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District Court ruling on XEREAS v. HEISS et. al. motion to dismiss

District Court ruling on XEREAS v. HEISS et. al. motion to dismiss

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Published by c_heller
Signed by Judge Richard W. Roberts on 3/27/13.
Signed by Judge Richard W. Roberts on 3/27/13.

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Published by: c_heller on Apr 04, 2013
Copyright:Attribution Non-commercial

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05/28/2014

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UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
 ______________________________
) JOHN XEREAS,))Plaintiff,))v.)Civil Action No. 12-456 (RWR))MARJORIE HEISS, et al.,))Defendants.) _______________________________)MEMORANDUMOPINION AND ORDER
Plaintiff John Xereas brings this action against MarjorieHeiss, Geoffrey Dawson, Riot Act D.C., LLC (“the LLC”), andSquiid, Inc., alleging claims of trademark infringement, unfaircompetition, conversion, breach of contract, breach of theimplied duty of good faith and fair dealing, fraudulentinducement, conspiracy, tortious interference, unjust enrichment,a violation of the Anti-Cybersquatting Consumer Protection Act(“ACPA”), 15 U.S.C. § 1125(d), and defamation. The defendantsmoved to dismiss eight of Xereas’s counts in the amendedcomplaint under Federal Rule of Civil Procedure 12(b)(6) forfailure to state claims for relief. The claims of breach of theimplied duty of good faith and fair dealing against Dawson andHeiss, unjust enrichment against the LLC and cyber-squattingagainst Dawson, Heiss and the LLC are adequately pled, and themotion to dismiss will be denied as to those claims but grantedas to the remaining challenged claims.
 
-2-BACKGROUNDIn 2005 and 2009, Xereas registered a group of domain namesusing the Riot Act comedy name, including “riotactcomedy.com.Am. Compl. 14, 23. He conducted his entertainment businessfor years using those names. Id. 18-19, 23. In May 2010,Xereas, Dawson and Heiss agreed to launch a new comedy club inWashington, D.C. called the Riot Act Comedy Club. Id. 30.Xereas, Dawson and Heiss executed an Operating Agreement and, inNovember 2010, an Amended Operating Agreement to establish theLLC. Id. 32-35, Ex. 13, Am. and Restated Operating Agreementof Riot Act DC, LLC (“Am. Operating Agreement”). After formingthe LLC, Dawson, Heiss and Xereas created a Business Plan. Id.36-38, Ex. 14, Business Plan for Start Up Business for RiotAct Comedy Theater (“Business Plan”). Starting in December 2010,Xereas served as the clubs general manager and worked in avariety of roles in preparing for the clubs opening andthereafter. Id. 38, 44, 48. In January 2011, the LLC hiredSquiid to create a website for Xereas’s domain name“riotactcomedy.com.Id. 40. In November 2011, Xereascompleted paying his $100,000 capital contribution to the LLC.Id. 45, 54. Dawson and Heiss agreed to compensate Xereas at anannual salary of $42,000 starting in December 2011. Id. 56.In January 2012, Dawson and Heiss removed Xereas fromhismanagement role and, without Xereas’s knowledge or approval,instructed Squiid to revise the domain name registration
 
-3-information for “riotactcomedy.com” to transfer ownership of thedomain names to the LLC. Id. 58, 60.In March 2012, Xereas filed his complaint, and later, hefiled an eleven-count amended complaint which includes claims of unlawful conversion and an ACPA violation against all defendants,id., Counts IV, X; unjust enrichment claims against Dawson, Heissand the LLC, id., Count IX; and breach of contract, breach of theduty of good faith and fair dealing, fraudulent inducement,conspiracy to defraud, tortious interference, and defamationclaims against Dawson and Heiss, id., Counts V-VIII, XI.
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 Dawson, Heiss and the LLC moved to dismiss under Rule 12(b)(6)for failure to state a cause of action the unlawful conversion,breach of contract, fraudulent inducement, conspiracy to defraud,tortious interference, unjust enrichment, ACPA, and defamationclaims. Squiid moved to dismiss under Rule 12(b)(6) for failureto state a cause of action the unlawful conversion and ACPAclaims against Squiid.DISCUSSIONIn considering a motion to dismiss under Rule 12(b)(6) forfailure to state a claim, a court accepts well-pleaded factualallegations in the complaint as true and interprets themin thelight most favorable to the plaintiff. Howard Univ. v. Watkins,857 F. Supp. 2d 67, 71 (D.D.C. 2012) (citing Warren v. District
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The amended complaint also includes common law and LanhamAct claims of trademark infringement and unfair competitionagainst Dawson, Heiss and the LLC. Am. Compl., Counts I-III.

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