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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
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`Plaintiff,
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`1:17-CV-1067-RP
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`§
`MARK BRADFORD,
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`v.
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`NATIONWIDE INSURANCE COMPANY
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`OF AMERICA; NATIONWIDE MUTUAL
`INSURANCE COMPANY; ON YOUR SIDE §
`NATIONWIDE INSURANCE AGENCY,
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`INC.; NATIONWIDE INSURANCE
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`COMPANY OF FLORIDA; NATIONWIDE
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`GENERAL INSURANCE COMPANY;
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`PCM LOGISTICS, LLC; AF BUSINESS
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`SERVICES, LCC; ISO CLAIMS SERVICES,
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`INC.; and AGENT DOES 1-999;
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`§
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`§
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`ORDER
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`Defendants.
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`Before the Court are motions to dismiss filed by Defendants Nationwide Insurance
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`Company of America; Nationwide Mutual Insurance Company; On Your Side Nationwide
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`Insurance Agency, Inc.; Nationwide Insurance Company of Florida; and Nationwide General
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`Insurance Company (collectively, “Nationwide”), (Dkt. 3), and Defendant ISO Claims Services, Inc.
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`(“ISO Claims”), (Dkts. 9, 10). Having considered the parties’ arguments, the record, and the relevant
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`law, the Court agrees that dismissal of Plaintiff’s claims is appropriate under Federal Rule of Civil
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`Procedure 12(b)(6).
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`I. BACKGROUND
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`Plaintiff Mark Bradford (“Bradford”) is a software developer who allegedly develops and
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`distributes products that create forms used in the home mortgage lending and insurance industries
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`(the “WinSketch products”). (Compl., Dkt. 1, at 7). According to Bradford, he owns the copyright
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`for a product called WinSketch Insurance, which he developed for Nationwide but which
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`1
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`Case 1:17-cv-01067-RP Document 21 Filed 05/31/18 Page 2 of 7
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`Nationwide lacks permission to use. (Id. at 7–8). Bradford alleges that Nationwide has and continues
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`to use WinSketch Insurance without a license. (Id. at 8). Bradford asserts causes of action against
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`Nationwide for tortious interference with contract and fraud, (id. at 8–9), and requests relief under
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`the Texas Deceptive Trade Practices Act (“DTPA”), Tex. Civ. Prac. & Rem. Code § 17.50(a)(2), as
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`well as 17 U.S.C. §§ 503 and 504, (id. at 11). Bradford’s complaint includes no allegations specific to
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`ISO Claims. Nationwide and ISO Claims each ask the Court to dismiss all of Bradford’s claims with
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`prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). (Nationwide Mot. Dismiss, Dkt. 3, at
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`20; ISO Claims Mem. Mot. Dismiss, Dkt. 10, at 12).
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`II. LEGAL STANDARD
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`Pursuant to Rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon
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`which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “To survive a Rule 12(b)(6) motion to dismiss,
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`a complaint ‘does not need detailed factual allegations,’ but must provide the plaintiff’s grounds for
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`entitlement to relief—including factual allegations that when assumed to be true ‘raise a right to
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`relief above the speculative level.’” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Bell
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`Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That is, “a complaint must contain sufficient factual
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`matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
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`U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
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`“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is
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`inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported
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`by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “[W]here the well-pleaded
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`facts do not permit the court to infer more than the mere possibility of misconduct, the complaint
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`has alleged—but it has not ‘show[n]’—-that the pleader is entitled to relief.” Id. at 679 (quotation
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`marks and citation omitted).
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`2
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`Case 1:17-cv-01067-RP Document 21 Filed 05/31/18 Page 3 of 7
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`III. DISCUSSION
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`A. Nationwide
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`1. Copyright infringement
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`Nationwide argues that Bradford fails to plausibly allege that it infringed Bradford’s
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`copyright to the WinSketch Insurance software. (Nationwide Mot. Dismiss, Dkt. 3, at 10–11). The
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`Court agrees. To prove a claim for copyright infringement, a plaintiff must establish: (1) ownership
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`of the copyrighted material and (2) copying by the defendant. Computer Mgmt. Assistance Co. v. Robert
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`F. DeCastro, Inc., 220 F.3d 396, 400 (5th Cir. 2000). To prove copying, a plaintiff must prove factual
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`copying and substantial similarity. Positive Black Talk Inc. v. Cash Money Records, Inc., 394 F.3d 357, 367
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`(5th Cir. 2004), abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010). A
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`plaintiff must also prove that a defendant used the accused copies in a manner described in 17
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`U.S.C. § 106. See Engenium Sols., Inc. v. Symphonic Techs., Inc., 924 F. Supp. 2d 757, 782 (S.D. Tex. 2013)
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`(“After establishing these threshold requirements, a plaintiff must prove that a defendant used the
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`accused copies in any of the ways described in Section 106 of the Copyright Statute.”) (citation and
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`quotation marks omitted); Playboy Enterprises, Inc. v. Webbworld, Inc., 991 F. Supp. 543, 551 (N.D. Tex.
