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Nianni, LLC v. Mitchell Fox

November 7, 2011

NIANNI, LLC, PLAINTIFF,
v.
MITCHELL FOX, DEFENDANT.



ORDER

This cause is before the Court on the Defendant, Mitchell Fox's ("Fox") Motion to Dismiss Complaint (Doc. 11) filed on August 1, 2011. The Plaintiff, Nianni, LLC ("Nianni") filed a Memorandum of Law in Opposition to Defendant's Motion to Dismiss (Doc. 12) on August 15, 2011. The parties consented to proceed before a United States Magistrate Judge for all proceedings. (Doc. 19).

I. Allegations in the Complaint (Doc. 1)*fn1

Nianni alleges that Fox started an internet-based business called "'emailtemplates.org'" in 2008. (Com.*fn2 ¶3). In August 2010, Fox advertised on "Flippa.com"*fn3 to sell his internet-based business. (Com. ¶4). Fox represented that his business, "'blossomed into a big money maker with around $42k in profit driven through the site over the past 6 month.'" (Com. ¶5). Fox represented that his business made approximately $7,000.00 per month profit from four (4) revenue sources: Affiliate Template Sales, Advertisement Sales, Website Rentals, and Custom E-mail Template Design Sales. (Com. ¶6). Fox claimed he never really had any "'slump[s] in purchases'" on "emailtemplates.org" and that this website business was "'an established, money making'" website that "'requires no work to earn the current income.'" (Com. ¶7). Fox supported his statements with documents such as a spreadsheet that showed monthly earnings from each revenue source since 2008 and a payment history for his sales between February and August 2010. (Com. ¶8). Nianni claims that Fox's statements about his website business were false and Fox falsified the documents that supported his revenue claims. (Com. ¶9). Relying on Fox's representations and documents, Nianni purchased the website, "emailtemplates.org" from Fox for $63,000.00. Since purchasing the website, Nianni has increased the traffic to the website, yet it only generates two to three hundred dollars a month. (Com. ¶11).

In Count I, Nianni asserts that Fox violated the Computer Fraud and Abuse Act, 18 U.S.C. §1030 by knowingly making false statements and using falsified documents in order to defraud Nianni. (Com. ¶14). Nianni claims that Fox knowingly used and accessed Flippa.com's website and computers without authority or in excess of his authority to transmit fraudulent statements and documents to unsuspecting purchasers. (Com. ¶15). Nianni asserts that Fox received in excess of $63,000.00 from Nianni causing Nianni to lose in excess of $5,000.00 in any one-year period. (Com. ¶16).

In Count II, Nianni asserts that Fox made fraudulent misrepresentations about the success of "emailtemplates.org" including the amount of revenue and profit that the website would generate in a month. (Com. ¶20). Nianni claims that Fox knowingly posted on Flippa.com false representations and altered documents such as a spreadsheet to show misleading monthly earnings to induce Nianni to purchase emailtemplates.org. (Com. ¶21, 22, 23). As a result, Nianni suffered damages based upon his reliance on these false statements and documents. (Com. ¶24).

In Count III, Nianni alleges that Fox made negligent misrepresentations which were false and misleading concerning the success of emailtemplates.org including that it had generated $7,000.00 a month in profits for the six months prior to the sale. (Com. ¶27). Fox should have known these representations were false, and Nianni suffered damages as a result of these negligent misrepresentations (Com. ¶29).

In Count IV, Nianni alleges that Fox violated Florida' Deceptive and Unfair Trade Practices Act Fla. Stat. §501.201-501.213. Nianni contends that Fox solicited, advertised, and sold emailtemplates.org using Flippa.com which constitutes trade. (Com. ¶32). Fox willfully engaged in deceptive and unfair trade practices by providing false and misleading information including statements and documents concerning the website's revenue. (Com. ¶33). Nianni claims that Fox knew or should have known that his conduct was prohibited by Florida' Deceptive and Unfair Trade Practices Act. (Com. ¶34). As a result of Fox's actions, Nianni suffered damages. (Com. ¶36).

II. Standard for a Motion to Dismiss

In deciding a motion to dismiss for failure to state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6), the Court must accept as true all factual allegations in the Complaint. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). The Court must construe the allegations in the light most favorable to the plaintiff. Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006). To survive a motion to dismiss, a plaintiff's complaint must include "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. 1937, 1949 (2009), Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (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." Iqbal, 129 S.Ct. at 1949 (citations omitted). The threshold to survive a motion to dismiss is exceedingly low, however, a plaintiff's obligation to provide the "grounds" of his entitlement to relief requires more than "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555.

III. Analysis

Fox asserts that all of the Counts in the Complaint (Doc. 1) should be dismissed.

A. Count I, The Federal Computer Fraud and Abuse Act

Fox asserts that Nianni failed to plead sufficient facts to state a cause of action under the Federal Computer Fraud and Abuse Act, 18, U.S.C. ยง1030. Nianni argues that it has stated a claim under Section (a)(4) of the Computer Fraud and ...


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