United States District Court, D. Kansas
MEMORANDUM AND ORDER
KATHRYN H. VRATIL UNITED STATES DISTRICT JUDGE.
21, 2015, Pipeline Productions, Inc. and Backwood
Enterprises, LLC brought suit against Horsepower
Entertainment and The Madison Companies, LLC.
Complaint (Doc. #1). On June 19, 2017, OK
Productions, Inc. and Brett Mosiman joined as plaintiffs, and
plaintiffs named Bryan Gordon as an additional defendant.
Amended Complaint (Doc. #56). Plaintiffs assert
state law claims for breach of contract, breach of fiduciary
duty, fraud and tortious interference with a prospective
business advantage. Id. at ¶¶ 63-86. This
matter comes before the Court on defendants' Motion
To Dismiss For Failure To State A Claim. (Doc. #59)
filed July 10, 2017. For the reasons below, the Court
sustains defendants' motion in part.
ruling on a motion to dismiss under Rule 12(b)(6), Fed. R.
Civ. P., the Court assumes as true all well-pleaded factual
allegations and determines whether they plausibly give rise
to an entitlement of relief. Ashcroft v. Iqbal, 556
U.S. 662, 679 (2009). To survive a motion to dismiss, a
complaint must contain sufficient factual matter to state a
claim which is plausible - not merely conceivable - on its
face. Id. at 679-80; Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). In determining
whether a complaint states a plausible claim for relief, the
Court draws on its judicial experience and common sense.
Iqbal, 556 U.S. at 679. The Court need not accept as
true those allegations which state only legal conclusions.
bear the burden of framing their claim with enough factual
matter to suggest that they are entitled to relief; it is not
enough to make threadbare recitals of a cause of action
accompanied by conclusory statements. See Twombly,
550 U.S. at 556. Plaintiffs make a facially plausible claim
by pleading factual content from which the Court can
reasonably infer that defendant is liable for the misconduct
alleged. Iqbal, 556 U.S. at 678. Plaintiffs must
show more than a sheer possibility that defendant has acted
unlawfully - it is not enough to plead facts that are
“merely consistent with” defendant's
liability. Id. (quoting Twombly, 550 U.S.
at 557). A pleading which offers labels and conclusions, a
formulaic recitation of the elements of a cause of action or
naked assertions devoid of further factual enhancement will
not stand. Iqbal, 556 U.S. at 678. Similarly, where
the well-pleaded facts do not permit the Court to infer more
than the mere possibility of misconduct, the pleading has
alleged - but has not “shown” - that the pleader
is entitled to relief. See id. at 679. The degree of
specificity necessary to establish plausibility and fair
notice depends on context because what constitutes fair
notice under Rule 8(a)(2), Fed. R. Civ. P., depends on the
type of case. Robbins v. Oklahoma, 519 F.3d 1242,
1248 (10th Cir. 2008) (citing Phillips v. Cty. of
Allegheny, 515 F.3d 224, 232-33 (3d Cir. 2008)).
And Factual Background
Productions, Inc. is a Kansas corporation with its principal
place of business in Lawrence, Kansas. Doc. #56 at ¶ 7.
Backwood Enterprises, LLC is an Arkansas limited liability
corporation with its principal place of business in Lawrence,
Kansas. Id. at ¶ 8. Pipeline and Backwood
(collectively, “Pipeline”) produce live music and
music festivals. Id. Brett Mosiman and Nathan
Prenger conduct business for Pipeline and related entities,
including OK Productions.
Madison Companies, LLC is a Delaware limited liability
company with its principal place of business in Greenwood
Village, Colorado. Id. at ¶ 11. Horsepower
Entertainment, a Delaware limited liability company, is a
wholly-owned subsidiary of Madison with its principal place
of business in Greenwood Village, Colorado. Id. at
¶ 12. Madison and Horsepower (collectively,
“Horsepower”) provide venture capital. Bryan
Gordon is the principal of Horsepower. Id. at ¶
summarized, the complaint alleges as follows. On November 4,
2014, Mosiman proposed a joint venture agreement between
Pipeline and Horsepower for the limited purpose of owning and
producing the Thunder Mountain Festival
(“Thunder”). Id. at ¶ 32. On
November 4, 2014,  Horsepower, through its principal Gordon,
orally accepted a modified version of Mosiman's proposal.
Horsepower agreed that it would (1) pay Pipeline $750, 000
for a 51 per cent interest in Thunder, (2) provide $500, 000
of operating capital for Thunder and (3) pay Pipeline $80,
000 to operate and produce Thunder. Id. at ¶
on the November 4 Agreement, Pipeline personnel spent more
than 4, 000 hours on Thunder from November of 2014 through
May of 2015. Id. at ¶ 37. Their efforts
included creating infrastructure, contracting with vendors,
setting up ticketing and marketing and promoting Thunder.
Id. Mosiman used his industry contacts to obtain
commitments from approximately 50 artists. Id. at
¶ 38. As part of its commitment to provide operating
capital, Horsepower provided $272, 000 to pay deposits for
music artists. Id. at ¶ 39. Pipeline kept
Horsepower informed about Thunder's progress and provided
daily reports about advance ticket sales. Id. at
on music industry expectations and ticket sales, Horsepower
forecasted that Thunder would generate a loss in 2015.
Id. at ¶ 47. In March and April of 2015,
Horsepower and Pipeline began to debate the terms of the
November 4 Agreement. Id. at ¶¶ 48-52.
Horsepower refused to fulfill its commitment to (1) provide
$268, 000 to produce Thunder, (2) fund its purchase of a 51
per cent interest in Thunder and (3) pay Pipeline $80, 000
for operating costs. Id. at ¶ 53. Despite
Pipeline's continued efforts, it cancelled Thunder.
Id. at ¶ 53. Around this time, defendants hired
some of plaintiffs' key employees, including Nate Prenger
and ticketing employees. Id. at ¶ 57.
April 15, 2015, Horsepower filed suit against Pipeline,
Mosiman and Prenger. Among other things, Horsepower sought a
declaratory judgment that it did not have any obligations
regarding the production of Thunder. Pipeline removed the
case to the United States District Court for the District of
Delaware. On December 4, 2015, that court dismissed
Horsepower's claims for lack of jurisdiction over the
parties or the case.
21, 2015, the week after it removed the Delaware case,
Pipeline sued Horsepower in this Court. On February 22, 2017,
the Court overruled Horsepower's motion to dismiss or to
transfer to the District of Delaware. See Memorandum And
Order (Doc. #37). On April 27, 2017, the Court overruled
Horsepower's motion for reconsideration. See
Memorandum And Order (Doc. #50).
19, 2017, Pipeline filed its amended complaint in this Court.
Doc. #56. Pipeline asserts breach of contract (Count 1),
breach of fiduciary duty related to a joint venture (Count
2), fraud (Count 3) and tortious interference (Count 4). Doc.
#56 at ¶¶ 63-86. The amended complaint added OK
Productions, Inc. and Mosiman as plaintiffs. Id. at
¶ 13. It also joined Gordon as defendant on