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Sleepy's, LLC v. Select Compfort Wholesale Corp.

February 8, 2008

SLEEPY'S, LLC, PLAINTIFF,
v.
SELECT COMFORT WHOLESALE CORPORATION, SELECT COMFORT RETAIL CORPORATION AND SELECT COMFORT CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Platt, District Judge.

MEMORANDUM AND ORDER

Before this Court is Defendant's Motion to Dismiss the Complaint in its entirety pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

For the following reasons, the Defendant's motion is DENIED with respect to Plaintiff's breach of contract, breach of the implied covenant, unfair competition, slander, and Lanham Act claims; andis GRANTED with respect to Plaintiff's contractual indemnification claim.

BACKGROUND

1. Plaintiff's Claims

Plaintiff, a Delaware limited liability company and marketer and seller of bedding products, asserts several claims against Defendant, a Minnesota Corporation and bedding manufacturer, in connection with a contractual agreement between the parties. The Complaint alleges breach of contract, slander per se (four claims), breach of the implied covenant of good faith and fair dealing, unfair competition, violation of the Lanham Act, and contractual indemnification. Defendant seeks dismissal of the Complaint in its entirety.

2. Facts

On June 17, 2005, Plaintiff and Defendant entered into a contract whereby Plaintiff agreed to market and sell products manufactured by Defendant in Plaintiff's stores. (Compl. ¶ 12.) Under the contract ("Dealer Agreement"), Defendant supplied Plaintiff with specifically identified products and Plaintiff was to market and sell those products. (Compl. ¶¶ 12-13.) The Dealer Agreement concluded on September 30, 2006, under its own terms. (Compl. ¶¶ 12-13.) However, the parties continued to perform under the Dealer Agreement until at least January 11, 2007. (Compl. ¶ 17.)

Plaintiff alleges that approximately between November 2006 and March 2007, Defendant made various slanderous statements regarding Plaintiff. (Compl. ¶¶ 52-64.) These statements were allegedly made to individuals hired by Plaintiff to shop at Defendant's retail outlets and report their experiences in order to evaluate the competitor's business practices. (Compl. ¶ 19.)

DISCUSSION

1. Standard for Motion to Dismiss Under Rule 12(b)(6)

Rule 12(b)(6) permits both partial and complete dismissal for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). When considering a motion to dismiss a complaint for failure to state a claim, the court must assume as true all allegations contained in the complaint. Chance v. Armstrong, 143 F.3d 698, 701 (2d Cir. 1998). However, it is "well settled that conclusory allegations merely stating general legal conclusions necessary to prevail on the merits of a claim, unsupported by factual averments will not be accepted as true." ECOR Solutions Inc. v. Pirnie, 2005 U.S. Dist. LEXIS 42993 (N.D.N.Y. July 29, 2005). On Rule 12(b)(6) motions, the court must assess only the legal feasibility of the complaint and whether plaintiffs have pled claims for which they are entitled to discovery. Sims v. Artuz, 230 F.3d 14, 20 (2d Cir. 2000); Chance, 143 F.3d at 701.

In addition, Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that a pleading set forth a short and plain statement of the claim showing that the pleader is entitled to relief and sufficient to provide a defendant with fair notice. Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 168 (1993) (quoting Conley v. Gibson, 355 U.S. 41 (1957)). However, the Supreme Court has held that a "plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and ...


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