Kiebala v. Boris

GEORGE KIEBALA, Plaintiff, v. DEREK BORIS, Defendant.

No. 1:16 CV 7478

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

September 29, 2017

Hon. Marvin E. Aspen

MEMORANDUM OPINION AND ORDER

MARVIN E. ASPEN, District Judge:

Presently before us is Defendant Derek Boris' motion to dismiss pro se Plaintiff George Kiebala's amended complaint. (Dkt. No. 32.) Also before us is Boris' motion for sanctions pursuant to Federal Rule of Civil Procedure 11. (Dkt. No. 34.) For the reasons stated below, we grant Boris' motion to dismiss the amended complaint with prejudice and deny the motion for sanctions.

BACKGROUND

We assume familiarity with the basic background facts of this case. See Kiebala v. Boris, No. 16 C 7478, 2017 WL 590287, at *1-2 (N.D. Ill. Feb. 14, 2017) (Dkt. No. 19); Kiebala v. Boris, No. 16 C 7478, 2017 WL 1161177, at *1-2 (N.D. Ill. Mar. 29, 2017) (Dkt. No. 27). At the motion to dismiss stage, we accept all well-pleaded factual allegations as true and draw all inferences in the plaintiff's favor. Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011).

The dispute between the parties concerns a "revenue share agreement" between Kiebala's luxury car share business, Curvy Road Holdings, LLC ("Curvy Road"), and Boris. Curvy Road provides "time ownership of high-end automobiles to members who purchase units of time-ownership for the right to drive these automobiles for a number of weeks each year." (Am. Compl. (Dkt. No. 31) ¶¶ 10, 16.) Pursuant to the agreement, Boris agreed to include his Lamborghini Gallardo in Curvy Road's program and to allow other members to drive it in exchange for royalty payments. (Id. ¶¶ 13-17.) Kiebala alleges Boris "abruptly withdrew" his vehicle from the program in May 2010 in breach of their agreement. (Id. ¶¶ 23-27.) Kiebala promptly returned Boris' vehicle, paid the cost of transporting the vehicle, prepared a "final recap of usages," and issued a payment to Boris on June 18, 2010. (Id. ¶¶ 26-28.) However, the royalty check did not clear, and thereafter, Kiebala communicated to Boris that he had payment issues along with "both medical and financial challenges." (Id. ¶¶ 29-33.)

Kiebala alleges Boris then began posting "a number of false and libelous statements" about Kiebala, Curvy Road, and Kiebala's other business, Exotic Car Share, LLC ("ECS"), on various consumer review websites from December 2010 through March 2017. (Id. ¶¶ 35-55.) Kiebala alleges the postings contained false and misleading statements concerning his business practices and revealed proprietary information in violation of the non-disclosure agreement Boris signed. Specifically, Kiebala asserts Boris posted a review on a consumer review website on December 21, 2010, stating Curvy Road and ECS lease their cars from owners for "negotiated commissions," that Kiebala "neglected to pay thousands of owed commissions," and that he attributed his inability to pay those commissions to his "wife 'running' his bank account." (Id. ¶ 36.) That post further stated that Curvy Road "is a FRAUD company," and that Kiebala "cannot be trusted, . . . has lied repeatedly and . . . will steal your money." (Id.) Kiebala alleges the same information was posted on different websites on December 22, 2010, and again on January 31, 2011 and February 1, 2011. (Id. ¶¶ 37-39).

Kiebala alleges that on June 26, 2011 and again on June 27, 2011, "Boris' campaign against Kiebala continued" with posts stating Curvy Road, ECS, and Kiebala "NEVER PAID ME," calling Kiebala "a lair [sic] and a cheat." (Id. ¶¶ 40-42.) The reviews further stated Kiebala "made promises that he did not keep," alleged he ran a "fraud business," and warned "DON'T time share or EVER EVER place your car into the program." (Id.)

On July 20, 2011, Boris again posted on consumer review websites, stating that Curvy Road and ECS failed to pay "THOUSANDS of owed commissions" because Kiebala's wife took his money and that "lying and stealing are part of George Kiebala, Curvy Road, and Exotic Car Share's daily management." (Id. ¶ 43.) That posting also stated "I would advise EVERYONE, customers and potential partners, to STAY AWAY from this thief, or you risk losing everything." (Id.) Kiebala alleges that Boris "took a break from his attacks" for several years, but contacted Kiebala by email in 2014, "seeking money and disputing Kiebala's calculations regarding the amounts owed," and threatening Kiebala "in an effort to extort money from him" by threatening to post "my review of your company on various websites." (Id. ¶¶ 44-47.) After Kiebala's "attempts to reach a settlement with Boris to resolve the parties' dispute" proved unsuccessful, Boris updated his July 20, 2011 review by posting identical information on consumer review websites on July 21, 2015, July 22, 2015, and March 20, 2017. (Id. ¶¶ 48-52.)

