Case 3:06-cv-00288-HTW-LRA Document 53 Filed 04/24/2007 Page 1 of 12

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION

NICHOLAS COUGHLIN PLAINTIFF

VS. CIVIL ACTION NO. 3:06CV288-HTW-JCS

FRANKLINSQUIRES COMPANIES, LLC et al. DEFENDANTS

MOTION TO DISMISS AMENDED COMPLAINT OR, IN THE ALTERNATIVE,

MOTION FOR SUMMARY JUDGMENT

COME NOW Defendants C. Rick Koerber ( “Koerber”), FranklinSquires Companies, LLC

(“FSC”) and Hill Erickson, LLC(“HE”), by counsel, and pursuant to F.R.C.P. 12(b)(6) and/or 56

files this their Motion to Dismiss Amended Complaint or, In the Alternative, Motion for Summary

Judgment in relation to the claims of Plaintiff Nicholas Coughlin (“Coughlin”) and in support thereof

state the following:

1. On or about July 5, 2006, Koerber filed a dismissal motion in relation to Coughlin’s

initial complaint pursuant to F.R.C.P. 12(b)(6). Koerber’s motion and rebuttal in support of the

dismissal motion, including any exhibits thereto, are incorporated herein by reference pursuant to

F.R.C.P. 10.

2. On or about July 5, 2006, FSC and HE likewise filed a dismissal motion in relation

to Coughlin’s initial complaint pursuant to F.R.C.P. 12(b)(6). The motion, supporting memorandum

and rebuttal in support of the dismissal motion, including any exhibits thereto, of FSC and HE are

incorporated herein by reference pursuant to F.R.C.P. 10.

3. After the briefing schedule was completed on the dismissal motions of the

Defendants, Coughlin sought leave to amend his complaint. Koerber, FSC and HE opposed

Coughlin’s motion on futility grounds. The Response to Motion for Leave to File Amended
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Complaint of Koerber, FSC and HE is incorporated herein by reference pursuant to F.R.C.P. 10.

4. Despite the opposition of Koerber, FSC and HE to Coughlin’s motion for leave to

amend complaint, the Court granted Coughlin’s motion. Thereafter, Koerber, FSC and HE filed their

Appeal of Magistrate Judge’s Decision and motion to stay pending appeal both of which are

incorporated herein by reference pursuant to F.R.C.P. 10.

5. On October 19, 2006, Coughlin filed his Amended Complaint, which added HE’s

insurer, Lexington Insurance Company (“Lexington”), as a defendant and added additional theories

and/or claims that failed to state a claim against Koerber, FSC and HE. (See Coughlin’s Amended

Complaint at paras. 44 and 45 – allegations/claims regarding Lexington). Thereafter, on November

2, 2006, Koerber, FSC and HE filed their answer thereto. Both of such pleadings are incorporated

herein by reference pursuant to F.R.C.P. 10.

6. Despite Coughlin’s Amended Complaint adding Lexington as a defendant, Coughlin,

on information and belief, never served Lexington with process as Lexington has never filed a

responsive pleading to the complaint nor has Coughlin filed a proof of service related to Lexington

pursuant to F.R.C.P. 4(l). Pursuant to F.R.C.P. 4(m), Coughlin had until February 16, 2007, the one

hundred and twentieth day following the date Coughlin filed his Amended Complaint, within which

to serve Lexington with a summons and a copy of Coughlin’s Amended Complaint. Since Coughlin

filed no motion to extend the time for service and demonstrated no “good cause” for his failure to

do so within the 120 day time period provided by F.R.C.P. 4(m), Coughlin’s Amended Complaint

as against Lexington, including the claims related thereto, are due to be dismissed.

7. For the purpose of a motion to dismiss pursuant to F.R.C.P. 12(b)(6), the allegations

of Coughlin’s Amended Complaint must be taken as true. Fernandes-Montes v. Allied Pilots Assoc.,

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987 F. 2d 278, 284 (5th Cir. 1993). However, dismissal under Rule 12(b)(6) is proper where the

pleadings on their face reveal that the plaintiff can prove no set of facts that would entitle the

plaintiff to the requested relief. Garrett v. Commonwealth Mort. Corp. of America, 938 F. 2d 591,

594 (5th Cir. 1991). To the extent the Court relies upon the matters outside the pleadings referred to

herein by Koerber, FSC and HE, including the affidavits of Judy Wooten Evans and Brian P. Cronin,

the instant motion is converted to a summary judgment motion under F.R.C.P. 56. F.R.C.P. 12(b).

