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Date: 03-30-2022
Case Style:
Case Number: 21-10137
Judge: Per Curiam
Court: United States District Court for the Northern District of Texas (Dallas County)
Plaintiff's Attorney:
Defendant's Attorney: Not Available
Description: Dallas, Texas commercial litigation lawyer represented Plaintiff, who sued Defendant on breach of contract and fraud theories.
After buying two large commercial properties, Shahram Afshani sued the sellers for breach of contract and fraud. He claimed that, during contract negotiations, the sellers had promoted the financial health of the properties’ big-box-store tenant, all the while knowing the tenant was in poor shape. The district court dismissed both claims, concluding Afshani pled no plausible breach and failed to allege fraud with the particularity demanded by Federal Rule of Civil Procedure 9(b). As to the contract claim, we agree with the district court and affirm. But as to the fraud claims, we disagree. On his third try, Afshani pled enough to clear the Rule 9(b) hurdle. So we reverse the dismissal of those claims and remand for further proceedings.
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We review de novo a Rule 12(b)(6) dismissal for failure to state a claim. Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc., 892 F.3d 719, 726 (5th Cir. 2018). “To survive a motion to dismiss, a complaint must contain sufficient factual matter which, when taken as true, states ‘a claim to relief that is plausible on its face.’” Ibid. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Dismissal is proper when, accepting all well-pled facts as true, the plaintiff has not stated a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake,” whereas “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b).
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Under the heightened pleading standard of Rule 9(b), a plaintiff “must state with particularity the circum-stances” of the allegedly fraudulent conduct—at minimum “the who, what, when, and where.” Williams v. WMX Techs., Inc., 112 F.3d 175, 178 (5th Cir. 1997); see also City of Clinton v. Pilgrim’s Pride Corp., 632 F.3d 148, 153 (5th Cir. 2010). “What constitutes particularity will necessarily differ with the facts of each case.” Benchmark Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003) (cleaned up). The district court gave Afshani two addi-tional chances to allege fraud with sufficient particularity before dismissing the claims with prejudice. Contrary to the court’s ruling, however, we think Afshani managed to clear the Rule 9(b) hurdle on his third try.
Outcome: In sum, contrary to the district court’s ruling, we conclude that Af-shani satisfied the heightened pleading standard of Rule 9(b).4
AFFIRMED IN PART; REVERSED AND REMANDED IN PART.
Plaintiff's Experts:
Defendant's Experts:
Comments: