Andretti Sports Marketing Louisiana, LLC v. NOLA Motorsports Host Committee, Inc. (147 F. Supp. 3d 537, 2015)

ORDER

NANNETTE JOLIVETTE BROWN, UNITED STATES DISTRICT. JUDGE

In this litigation, Plaintiff' Andretti Sports Marketing Louisiana, LLC (“Andretti”) alleges that it is owed money under a contract it entered into with Defendant NOLA Motorsports Host Committee, Inc. (“NMHC”). Andretti alleges that Defendants NOLA Motor Club, LLC (“NOLA Motor”) and Laney Chouest (“Chouest”) are also liable to it under Louisiana’s single-business enterprise and alter-ego doctrines. Pending before the Court is NOLA Motor and Chouest’s “Rule 12(b)(6) Motion to Dismiss, and Alternative 12(e) Motion for More Definite Statement.” Having reviewed the motion, the memoranda in support, the memorandum in opposition, the record, and the applicable law, the Court will grant the motion in part and deny it in part.

I. Background

A. Factual Background

In its complaint, Andretti alleges that this action arises out of a Racing Services Agreement entered into by Andretti and NMHC, á non-profit formed on June 26, 2014. In 2014, Andretti entered into negotiations with Chouest to bring the Verizon IndyCar Series to NOLA Motorsports Park for the first ever Indy Grand Prix of Louisiana (“Event”). NOLA Motor owns and operates NOLA Motorsports Park, which is. a racing and events facility located outside of New Orleans. Chouest is the sqle member of NOLA Motor.

Andretti alleges that Chouest represented, on numerous occasions, during the negotiations, that he “personally stood behind the Event” and would make sure that its obligations were fully funded for the first year of the Event. On July 6, 2014, Andretti and NMHC entered into the Racing Services Agreement. Andretti alleges that it was advised that NMHC was formed because the State of Louisiana had agreed to help fund the Event and the State required grant money to be received by a non-profit. According to Andretti, NMHC agreed to pay Andretti $1,322,050 annually for its management fee as well as for the event and service costs, regardless of the success of the race. Under the Agreement, Andretti was to provide management services for races to take placean the years 2015,2016 and 2017.

On August 19,2014, NMHC entered into a Cooperative Endeavor Agreement with the State of Louisiana to allocate $4.5 million of state funds for the Event. Andretti alleges that approximately $3.4 million' of the money provided by the State of'Louisiana went to capital improvements in NOLA 'Motorsports Park and' that this “deprived NMHC of needed capital to fulfill its financial obligations.” The Event took place on April 10-12, 2015. It is alleged that there are no funds to pay the balance of Andretti’s management fees or the event and service costs.

B. Procedural Background

On June 16, 2015, Andretti filed, a.complaint against NMHC, NOLA Motor, and Chouest (collectively “Defendants”), alleging claims of breach of contract, unfair and deceptive trade practices, unjust enrichment, and fraud. Andretti alleges, that NOLA Motor and its sole member, Chouest, are liable under Louisiana’s single business enterprise, alter-ego, unjust enrichment, and fraud doctrines. On June 24, 2015, Andretti filed its “First Amended Complaint” to allege the citizenship of parties identified in its original complaint.

On July 30, 2015, Defendants NOLA Motor and Chouest together filed a “Rule 12(b)(6) Motion to Dismiss, and Alternative 12(e) Motion for More Definite Statement.” The same day, Defendant NMHC filed a “Motion to Dismiss Under Rule 12(b)(6) for Failure to State a' Claim.” On August 25, 2015, Andretti filed oppositions to both motions. NOLA Motor and Chouest filed a reply, memorandum, with leave of Court, on September 2, 2015 The Court heard oral argument on both motions on September 2, 2015. Here, the Court considers only NOLA Motor and Chouest’s motion to dismiss.

II. parties’ Arguments

A. NOLÁ Motor and Chouest’s Arguments in Support of Their Motion to Dismiss

NOLA Motor and Chouest move to dismiss Andretti’s claims for breach of contract, unfair and deceptive trade practices, unjust enrichment and fraud.