In the event the summary judgment standard applies to all or some of the claims asserted in

Coughlin’s Amended Complaint and/or the arguments made by Koerber, FSC and HE in relation

thereto, there are no genuine issues as to any material fact and Koerber, FSC and HE are entitled to

judgment as a matter of law. As will be demonstrated herein, the claims set forth in Coughlin’s

Amended Complaint fail as a matter of law or, in the alternative, there are no legitimate disputed

questions of material fact as to Coughlin’s claims and Koerber, FSC and HE are entitled to a

judgment in their favor as a matter of law.

8. Brief Summary of Factual Allegations in Coughlin’s Amended Complaint –

Coughlin alleges that he was an agent of FSC, that he completed a FSC training course and became

a “FRSE representative” and that, by virtue of becoming a FRSE representative, he was entitled to

a twenty-five percent commission on any property he located for FSC and which FSC purchased.

(Coughlin’s Amended Complaint at paras. 9, 15,and16). Coughlin further alleges that, in connection

with his agency with FSC, Coughlin approached Mr. Jeff Brantley (“Brantley”) about purchasing his

Clinton, MS home (“Brantley Property”). Coughlin’s Amended Complaint at para. 17. Coughlin also

alleges that he “negotiated a deal with Jeff Brantley for the sale of his home” and that FSC

subsequently purchased the Brantley Property through HE, an entity Coughlin alleges is under the

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control of FSC. Coughlin’s Amended Complaint at paras. 18, 20 and 21). As a result, Coughlin

alleges FSC’s purchase of the Brantley Property through HE has breached a contractual obligation

to pay him a twenty-five percent and/or ten percent commission under the FSC “agreed commission

schedule”. Coughlin’s Amended Complaint at paras.21-25.

Even if the allegations of Coughlin’s Amended Complaint were true, which is denied by

Koerber, FSC and HE Coughlin fails to state a claim against Koerber, FSC and HE upon which

relief can be granted. Alternatively, for the reasons set forth herein, Koerber, FSC and HE are

entitled to judgment as a matter of law.

9. Breach of Contract (Coughlin’s Amended Complaint at paras. 27-28).

a. Koerber and HE. Coughlin has alleged that by virtue of having completed a FSC

training course and having “negotiated a deal” for the purchase of the Brantley Property, he is

entitled to a commission under the FSC “agreed commission schedule.”

It is black letter law that to be held liable for breach of a contract the alleged breaching party

must be a party to the contract that is allegedly breached. Based on Coughlin’s allegations, his breach

of contract claims against HE and Koerber should be dismissed as a matter of law. Moreover, under

Mississippi law, only the principal under a contract – and not its agent – is liable for contractual

obligations. Allen, et al. v. Tyson Foods, Inc., et al., 153 F.Supp.2d 886, 991 (S.D. Miss. 2001); See,

Rogers v. Nationwide Property & Casualty Ins. Co., 2006 WL 1328887 *2 (S.D. Miss. May 12,

2006)(“Mississippi law is clear: an agent of a disclosed principal is not a party to his principal’s

contract and cannot be liable for its breach.”). As a result, even if FSC has breached a contractual

obligation to pay Coughlin a commission as alleged, which is denied, Koerber, as an agent of FSC,

clearly would not have ANY liability for such a breach.

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b. FSC and HE.

(1) Coughlin’s Failure to State a Claim.

Coughlin has alleged that he “negotiated a deal with Jeff Brantley for the sale of his home”,

that, based on such negotiations, FSC subsequently purchased the Brantley Property through HE and

that FSC has breached a contractual duty to pay Coughlin a commission arising out of such purchase.

Coughlin’s allegations clearly fall within the definition of real estate brokerage activities

under Mississippi law. Miss. Code Ann. § 73-35-3(1) provides,

[t]he term “real estate broker”... shall include all persons, ... who for a fee, commission or
other valuable consideration, or who with the intention or expectation of receiving or collecting the
same, list, sell, purchase ... any real estate ... ; or who negotiate or attempt to negotiate any such
activity; ... ; or who direct or assist in the procuring of a purchaser or prospect calculated or intended
to result in a real estate transaction.

Miss. Code Ann. § 73-35-3 (1972, as amended). Moreover, in addition to criminal and/or civil

penalties, Miss Code Ann. § 73-35-31 provides that no person can recover a commission for real

estate brokerage activities, as described in Miss. Code Ann. § 73-35-3 (1), unless such a person is

licensed as a real estate broker under Mississippi law.

Miss. Code Ann. § 73-35-33(1) provides in pertinent part,

No person ... shall bring or maintain an action in any court of this state for the recovery of
a commission ... for any act done or services rendered, the doing or rendering of which is prohibited
under the provisions of this chapter for persons other than licensed real estate brokers, unless such
person was duly licensed hereunder as a real estate broker at the time of the doing of such act or the
rendering of such service.

Miss. Code Ann. § 73-35-33(1)(1972, as amended).