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`1997), aff’d, 168 F.3d 486 (5th Cir. 1999) (“[The plaintiff] must establish that [the defendant] has
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`violated one or more of the five exclusive rights granted to a copyright holder [in Section 106].”).
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`Nationwide argues that Bradford failed to allege that it infringed any of the exclusive rights
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`defined in Section 106, which include:
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`(1)
`(2)
`(3)
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`to reproduce the copyrighted work in copies or phonorecords;
`to prepare derivative works based upon the copyrighted work; [or]
`to distribute copies or phonorecords of the copyrighted work to the public
`by sale or other transfer of ownership, or by rental, lease, or lending;
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`17 U.S.C. § 106. (Nationwide Mot. Dismiss, Dkt. 3, at 10). Bradford fails to address this
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`argument in his response. (See Resp. Nationwide Mot. Dismiss, Dkt. 6, at 2–4). In his
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`complaint, Bradford alleges that Nationwide has used WinSketch Insurance without a
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`3
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`Case 1:17-cv-01067-RP Document 21 Filed 05/31/18 Page 4 of 7
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`license. (See, e.g., Compl., Dkt. 1, at 4). Bradford does not, however, allege that Nationwide
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`reproduced or distributed copies of the software. Bradford alleges that Nationwide is using
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`WinSketch Insurance, (id. at 5), and that other unnamed defendants conspired to distribute
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`WinSketch Insurance to Nationwide, (id.). These allegations, however, do not state a claim
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`for copyright infringement because they do not allege that Nationwide is infringing any of
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`Bradford’s exclusive rights under Section 106. The Court therefore agrees with Nationwide
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`that dismissal of this claim under Rule 12(b)(6) is appropriate.
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`2. DTPA
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`Nationwide argues that Bradford’s DTPA claim should be dismissed because Bradford fails
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`to allege that he is a consumer. (Nationwide Mot. Dismiss, Dkt. 3, at 13). The Court agrees. “Only a
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`‘consumer’ can maintain a cause of action directly under the DTPA.” Crown Life Ins. Co. v. Casteel, 22
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`S.W.3d 378, 286 (Tex. 2000). A consumer under the DTPA is one who “seeks or acquires by
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`purchase or lease, any goods or services.” TEX. BUS. & COM. CODE § 17.45(4). According to
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`Bradford’s complaint, he did not seek or acquire goods or services from Nationwide; on the
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`contrary, he provided goods to Nationwide. (See Compl., Dkt. 1, at 5–6 (alleging that it was
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`deceptive for unidentified defendants to distribute WinSketch Insurance without a license)). Because
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`Bradford does not plausibly allege that he is a consumer with respect to Nationwide, he cannot
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`maintain a cause of action against it under the DTPA.
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`3. Tortious Interference with Contract
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`Nationwide argues that Bradford’s tortious interference with contract claim should be
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`dismissed because Bradford fails to plausibly allege the existence of a contract. (Nationwide Mot.
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`Dismiss, Dkt. 3, at 14–15). The Court agrees. “ The elements of tortious interference with a contract
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`are (1) the existence of a contract subject to interference; (2) a willful and intentional act of
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`interference; (3) the act was a proximate cause of damages; and (4) actual damages or loss occurred.”
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`4
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`Case 1:17-cv-01067-RP Document 21 Filed 05/31/18 Page 5 of 7
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`Immobiliere Jeuness Establissement v. Amegy Bank Nat’l Ass’n, 525 S.W.3d 875, 880 n.2 (Tex. App.—
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`Houston [14th Dist.] 2017, no pet.). “To prevail on a tortious interference claim, a plaintiff must
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`present evidence that the defendant interfered with a specific contract.” Better Bus. Bureau of Metro.
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`Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 361 (Tex. App.—Houston [1st Dist.] 2013, pet.
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`denied). Bradford alleges that Nationwide “intentionally interfered with its Distributorship
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`Agreements” without identifying the other parties to those agreements or even a specific agreement
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`with which Natiowide interfered. Failure to allege a specific contract warrants dismissal. See Serafine v.
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`Blunt, 466 S.W.3d 352, 361 (Tex. App.—Austin 2015, no pet.) (dismissing plaintiffs’ tortious
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`interference claim where they “did not provide detail about the specific terms of the contract or
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`attach to his affidavit any contract or other document memorializing any agreement”).
