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Kiebala v. Boris

United States District Court, N.D. Illinois, Eastern Division

February 14, 2017

GEORGE KIEBALA Plaintiff,
v.
DEREK BORIS, Defendant.

          MEMORANDUM OPINION AND ORDER

          Marvin E. Aspen United States District Judge.

         Presently before us is Defendant Derek Boris' motion to dismiss Plaintiff George Kiebala's pro se complaint for failure to state a claim upon which relief may be granted. (Dkt. No. 7.) For the reasons stated below, we grant Boris' motion to dismiss Counts III and V, without prejudice. Further, we allow Curvy Road Holdings, LLC (“Curvy Road”) and Exotic Car Share, LLC (“ECS”), as real parties in interest, thirty days to ratify, join, or be substituted into this action and prosecute their claims for breach of the non-disclosure and revenue share agreements, and for tortious interference with business expectancy. If they fail to do so, those claims are dismissed with prejudice.

         FACTUAL BACKGROUND

         At the motion to dismiss stage, we accept all well-pleaded factual allegations as true and draw all inferences in the plaintiff's favor. Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011). Kiebala is the owner of Curvy Road, which “provides time ownership of high-end automobiles to customers who purchase . . . the right to drive [those] vehicles for a number of weeks per year.” (Compl. ¶ 8.) Curvy Road's vehicles are generally owned by individuals who permit Curvy Road to use them as part of its “time-ownership” program, in exchange for a “portion of the revenue received by Curvy Road for the use of the vehicles.” (Id.) Kiebala also owns ECS, a similar business that “offers individual weeks and weekends of vehicle usage for a fee.” (Id. ¶ 9.) ECS is a “Chicago-only membership club” and, unlike Curvy Road, generally owns the vehicles offered to customers. (Id.)

         In May 2009, Kiebala and Boris began to discuss placing one of Boris' vehicles into Curvy Road's program. (Id. ¶ 11.) Kiebala requested Boris sign a non-disclosure agreement, which he did on July 29, 2009, “agreeing to keep confidential Curvy Road's offering materials and any and all additional information pertaining to Curvy Road, including but not limited to Curvy Road's business practices, policies, procedures, strategies and financial information.” (Id. ¶ 13.) On September 15, 2009, Boris and Kiebala executed a “revenue share agreement, ” providing that Boris would “receive royalty payments based on a portion of the amount paid by members to Curvy Road for use of [his vehicle].” (Id. ¶¶ 14-15.) The revenue share agreement further provided that it would renew every six months “unless either party notifies the other party in writing of their intent not to renew prior to the end of the term.” (Id., Ex. B at Pg. ID#: 23.) Boris placed his vehicle into Curvy Road's program on November 18, 2009. (Id. ¶ 17.)

         Kiebala alleges that Boris “abruptly withdrew” his vehicle from Curvy Road's program in May 2010 without providing notice of his intent not to renew the revenue share agreement. (Id. ¶¶ 21-22.) After returning Boris' vehicle, Kiebala issued a final payment to Boris. (Id. ¶ 25.) Kiebala's final check to Boris “did not clear, ” but Kiebala alleges he “attempt[ed] to resolve the payment issue” and contacted Boris concerning the final payment, “via email, on July 16, 2010; July 20, 2010; July 22, 2010; and August 6, 2010.” (Id. ¶ 26.) Kiebala alleges Boris' withdrawal without providing advance notice was a breach of their revenue share agreement. (Id. ¶¶ 66-70.)

         Kiebala alleges that Boris subsequently made several internet postings on consumer review websites containing false and misleading statements concerning Kiebala's business practices, and containing proprietary information in violation of the non-disclosure agreement Boris signed. A February 1, 2011 posting stated that both Curvy Road and ECS lease their cars from owners for “negotiated commissions, ” that Kiebala “neglected to pay thousands of owed commissions, ” and that he attributed his inability to pay those commissions to his “wife ‘running' his bank account.” (Id. ¶ 29; Id., Ex. C at Pg. ID#: 25.) That post further stated that Curvy Road “is a FRAUD company, ” that Kiebala “cannot be trusted, . . . has lied repeatedly and . . . will steal your money.” (Id.) Kiebala states that “[t]hese libelous statements also were posted earlier in December, 2010 on the website scamexposure.com.” (Id. ¶ 39.)

         A July 20, 2011 posting stated that Curvy Road and ECS “rents some of its exotic cars from individual owners, . . . and pays out a commission based off of actual customer use, ” that the companies failed to pay “THOUSANDS of owed commissions” because Kiebala's wife took his money, that “lying and stealing are part of George Kiebala, Curvy Road, and Exotic Car Share's daily management.” (Id., Ex. E at Pg. ID#: 29.) That posting also referred to Kiebala as a “thief, ” and stated that he and his companies “simply cannot be trusted.” (Id.) Kiebala alleges that Boris updated this posting with identical information on July 22, 2015 and posted a separate, but identical, statement on July 21, 2015. (Compl. ¶¶ 41, 49.) Finally, Kiebala alleges that Boris has “threatened to post further statements on ‘various websites.'” (Id. ¶ 54.)

         Kiebala sued Boris on July 22, 2016, alleging Illinois state law claims for breach of the non-disclosure agreement, breach of contract, libel, tortious interference with business expectancy, and intentional infliction of emotional distress. Boris moved to dismiss Kiebala's complaint on September 19, 2016.

         LEGAL STANDARD

         Boris' motion to dismiss for failure to state a claim upon which relief may be granted is governed by Rule 12(b)(6) of the Federal Rules of Civil Procedure.[1] “The purpose of the motion to dismiss is to test the sufficiency of the complaint, not decide the merits.” Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990) (internal quotation marks omitted) (quoting Triad Assocs., Inc. v. Chi. Hous. Auth., 892 F.2d 583, 586 (7th Cir. 1989)). Dismissal pursuant to Rule 12(b)(6) is proper only if a complaint lacks enough facts “to state a claim [for] relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949-50 (2009) (internal quotation marks omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974 (2007)); accord. Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d 614, 618-19 (7th Cir. 2007). The plausibility standard “is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft, 556 U.S. at 678, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. at 1964-65). That is, while the plaintiff need not plead “detailed factual allegations, ” the complaint must allege facts sufficient “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. at 1964-65.

         ANALYSIS

         I. Breach of Non-Disclosure and Revenue Share Agreements (Counts I and II)

         Boris first argues that Kiebala's claims for breach of the non-disclosure agreement and breach of the revenue sharing agreement (Counts I and II) must be dismissed because Curvy Road, but not Kiebala, is a party to those contracts. Kiebala contends, though, that he may maintain an action for those alleged breaches because they “directly damaged [him] by sharing his business model online, visible to all competitors, ...


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