Coughlin has neither alleged nor is he, in fact, a licensed real estate broker under the laws

of the State of Mississippi. As a result, since Coughlin is asserting a breach of contract claim for the

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payment of a commission arising out of the performance of real estate brokerage activities

(negotiating for the purchase of the Brantley Property by FSC), as defined by Mississippi law,

Coughlin is precluded from maintaining this action against FSC and HE.

In addition to the foregoing facts related to Coughlin’s breach of contract claim, Coughlin

alleges that FSC requires that its agents list their names on the real estate contracts as buyer.

Coughlin’ Amended Complaint as para. 19.

What Coughlin fails to perceive is that had he actually entered into a contract with Brantley

for the purchase of the Brantley Property, he may have actually stated a claim that would have

required FSC and HE to file a summary judgment motion to defeat. Miss. Code Ann. § 73-35-3(5)

provides, “[e]xempt from the licensing requirements of this chapter (the Mississippi real estate

broker provisions) shall be any person ... who, as a bona fide owner, shall perform any aforesaid act

(real estate brokerage activities) with reference to property owned by them ...”.

(2) The Failure of Coughlin’s Claim Under the Summary Judgment Standard.

As set forth herein, Coughlin boldly asserts that he “negotiated a deal with Jeff Brantley

for the sale of his home and turned all of the paperwork over to FranklinSquires”. Coughlin’s

Amended Complaint at para. 18.

Coughlin’s assertion is demonstratively untrue and the Defendants, as well as the Federal

Rules of Civil Procedure, demand that Coughlin come forward with evidence in support of his

assertion. Specifically, while Coughlin and one of his relatives, Mr. Brian Cronin, attempted to

negotiate with Brantley for the purchase of the Brantley Property, NO AGREEMENT was ever

reached. See affidavits of Brian Cronin and Judy Wooten Evans, Brantley’s real estate broker,

including the exhibits thereto, attached as Exhibits B and C, respectively, to HE’s Motion to Cancel

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and/or Expunge Lis Pendens Notice incorporated herein by reference pursuant to F.R.C.P. 10.

Since Coughlin can neither legitimately attempt to establish he reached an agreement with

Brantley for the purchase of the Brantley Property nor produce a purchase contract in his name,

which Coughlin states is “required” under the FSC program (Coughlin’s Amended Complaint at

para. 19), Coughlin’s breach of contract claim fails and the Defendants are entitled to a judgment

as a matter of law for these reasons alone.

10. Detrimental Reliance (Coughlin’s Amended Complaint at paras. 29-34).

The Courts do not recognize an independent cause of action for detrimental reliance and the

undersigned counsel has found no Mississippi law that supports any such action. See, Aero Taxi-

Rockford v. General Motors Corporation, 2006 WL 1479915 *9 (Mich. Ct. App. May 30, 2006);

Adams v. Washington Group, LLC, 2006 WL 1042358 *1 (N.Y. Sup. Ct. April 19, 2006); and

Interstate Gas Supply, Inc. v. Calex Corp., 2006 WL 328679 * 21 (Ohio Ct. App. Feb. 14,

2006)(“detrimental reliance arises as an element of various causes of action (e.g. promissory

estoppel, misrepresentation) but is not a cause of action unto itself.”)(emphasis added by the court).

As a result, Coughlin’s detrimental reliance claim fails as a matter of law.

11. Unjust Enrichment (Coughlin’s Amended Complaint at paras. 35-36).

The doctrine of unjust enrichment or recovery in quasi contract applies to situations where
there is no legal contract and the person sought to be charged is in possession of money or property
which in good conscience and justice he should not retain but should deliver to another.

Kersey v. Fernald, 911 So. 2d 994, 997 (Miss. Ct. App. 2005).

Coughlin alleges that “[a]s a result of not paying Plaintiff the money he earned [under the

FSC agreed commission schedule] in bringing the Brantley deal to ... [the Defendants], [the

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Defendants] have been unjustly enriched by keeping the monies earned by Plaintiff for itself.”

Coughlin’s Amended Complaint at para. 35.

Coughlin’s unjust enrichment claim has absolutely no merit. Coughlin’s claim presupposes

that he reached an agreement with Brantley which, as demonstrated by the Evans and Cronin

affidavits, he did not and that the Defendants kept the commission Coughlin “earned” under his

contract with FSC, thereby “unjustly enriching” themselves at Coughlin’s expense. Simply put,

Coughlin cannot attempt to establish a quasi contract claim based upon the premise that the

Defendants breached an actual contract to pay commissions.

Not only has Coughlin failed to state a claim for unjust enrichment, there is no conceivable

argument that has any basis in fact that any of the Defendants have been unjustly enriched. As

Coughlin has admitted, the Brantley Property was completely destroyed by fire in July of 2006.