Kiebala brought this diversity action on July 22, 2016. On February 14, 2017, we granted Boris' motion to dismiss Kiebala's original complaint, finding his libel and intentional infliction of emotional distress claims time barred, and concluding Kiebala was not the real party in interest for his breach of non-disclosure agreement, breach of contract, and tortious interference claims. (Dkt. No. 19.) We allowed Kiebala's businesses, Curvy Road and ECS,until March 16, 2017 to ratify, join, or be substituted in this action to prosecute the breach of non-disclosure, breach of contract, and tortious interference claims. (Id. at 14-15.)

Kiebala moved for reconsideration of our February 14, 2017 Order and additionally sought leave to file an amended complaint. (Dkt. No. 21.) On March 29, 2017, we denied his motion for reconsideration, but allowed his alternative motion to file an amended complaint insofar as he could (1) "allege additional invasions from which independent intentional infliction of emotional distress claims may flow"; (2) allege additional information regarding Boris' internet postings, "which taken together could rise to the level of a timely 'continuing violation'"; and (3) allege a tortious interference with business expectancy claim that does not 'flow only from his status as a managing member of Curvy Road and ECS," and instead establishes he is the real party in interest. (Dkt. No. 27 at 6.)

On May 23, 2017, Kiebala filed an amended complaint. (Am. Compl. (Dkt. No. 31).) The amended complaint includes the same five counts as the original complaint: (1) breach of non-disclosure agreement; (2) breach of contract; (3) libel; (4) tortious interference with business expectancy; and (5) intentional infliction of emotional distress. (Id.) Boris moved to dismiss the amended complaint on June 13, 2017 and moved for Rule 11 sanctions on June 14, 2017. (Mot. to Dismiss (Dkt. No. 32); Mot. for Sanctions (Dkt. No. 34).)

ANALYSIS

I. MOTION TO DISMISS

Federal Rule of Civil Procedure 12(b)(6) governs Boris' motion to dismiss for failure to state a claim upon which relief may be granted. In ruling on a 12(b)(6) motion, the court accepts "the allegations in the complaint as true unless they are 'threadbare recitals of a cause of action's elements, supported by mere conclusory statements.'" Katz-Crank, 843 F.3d 641, 646(7th Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009)). The complaint must state a claim that is plausible on its face. Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007); St. John v. Cach, LLC, 822 F.3d 388, 389 (7th Cir. 2016). "A claim has facial plausibility 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, 129 S. Ct. at 1949. The plausibility standard "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. at 1949 (quoting Twombly, 550 U.S. at 555, 127 S. Ct. at 1964-65). That is, while the plaintiff need not plead "detailed factual allegations," the complaint must allege facts sufficient "to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S. Ct. at 1964-65.

A. Breach of Non-Disclosure Agreement, Breach of Contract, and Tortious Interference Claims

First, we may quickly dispatch Boris' motion to dismiss Counts I through III of the amended complaint, which re-allege Kiebala's claims for breach of the non-disclosure agreement, breach of contract, and tortious interference with business expectancy. Counts I through III are identical to Kiebala's original pleading, but the amended claims now include a disclaimer after the heading for each count stating "Dismissed pursuant to Court Order dated 2/14/17." (See Am. Compl. at 18-20.) Boris argues that the doctrine of res judicata bars these claims as we dismissed them in our February 14, 2017 Order. (Mot. to Dismiss at 4-5.) The dismissal became one with prejudice after the real parties in interest—Curvy Road and ECS—failed to ratify, join, or be substituted in this action. (Dkt. No. 19 at 7, 14-15.) Kiebala concedes these counts were dismissed with prejudice and indicates the disclaimers were intended reflect that understanding. (Pl.'s Resp. (Dkt. No. 49) at 3.) He suggests Boris misunderstood thedisclaimers and clarifies he is not attempting to "disregard the Court's orders, ignore the Court's authority, [or] reassert causes of action that the Court had plainly said could not go forward," and he has "no intention of attempting to revisit the dismissal of those causes of action." (Id.) Accordingly, there is no dispute that the breach of the non-disclosure agreement, breach of contract, and tortious interference with business expectancy claims should be dismissed with prejudice, as Kiebala did not intend to re-assert them. We therefore grant Boris' motion to dismiss Counts I through III of Kiebala's amended complaint, with prejudice.

B....