MICHAEL T. WILHITE, JR., et al., Plaintiffs-counterdefendants,
ACELL INVESTORS LIMITED, Defendant-counterplaintiff.
MEMORANDUM OPINION AND ORDER
SIDNEY A. FITZWATER, Chief District Judge.
Plaintiffs-counterdefendants ("counterdefendants") move to dismiss the amended counterclaims of defendant-counterplaintiff Acell Investors Limited ("Acell") under Fed.R.Civ.P. 9(b) and 12(b)(6) and to strike Acell's affirmative defenses under Rule 12(f). Acell has not responded to the motion. For the reasons that follow, the court grants in part and denies in part the motion to dismiss the counterclaims and denies the motion to strike the affirmative defenses.
In an October 22, 2013 order, the court granted counterdefendants' motion to dismiss Acell's counterclaims, concluding that counterdefendants had established that the counterclaims did not comply with Rule 9(b) or 12(b)(6). Except as to Acell's declaratory judgment counterclaim, the court granted Acell leave to replead. Acell then filed a second amended answer and counterclaims ("amended counterclaims"). Counterdefendants now move to dismiss the amended counterclaims under Rule 9(b) or Rule 12(b)(6) and to strike Acell's affirmative defenses under Rule 12(f). Acell has not responded to the motion.
The court turns first to Acell's counterclaim for fraud and fraud in the inducement.
The facts pertinent to this counterclaim are as follows. Acell is an Irish company formed for the purpose of owning subsidiaries with revolutionary technologies in the fields of composite materials and fire suppression. Around April 2012 plaintiff-counterdefendant Michael T. Wilhite, Jr. ("Wilhite") was appointed Chairman of the Board of Directors of Acell. During a November 2012 board meeting, allegedly as part of an ongoing conspiracy to cause Acell to become indebted and then to use that indebtedness to force a renegotiation of counterdefendants' shareholder control rights, Wilhite announced that Acell was experiencing a severe cash crisis and needed to raise additional capital. He proposed that he and the other counterdefendants loan Acell capital, and, if the funds were not repaid, that the debts be converted into additional stock. Allegedly in reliance on this statement, Acell's Board of Directors approved certain loans from counterdefendants. In November 2012, after Wilhite and counterdefendants had "effectively starved Acell of capital, " Wilhite presented the board with a " fait accompli. " Am. Counterclaims ¶ 109. Acell needed capital, and Wilhite and counterdefendants were prepared to loan Acell the money. Accordingly, Wilhite had the Board convert the prior approved loans to new terms, ratify various unauthorized loans, and approve new loans on extremely unfavorable terms, including that all of the loans be due in full on December 28, 2012. When Acell was unable to pay its debts as they became due, counterdefendants offered to forgo their loans on the condition that they be given control of the company; when Acell refused, they filed suit and now seek to obtain a judgment followed by foreclosure on Acell's assets.
Counterdefendants move to dismiss Acell's fraud counterclaim, contending that it has not been pleaded as Rule 9(b) requires. They maintain that Acell has failed to plead a single specific fraudulent statement or act by counterdefendants Michael D. Thompson, The Williamsburg Corporation, Patrick J. Thompson, or Stephen Jacobs and Stephen Lasher, the co-trustees of the Kenneth L. Schnitzer, Jr. 1989 Gift Trust; that Acell cannot recover against these individuals for the actions of Wilhite and others who are not parties to this lawsuit by making the conclusory allegation that such individuals were counterdefendants' "agents, " and that, with respect to Wilhite, the amended counterclaims fail to identify the "who, what, when, and where" to support the fraud and fraudulent inducement counterclaims, as Rule 9(b) requires.
The court begins by addressing Acell's fraud allegations against Wilhite.
The elements of common law fraud in Texas are:... (1) a material representation was made; (2) it was false when made; (3) the speaker either knew it was false, or made it without knowledge of its truth; (4) the speaker made it with the intent that it should be acted upon; (5) ...