United States District Court, W.D. Arkansas, Fayetteville Division
MEMORANDUM OPINION AND ORDER
Timothy L. Brooks United States District Judge.
Before
the Court is a Motion to Dismiss filed by Defendant Sam's
West, Inc. ("Sam's Club") (Doc. 10) along with
a Memorandum Brief in Support (Doc. 11). Plaintiff Mint
Solar, LLC ("Mint") filed a Response (Doc. 18) and
Sam's Club filed a Reply (Doc. 21). The issue is now ripe
for decision. For the reasons discussed below, the Court
DENIES Sam's Club's Motion to Dismiss (Doc. 10).
I.
BACKGROUND
The
dispute arises out of the Membership Professional Services
Agreement (the "Agreement") entered into by the
parties on September 28, 2017. (Doc. 18-1). Pursuant to the
Agreement, Mint was to be permitted to market its home
security systems and residential rooftop solar panels to
Sam's Club members by setting up informational booths
inside Sam's Club stores. In its Complaint (Doc. 2), Mint
describes the "dual intercept model," a plan
developed during its partnership with Sam's Club to sell
both solar services and home security services from the same
booths and by the same individuals. Mint alleges that this
plan received Sam's Club's "enthusiastic
approval." (Doc. 2, ¶ 17). Initially, Mint tested
the dual intercept model in twenty stores but had developed a
plan with Sam's Club representatives to expand over time
into 216 Sam's Club stores, which Mint terms the
"Rollout."
Mint
alleges, however, that its access to Sam's Club stores
pursuant to the Agreement was interrupted several times.
First, Mint was directed to withdraw in November 2017 while
Sam's Club obtained necessary internal approvals. Mint
reentered the stores in March 2018 but just one month later
was directed to stop selling home security systems. Sam's
Club asserted that Mint was authorized only to provide home
solar services and not security systems. In June 2018, Mint
was again directed to withdraw from Sam's Club stores
after a negative video about Mint's partnership with
Sam's Club was posted online by a former Mint employee
and issues arose with Mint's solar installations. A
meeting on June 22, 2018, appeared to resolve the conflict
with Sam's Club, but in a subsequent phone call, Mint was
directed not to reenter any stores. Finally, Mint received a
formal termination letter from Sam's Club on August 30,
2018.
Mint
brings a claim against Sam's Club for breach of the
Agreement. Specifically, Mint points to Section 1.3 of the
Agreement, which provides:
This
Agreement may be terminated as follows:
A. Either Party may terminate this Agreement at any time,
with or without cause, upon ninety (90) days' written
notice of said termination to the non-terminating Party.
B. Either Party may terminate this Agreement upon the other
Party's failure to cure a material breach or default, as
defined herein, within thirty (30) days of receiving written
notice of the same (the "Cure Period"). The Cure
Period shall begin to run on the day notice is provided to
the Party in breach or default consistent with the terms and
conditions of this Agreement governing notice, identifying
the deficiency complained of and relief sought. If the
material default is not cured within the Cure Period, the
non-breaching party may give notice of termination to the
other Party, such termination being effective thirty (30)
days from such notice (the "Transition Period").
During the Transition Period, the Parties agree to cooperate
in good faith in transferring the services provided herein to
another provider.
C. Either Party may terminate this Agreement at the end of
any Term by providing the other Party with written notice of
termination within 30 days' prior to the end of the Term.
(Doc. 18-1, p. 2). Mint alleges that Sam's Club breached
the Agreement by expelling Mint from Sam's Club stores
without the required notice and prohibiting Mint from
reentering the stores. Mint seeks damages for its lost
profits resulting from Sam's Club expelling Mint without
notice, its expenditures made in anticipation of the Rollout,
and appropriate attorneys' fees, costs, and interest. In
its Motion to Dismiss, Sam's Club argues that various
provisions of the Agreement bar each form of relief sought by
Mint and that Mint's Complaint therefore fails to state a
claim for damages and should be dismissed.
II.
LEGAL STANDARD
To
survive a motion to dismiss for failure to state a claim
under Rule 12(b)(6), a complaint must provide "a short
and plain statement of the claim that [the plaintiff] is
entitled to relief." Fed.R.Civ.P. 8(a)(2). The purpose
of this requirement is to "give the defendant fair
notice of what the . . . claim is and the grounds upon which
it rests." Erickson v. Partus, 551 U.S. 89, 93
(2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007)). The Court must accept all of a
complaint's factual allegations as true, and construe
them in the light most favorable to the plaintiff, drawing
all reasonable inferences in the plaintiffs favor. See
Ashley Cty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665
(8th Cir. 2009). In addition to the complaint's
allegations, the Court may consider "matters
incorporated by reference or integral to the claim, items
subject to judicial notice, matters of public record, orders,
items appearing in the record of the case, and exhibits
attached to the complaint whose authenticity is
unquestioned." Miller v. Redwood Toxicology
Lab., Inc., 688 F.3d 928, 931 (8th Cir. 2012)
(quoting 5B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1357 (3d ed.
2004)). For example, "[i]n a case involving a contract,
the court may examine the contract documents in deciding a
motion to dismiss." Stahl v. U.S. Dep't of
Agric, 327 F.3d 697, 700 (8th Cir. 2003).
The
complaint "must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is
plausible on its face.'" Ashcroft v. Iqbal,556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.
at 570). "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." Id. "A
pleading that offers 'labels and conclusions' or
'a formulaic recitation of the elements of a cause of
action will not do.' Nor does a complaint suffice if it
tenders 'naked assertion[s]' devoid of 'further
factual enhancement.'" Id. In other words,
while "the pleading standard that Rule 8 ...