Coughlin’s Amended Complaint at para. 26. As a result, HE has no way to ever realize the benefit

of any equity that existed in the Brantley Property due to the destruction thereof. Simply put, none

of the defendants have been unjustly enriched by retaining any money or property that rightfully

belongs to Coughlin. The Defendants also incorporated herein by reference, pursuant to F.R.C.P. 10,

their response to Coughlin’s motion for leave to amend complaint at para.12.

12. Fraud (Coughlin’s Amended Complaint at paras. 37-43).

a. Coughlin’s Failure to State a Claim.

Coughlin alleges that Koerber and FSC made representations to Coughlin that if he “brought

a property” to FSC then he would be paid a fee for “bringing that property” to FSC, that Coughlin

“brought” the Brantley Property to FSC and that the Defendants have “wholly failed” to pay any fee

to Coughlin. Coughlin’s Amended Complaint at paras. 37-39.

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Allegations of fraud must be pleaded with particularity. F.R.C.P. 9(b). To plead fraud with

the necessary specificity, Coughlin was required to specify the statements of fact contended to be

fraudulent, identify the speaker, state when and where the statements were made, and explain why

the statements were fraudulent. See Williams v. WMX Tech., Inc. 112 F. 3d 175, 177 (5th Cir. 1997).

Moreover, fraudulent representations upon which a party may predicate a demand for relief must

relate to past or presently existing facts and cannot be predicated upon statements which are

promissory in their nature when made and which relate to future actions or conduct, except in some

cases when a contractual promise is made with the present undisclosed intention of not performing

it. Singing River Mall Co. v. Mark Fields, Inc., 599 So. 2d 938, 945 (Miss. 1992); Bank of Shaw v.

Posey, 573 So. 2d 1355, 1360 (Miss. 1990).

Coughlin has neither plead his fraud claim with the particularity required by F.R.C.P. 9(b)

nor, as a matter of law, stated a claim for fraud against any of the Defendants. Coughlin has wholly

failed to allege when and where Koerber and/or FSC allegedly made the statements Coughlin asserts

to be fraudulent. Further, Coughlin’s asserted misrepresentation, that if he “brought a property” to

FSC he would be paid a fee, is promissory in nature and does not relate to an allegedly past or

existing fact. Moreover, none of these allegations even come close to even attempting to allege a

fraud claim against HE. As a result, Coughlin’s fraud claim fails as a matter of law as to all of the

Defendants.

b. The Failure of Coughlin’s Fraud Claim Under the Summary Judgment Standard.

To the extent Coughlin’s fraud claim is that he “brought” the Brantley Property to FSC

(meaning he entered into a contract with Brantley for the purchase of the Brantley Property), that

FSC failed to pay him a commission under the FSC agreed commission schedule and that FSC

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reached the alleged commission agreement with Coughlin with the intent not to perform, such claim

has no basis in fact. There can be no legitimate dispute that Coughlin NEVER reached an agreement

with Brantley to purchase the Brantley property. See the Cronin and Evans affidavits incorporated

herein by reference. Under such circumstances, the Defendants are entitled to a judgment as a matter

of law.

13. The Defendants respectfully request that the separate memorandum brief required by

the local rules be waived as the issues raised herein are straightforward and all of the authorities

relied upon by the Defendants are cited herein.

WHEREFORE, PREMISES CONSIDERED, Koerber, FSC and HE respectfully request the

Court to dismiss Coughlin’s claims against them with prejudice, that judgment be entered in favor

of Koerber, FSC and HE as a matter of law or, alternatively, that summary judgment be granted in

favor of Koerber, FSC and HE and that the Court award Koerber, FSE and HE any and all other

relief the Court deems appropriate.

Respectfully submitted this the 23rd day of April, 2007.

Defendants C. Rick Koerber,

FranklinSquires Companies, LLC
and Hill Erickson, LLC

BY: s/Eddie J. Abdeen (MSB#9321)

ONE OF THEIR ATTORNEYS

ATTORNEYS FOR DEFENDANTS:

EDDIE J. ABDEEN, ESQ. (MSB #9321)
Attorney at Law
Post Office Box 2134
Madison, Mississippi 39130
Telephone: 601-607-4750
Facsimile: 601-427-0040

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R. PAUL RANDALL, JR., ESQ. (MSB # 99960)

Willoughby, McCraney & Randall, PLLC
451 Northpark Drive, Suite A
Ridgeland, Mississippi 39157
Telephone: 601-956-2615
Facsimile: 601-956-2642

CERTIFICATE OF SERVICE

I, Eddie J. Abdeen, do hereby certify that I have this day served, via the ECF System, a

true and correct copy of the above and foregoing document to:

Darren J. LaMarca, Esq.

P.O. Box 131
Clinton, MS 39060
Counsel to Plaintiff

BY: s/Eddie J. Abdeen (MSB#9321)

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