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Joyce M. Rankine; Lawrence S. Stanton v. Roller Bearing Company of and America

January 2, 2013

JOYCE M. RANKINE; LAWRENCE S. STANTON, PLAINTIFFS,
v.
ROLLER BEARING COMPANY OF AND AMERICA, INC.; DOES 1 THROUGH 10, INCLUSIVE,
DEFENDANTS. ROLLER BEARING COMPANY OF AMERICA, INC., COUNTER CLAIMANT,
v.
JOYCE M. RANKINE; LAWRENCE S. STANTON, COUNTER DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez United States District Judge

ORDER: (1) GRANTING PLAINTIFFS'

MOTION TO DISMISS COUNTERCLAIMS FOR

FAILURE TO STATE A CLAIM [Doc. No. 13];

(2) DENYING AS MOOT PLAINTIFFS' MOTION FOR A MORE DEFINITE STATEMENT [Doc. No. 13];

(3) DENYING AS MOOT PLAINTIFFS' EX PARTE MOTION FOR ORDER PERMITTING ADDITIONAL BRIEFING [Doc. No. 37].

Presently before the Court are the motions of Plaintiffs Joyce Rankine ("Rankine") and Lawrence Stanton ("Stanton") (together "Plaintiffs") to dismiss the counterclaims of Defendant Roller Bearing Company of America ("Defendant") for failure to state a claim, and for a more definite statement. [Doc. No. 13, Pl.'s Mot.] Also before the Court is Plaintiffs' ex parte motion for an order permitting additional briefing. [Doc. No. 37, Pl.'s Ex Parte Mot.] For the following reasons, the Court GRANTS Plaintiffs' motion to dismiss, and DENIES AS MOOT Plaintiffs' motion for a more definite statement and ex parte motion for an order permitting additional briefing.

BACKGROUND

On July 20, 2012, Plaintiffs filed a complaint in state court against Defendant and unnamed defendants. [Doc. No. 1-1, Compl.] Defendant removed the action to this Court on August 22, 2012. [Doc. No. 1, Notice of Removal.] The complaint alleges two causes of action: (1) breach of contract of the Rankine Note and (2) breach of contract of the Stanton Note. [Doc. No. 1-1, Compl.] On September 4, 2012, Defendant filed its answer to the complaint, which asserts forty-five affirmative defenses. It also filed counterclaims against Plaintiffs. [Doc. No. 4, Answer; Doc. No. 5, Counterclaims.]

In its counterclaims, Defendant alleges the following facts. Plaintiffs Rankine and Stanton, in addition to Baxter Rankine (now deceased), entered into a stock purchase agreement ("Agreement") with Defendant to sell their outstanding shares of capital stock in All Power Manufacturing, Inc. ("All Power") in September 2006. [Doc. No. 5, Counterclaims ¶ 11; Ex. A, Agreement.] The parties executed two Non-Negotiable Promissory Notes in connection with the Agreement-one Note in favor of Rankine ("Rankine Note")*fn1 and one in favor or Stanton ("Stanton Note") (together "Notes"). [Id. ¶¶ 15, 20; Ex. B, Rankine Note; Ex. D, Stanton Note.] The principal amount of the Rankine Note is $600,000, plus interest. The principal amount of the Stanton Note is $150,000, plus interest. [Id.] Both Notes were originally payable in full on September 12, 2007. [Id.]

Defendant alleges that Paragraphs 1.3 of both the Rankine and Stanton Notes give Defendant the right to set off amounts coming due under the Notes against damages Defendant sustained as a result of any breach of representation or warranty by Plaintiffs in the Stock Purchase Agreement. [Doc. No. 5, Counterclaims ¶¶ 14, 16, 22; Ex. B, Rankine Note; Ex. D, Stanton Note.]

On or about August 11, 2009, Plaintiffs each executed an Amendment to Non-Negotiable Promissory Note ("Rankine Amendment" and "Stanton Amendment") to their respective Notes with Defendant. Each amendment made two changes to their respective Notes: (1) it amended Paragraph 1.1 to read "The principal amount of this Note, and all accrued and unpaid interest thereon, shall be due and payable on June 30, 2012;" and (2) it limited the right of set-off unless, prior to June 30, 2012, Defendant received a communication from the Mexican taxing authority stating that a tax was due. [Id. ¶¶ 18, 23; Ex. C, Amendment to Rankine Note; Ex. E, Amendment to Stanton Note.] Defendant alleges that the amendments were made to eliminate a dispute between the parties regarding potential Mexico income taxes, and that the amendments "provide[] a limitation on the Mexico tax set-off." [Id. ¶¶ 18, 23.]

Defendant further alleges that contrary to the Stock Purchase Agreement, Plaintiffs did not provide Defendant with all of the intellectual property assets that are necessary for the operation of All Power. [Id. ¶¶ 12, 26.] Defendant also alleges that before the Stock Purchase Agreement closed on September 12, 2006, Mary Alvarado and some "Key Employees," defined in the Stock Purchase Agreement to include Baxter Rankine, Charles Sharp, Tom Blanch, David McCulloch, David Rankine, and Jeffrey Rindskopf, misappropriated, used, disclosed, and obtained by improper means All Power's trade secret information, including its intellectual property assets. [Id. ¶¶ 34-35.] Defendant also alleges that these individuals divulged All Power's confidential and proprietary business information to third parties without All Power's consent. [Doc. No. 5, Counterclaim ¶¶ 34-35.] Defendant imputes knowledge of this alleged wrongdoing to Plaintiffs Rankine and Stanton and alleges that Plaintiffs did not disclose this information to Defendant. [Id. ¶¶ 36-37.]

Defendant's counterclaims allege the following causes of action: (1) breach of written contract; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) common law fraud in connection with the sale and purchase of securities; (5) breach of the implied covenant of good faith and fair dealing; (6) contractual indemnity; (7) equitable indemnity; (8) rescission of contract; and (9) declaratory relief. [Doc. No. 5, Counterclaims.]

On September 25, 2012, Plaintiffs filed the present motion to dismiss all of Defendant's counterclaims. [Doc. No. 13.] On December 11, 2012, Plaintiffs filed an ex parte motion for an order permitted additional briefing on Plaintiffs' ...


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