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Genesis Capital Ventures, LLC v. Restore With Apex, Inc.

United States District Court, D. Colorado

October 18, 2017

GENESIS CAPITAL VENTURES, LLC, a Colorado limited liability company, Plaintiff,
v.
RESTORE WITH APEX, INC., d/b/a APEX RESTORATION DKI, a Tennessee corporation, and GREGORY DRIVER, an individual, Defendants.

          MEMORANDUM OPINION AND ORDER

          LEWIS T. BABCOCK, JUDGE

         This contract dispute is before me on a motion to dismiss by Defendants Restore With Apex, Inc. (“Apex”) and its CEO Gregory Driver. Mr. Driver moves to dismiss several of the claims against him under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that he is not a party to the contract, that he did not personally guarantee Apex's performance, and that the claims violate Colorado's statute of frauds and its parol evidence rule. Both Apex and Mr. Driver move to dismiss the fraud in the inducement claim under Rule 12(b)(6), arguing it is barred by Colorado's economic loss rule, impermissible because the contract is fully integrated, and not pleaded with adequate particularity under Rule 9(b) of Federal Rules of Civil Procedure. Plaintiff Genesis Capital Ventures LLC (“Genesis) opposes the motion.

         As I describe below, I disagree with Mr. Driver and Apex's arguments. The form of Mr. Driver's signature on the contract indicates he may be personally liable on the contract to the same extent that Apex is, and neither the parol evidence rule nor the statute of frauds alter this conclusion. And Colorado law permits a fraud in the inducement claim despite its economic loss rule, even if the parties signed a fully integrated contract, because a fraud in the inducement claim arises from the independent tort duty to refrain from making material misrepresentations, not from the terms of the contract itself. I accordingly DENY the motion to dismiss.

         I. BACKGROUND

         The following allegations are taken from the Complaint (ECF No. 3), unless otherwise noted.

         Genesis funds the roofing and restoration industries. Essentially, Genesis pays a contractor up front for the costs of a project, and in exchange, it, rather than the contractor, receives payment for work completed on the project. Genesis funded Apex's restoration of a facility in Alabama owned by Giles & Kendall, Inc. But Apex never got the proper licenses to conduct the restoration of the Alabama facility, and Giles & Kendall refuses to pay for the unlicensed work Apex completed, which means that Genesis has not been repaid for the funding it provided for the Alabama facility.

         The terms of the funding agreement between Apex and Genesis are described in a “Platinum Receivable Management Program” contract (the “PRMP contract”), which was drafted by Genesis. (PRMP contract at 1, ECF No. 1-5.) The contract itself states it is between “Genesis Capital Ventures, LLC” and “Restore with Apex Inc. DBA Apex Restoration DKI.” (Id. at 1.) The signature lines on the PRMP contract (id. at 7) are as follows:

         (Image Omitted)

         The contract itself does not mention either Jeffrey Posey, who presumably signed for Genesis, or Mr. Driver, who twice signed above the word “Contractor.” The contract does define “Contractor” as “Restore with Apex Inc. DBA Apex Restoration DKI.” (Id. at 1.)

         Genesis brought this suit against Apex and Mr. Driver in Colorado state court for breach of contract, breach of implied warranties, breach of personal guarantee, fraud in inducement, and unjust enrichment. Apex removed the case to this Court based on diversity jurisdiction, and Genesis moved to remand the case back to the Colorado state court. (ECF No. 20.) I denied the remand motion. (ECF No. 36.)

         I now turn to Apex and Mr. Driver's pending motion to dismiss several claims. (ECF No. 18.)

         II. RULE 12(B)(6) STANDARD

         A. General Standard

         Under Rule 12(b)(6), “[d]ismissal is appropriate only if the complaint, viewed in the light most favorable to plaintiff, lacks enough facts to state a claim to relief that is plausible on its face.” United States ex rel. Conner v. Salina Regional Health Center, 543 F.3d 1211, 1217 (10th Cir. 2008) (quotation omitted). A claim is plausible on its face “when the plaintiff pleads factual content that enables the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)). ...


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