United States District Court, D. Delaware
MARK ADAMS, AV SELECT INVESTMENTS, LLC, DR. GREGORY SIMONIAN, WADE HARTMAN, and FRANK EDWARD SMITH, Plaintiffs,
JOHN H. KLEIN, Defendant.
before me are Plaintiff Mark Adams' Motion to Dismiss
Counterclaims (D.I. 18) and Plaintiffs' Motion for Leave
to File Amended Complaint and Join Additional Defendant (D.I.
41). The Parties have briefed the issues. (D.I. 19, 30, 36,
41, 50). For the reasons discussed below, I will
grant-in-part and deny-in-part Plaintiff Adams' Motion to
dismiss and I will grant Plaintiffs' motion to amend the
Therapeutic Technologies ("CTT"), a Delaware
corporation and successor to Cambridge Therapeutic
Technologies NJ, was founded by Defendant John Klein. (D.I. 1
at ¶¶ 20-21, 34). Mr. Klein formed CTT in 2011 for
the purpose of developing and commercializing
"Compliance PACs," which are" calendarized
dosing packs for individual combinations of generic
prescription medications that are typically prescribed
together." (Id. at ¶¶ 21-22). Mr.
Klein served as CTT's CEO. (Id. at ¶ 19).
In December 2017, CTT's board of managers, by written
consent, terminated Mr. Klein's five-year employment
agreement "for cause." (Id. at ¶ 143;
D.I. 9 at CC ¶¶ 62-63). The Board's specific
rationale for its "for cause" determination was not
mentioned in the written consent document. (D.I. 9 at CC
¶ 65). Mr. Klein was replaced as CEO by Plaintiff Adams.
(D.I. 1 at¶ 146).
Complaint, filed on August 27, 2018, alleges claims related
to allegations that Mr. Klein solicited investments from
Plaintiffs in furtherance of "a fraudulent Ponzi
scheme." (Id. at ¶ 1). In response, Mr.
Klein filed an Answer responding to those claims and raised
two counterclaims against Plaintiff Adams. (D.I. 9).
Specifically, Mr. Klein alleges counts of abuse of process
and tortious interferences against Mr. Adams. (Id.
at CC ¶¶ 78-98).
Motion to Dismiss for Failure to State a Claim
reviewing a motion to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6), the Court must accept the
complaint's factual allegations as true. See Bell
Ail. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Rule
8(a) requires "a short and plain statement of the claim
showing that the pleader is entitled to relief."
Id. at 555. The factual allegations do not have to
be detailed, but they must provide more than labels,
conclusions, or a "formulaic recitation" of the
claim elements. Id. ("Factual allegations must
be enough to raise a right to relief above the speculative
level... on the assumption that all the allegations in the
complaint are true (even if doubtful in fact).").
Moreover, there must be sufficient factual matter to state a
facially plausible claim to relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility
standard is satisfied when the complaint's factual
content "allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. ("Where a complaint pleads
facts that are merely consistent with a defendant's
liability, it stops short of the line between possibility and
plausibility of entitlement to relief." (internal
quotation marks omitted)).
Federal Rule of Civil Procedure 15(a)(2), Plaintiffs may
amend their pleading with the court's leave. The
"grant or denial of an opportunity to amend is within
the discretion of the District Court. . . ." Shane
v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000). A court
should "freely give leave when justice so
requires." Fed.R.Civ.P. 15(a)(2). "Amendment,
however, is not automatic." Szubielski v.
Pierce, 152 F.Supp.3d 227, 232 (D. Del. 2016). Leave to
amend may be denied upon a showing of "undue delay, bad
faith or dilatory motive on the part of the movant, repeated
failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of
the allowance of the amendment, futility of amendment,
etc." Foman v. Davis, 371 U.S. 178, 182 (1962).
"Futility of amendment occurs when the complaint, as
amended, does not state a claim upon which relief can be
granted." Szubielski, 152 F.Supp.3d at 233.
Motion to Dismiss Counterclaims
Adams moves to dismiss each of Mr. Klein's counterclaims
for failure to state a claim. (D.I. 19 at 9-15). I will grant
Mr. Adams' motion as to the abuse of process claim and
deny his motion as to the tortious interference claims.
Abuse of Process Claim
Klein has failed to state a claim of abuse of process.
"[T]he essential elements of the tort are: 1) an
ulterior purpose; and 2) a wi[l]lful act in the use of the
process not proper in the regular conduct of the
proceedings." Nix v. Sawyer,466 A.2d 407, 412
(Del. Super. Ct. 1983). "Some form of coercion to obtain
collateral advantage, not properly involved in the proceeding
itself, must be shown, such as obtaining the surrender of
property or the payment of money by the use of the process as
a threat or club. In other words, a form of extortion is
required." Korotki v. Hiller & Arban, LLC,
2016 WL 3637382, at *2 (Del. Super. Ct. July 1, 2016). An
abuse of process claim can arise only by showing a
"perversion" of the process itself. Preferred
Inv. Servs., Inc. v. T& H Bail Bonds, Inc., 2013 WL
3934992, at *23 (Del. Ch. July 24, 2013), aff'd sub
nom. Preferred Inv. Servs., Inc. v. T & H Bail Bond,