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Mint Solar, LLC v. Sam's West, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

November 22, 2019

MINT SOLAR, LLC PLAINTIFF
v.
SAM'S WEST, INC. DEFENDANT

          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 ...


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