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`4. Fraud
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`Nationwide argues that Bradford’s fraud claim should be dismissed because Bradford fails to
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`plead his claim with the particularity required by Federal Rule of Civil Procedure 9(b). (Nationwide
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`Mot. Dismiss, Dkt. 3, at 14–15). The Court agrees. Rule 9(b) requires a plaintiff to “state with
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`particularity the circumstances constituting fraud or mistake.” See also Carroll v. Fort James Corp., 470
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`F.3d 1171, 1174 (5th Cir. 2006) (“Rule 9(b) requires that plaintiffs plead enough facts to illustrate
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`“the ‘who, what, when, where, and how’ of the alleged fraud.”) (citation omitted). Bradford fails to
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`identify a fraudulent statement or any details about when and where such a statement was made. (See
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`Compl., Dkt. 1, at 9). A dismissal for failure to plead fraud with particularity in accordance with Rule
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`9(b) is treated as a Rule 12(b)(6) dismissal for failure to state a claim. U.S. ex rel. Steury v. Cardinal
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`Health, Inc., 735 F.3d 202, 204 (5th Cir. 2013). Because Bradford failed to plead his fraud claim with
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`sufficient particularity, the Court will dismiss that claim.
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`Case 1:17-cv-01067-RP Document 21 Filed 05/31/18 Page 6 of 7
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`B. ISO Claims
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`ISO Claims asks the Court to dismiss all of Bradford’s claims against it because his
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`complaint fails to allege any facts concerning ISO Claims. (ISO Claims Mem. Mot. Dismiss, Dkt. 10,
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`at 1). Bradford has not responded to ISO Claims’ motion. See W.D. Tex. Loc. R. CV-7(e)(2) (stating
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`that the Court may grant a motion as unopposed when no timely response is filed). The Court will
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`grant ISO Claims’ motion as unopposed and dismiss Bradford’s claims against it.
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`III. CONCLUSION
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`Both Nationwide and ISO Claims ask the Court to dismiss Bradford’s claims with prejudice.
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`(Nationwide Mot. Dismiss, Dkt. 3, at 20; ISO Claims Mem. Mot. Dismiss, Dkt. 10, at 12). Bradford
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`requests leave to amend his complaint. (Resp. Nationwide Mot. Dismiss, Dkt. 6, at 6). While the
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`decision to allow a party to amend its pleadings is within a district court’s discretion, Norman v.
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`Apache Corp., 19 F.3d 1017, 1021 (5th Cir. 1994) (citation omitted), Rule 15 “evinces a bias in favor
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`of granting leave to amend,” Lyn–Lea Travel Corp. v. Am. Airlines, 283 F.3d 282, 286 (5th Cir. 2002).
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`“The Court should grant the opportunity to amend unless it concludes that the plaintiff cannot
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`prevail under any legal scenario based on the factual allegations alleged in the complaint.” Linder v.
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`Deutsche Bank Nat’l Tr. Co., No. EP-14-CV-00259-DCG, 2015 WL 12743639, at *6 (W.D. Tex. Jan.
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`6, 2015) (citing Carroll v. Fort James Corp., 470 F.3d. 1171, 1175 (5th Cir. 2006)). That is, the Court
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`may appropriately dismiss an action with prejudice without giving an opportunity to amend if it
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`finds that the plaintiff has already alleged his or her best case. Jones v. Greninger, 188 F.3d 322, 327
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`(5th Cir. 1999). The Court also observes the Fifth Circuit’s reluctance to dispose of a cause of action
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`simply for failure to comply with a response deadline imposed by the local rules. See Johnson v.
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`Pettiford, 442 F.3d 917, 918 (5th Cir. 2006) (noting disapproval of an automatic grant of a dispositive
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`motion for failure to comply with local rules).
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`Case 1:17-cv-01067-RP Document 21 Filed 05/31/18 Page 7 of 7
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`Here, Bradford has not yet amended his complaint, and the Court is dismissing his claims
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`either because he failed to allege facts required to establish elements of a cause of action or because
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`he failed to respond in accordance with the Court’s local rules. Accordingly, the Court will grant
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`Bradford leave to amend.
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`Therefore, the Court ORDERS that Nationwide’s Motion to Dismiss, (Dkt. 3), and ISO
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`Claims’ Motion to Dismiss, (Dkt. 9), are each GRANTED, insofar as the Court dismisses
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`Bradford’s claims against the Nationwide defendants and against ISO Claims. However, those
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`claims are DISMISSED WITHOUT PREJUDICE and Bradford is granted leave to amend his
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`complaint.
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`SIGNED on May 31, 2018.
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`_____________________________________
`ROBERT PITMAN
`UNITED STATES DISTRICT JUDGE
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`7
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