, individually and in his capacity as Vice Chairman of the Board of Directors of American Bankshares. See id. at ¶ 7.
3) Louis J. Dunham, individually and in his capacity as President and Chief Executive Officer and as a member of the Board of Directors of American Bankshares. See id. at ¶ 8.
4) Jack Baldini, individually and in his capacity as Chairman of the Board of Directors and as a Director of American Bankshares. See id. at ¶ 9.
5) Richard D. Caruso, individually and in his capacity as a Director of American Bankshares. See id. at ¶ 10.
6) Edward W. Orisko, individually and in his capacity as a Director of American Bankshares. See id. at ¶ 11.
7) Robert W. Riggs, individually and in his capacity as a Director of American Bankshares. See id. at ¶ 12.
8) American Bankshares. See id. at ¶ 5.
9) Crowe, an accounting firm retained by American Bankshares "to provide accounting, auditing, business and consulting services" to Ameribank. Id. at ¶ 13.

         By Judgment Order entered on March 29, 2011, Crowe was dismissed from the case.

         The Amended Complaint asserts ten counts: 1) Negligence; 2) Breach of Fiduciary Duty and Negligence; 3) Oppressive Conduct; 4) Negligent Misrepresentation; 5) Intentional Misrepresentation; 6) Civil Conspiracy; 7) Bad Faith and Fair Dealing; 8) Intentional Infliction of Emotional Distress; 9) Negligent Infliction of Emotional Distress and 10) Outrage. The remaining defendants - Sutton, American Bankshares, Ward, Dunham, Baldini, Caruso, Orisko, and Riggs - have moved to dismiss all counts against them.

         II. Standard of Review

         "[A] motion to dismiss for failure to state a claim for relief should not be granted unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of his claim." Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d 324, 325 (4th Cir. 1989) (citation omitted) (quoting Conley v. Gibson, 355 U.S. 41, 48 (1957), and Johnson v. Mueller, 415 F.2d 354, 355 (4th Cir. 1969)). "In considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993); see also Ibarra v. United States, 120 F.3d 474, 474 (4th Cir. 1997).

         In evaluating the sufficiency of a pleading, the recent cases of Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), provide guidance. When reviewing a motion to dismiss, under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief may be granted, a court must determine whether the factual allegations contained in the complaint “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests, ” and, when accepted as true, “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007)(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957); 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004)). “[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Twombly, 127 S.Ct. at 1969. As the Fourth Circuit has explained, “[a] complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains ‘enough facts to state a claim to relief that is plausible on its face.'” Lainer v. Norfolk S. Corp., 2007 WL 4270847 at *3 (4th Cir. 2007) (quoting Twombly, 127 S.Ct. at 1974).

         According to Iqbal and the interpretation given it by our appeals court,

[L]egal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement fail to constitute well-pled facts for Rule 12(b)(6) purposes. See Iqbal, 129 S.Ct. at 1949. We also decline to consider “unwarranted inferences, unreasonable conclusions, or arguments.” Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n. 26 (4th Cir. 2009); see also Iqbal, 129 S.Ct. at 1951-52.
Ultimately, a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 129 S.Ct. at 1949 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Facial plausibility is established once the factual content of a complaint “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In other words, the complaint's factual allegations must produce an inference of liability strong enough to nudge the plaintiff's claims “‘across the line from conceivable to plausible.'” Id. at 1952 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955).
Satisfying this “context-specific” test does not require “detailed factual allegations.” Id. at 1949-50 (quotations omitted). The complaint must, however, plead sufficient facts to allow a court, drawing on “judicial experience and common sense, ” to infer “more than the mere possibility of misconduct.” Id. at 1950. Without such “heft, ” id. at 1947, the plaintiff's claims cannot establish a valid entitlement to relief, as facts that are “merely consistent with a defendant's ...

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