1. Breach of Contract

NOLA Motor and Chouest first move to dismiss Andretti’s breach of contract claim, asserting that Andretti is precluded from making the argument that NOLÁ Motor and Chouest are liable under a single business enterprise or alter ego theory due to the terms of the Racing Services Agreement. ÑOLA Motor and Chouest contend that, in the Agreement, Andretti conceded that NMHC is “not,an affiliate of NOLA Motor Club, LLC or any entity associated with the NOLA Motorsports Park.” Furthermore, they contend that Andretti likewise sought its own provision that Andretti is not an affiliate of other entities with which it has some association and, therefore, the provisions should be enforced for-both parties. ■

NOLA Motor and Chouest additionally argue that although Andretti claims that it relied upon verbal statements by Chouest that he would “back” or “guarantee” the Event, the’ Racing Services Agreement specifically states that 'by entering the agreement,1 Andretti was doing so without relying on any other written or oral assurances or course of conduct. NOLA Motor and Chouest also assert that the Agreement provides that it constitutes the complete agreement between the parties. Furthermore, NOLA Motor and Chouest contend that Andretti stipulated in the “integration provisions” of the Agreement that it would not consider the Agreement amended or modified in any way by any other written or oral statement, assurance or course of practice, unless the modification was in writing and signed by each duly authorized" representative of Andretti and NMHC.

NOLA Motor and Chouest assert that this claim is “clearly a .contrivance after Andretti failed to make the Event a financial success, which left [NMHC] unable to make the payments Andretti desires.” They contend that Andretti recognized and accepted that the Event may not turn a profit from which Andretti could be paid and that the Agreement, in fact, had a provision precluding NMHC from terminating the Agreement if Andretti ran , a deficit during the Event’s first two years. NOLA Motor and Chouest contend that it was Andretti’s responsibility to manage the cash flow and. ensure that there would be sufficient money to timely pay all costs.

Furthermore, NOLA Motor and Chouest argue that Andretti’s claim must fail because, the single business entity and alter ego theories require proof of a legal relationship, and no legal relationship exists between themselves and NMHC as neither NOLA Motor nor Chouest are shareholders, members, directors, or officers of the committee. NOLA Motor and Chouest additionally maintain that the single business enterprise theory only applies to corporations and, therefore, the breach of contract claim against Chouest should be dismissed.

Finally/NOLA Motor and Chouest contend that Andretti has failed to plead sufficient facts under either the single business enterprise or alter ego theories. They assert • that the general rule is that a “member 'of a corporation- shall not be personally liable for any obligation of the corporation,” They contend that the Supreme Court of Louisiana has established five‘factors for-courts to consider when determining whether to apply the alter ego doctrine: “(1) commingling of corporate and shareholder funds; (2) failure to follow statutory formalities for incorporating and transacting corporate affairs; (3) underca-pitalization; (4) failure to provide separate bank accounts and bookkeeping. records; and (5) failure to hold regular shareholder and director meetings.” NOLA Motor and Chouest argue that Andretti'- has only-pled one of the factors, undercapitalization, and that the allegation'is “totally belied” by the agreement itself. They assert that NMHC fulfilled its obligation to have $1 million in funds available to it -in-order to fund the Event- and even taking Andretti’s allegations as true that $3.4 million-was used on track modifications, NMHC still complied under the agreement to have $1 million available for the Event. Furthermore, they argue that despite Andretti’s claims that Chouest undercapitalized NMHC, it has not alleged any duty Chouest had to capitalize NMHC at all.

Addressing Andretti’s claim under the single business enterprise theory, NOLA Motor and Chouest argue that courts have listed 18 factors that will support a finding óf a single business enterprise: ,,

(1) corporations, with identity or substantial identity of ownership, that is, ownership of sufficient stock to give actual working control; (2) common directors or officers; (3) unified administrative control of corporations whose business functions are similar or supplementary; (4) directors and officers of one corporation act in the interest of the corporation; (5) corporation' financing another corporation; (6) inadequate capitalization; (7) corporation causing the incorporation of another affiliated corporation; (8) corporation paying the salaries and other expenses or losses of another corporation; (9) receiving no business other than that given to it by its affiliated corporations; (10) corporation using the property of another corporation as its own; (11) noncompliance -with corporate formalities; (12) common employees; (13) services rendered by the employees of one corporation on behalf of another corporation; (14) common offices; (15) centralized accounting; (16) undocumented transfers of funds between corporations; (1-7) unclear allocation of profits and losses between corporations; and (18) excessive fragmentation of-a single enterprise into separate corporations.

NOLA Motor and Chouest assert that Andretti has pled “precious few” of the 18 factors that would support the application of that theory,

NOLA Motor and Chouest also address allegations made by1 Andretti regarding various connections between the Defendants. NOLA Motor and Chouest contend that the fact that Defendants lobbied for the involvement and financial contribution of the State of Louisiana-provides no basis for liability to be imposed. In addition, they argue that Andretti’s allegation that Chouest “appointed” the. five principals of NMHC is “nonsensical” because officers are appointed by a company’s Board of Directors, and Andretti fails to allege that Chouest is even a director on the Board. NOLA Motor and Chouest also maintain that, contrary to Andretti’s assertion, the fact that Frank Csaki served as an accountant for NMHC and also holds the position of accountant for NOLA Motor cannot serve as the basis for liability because “[i]f volunteering was the basis for liability because it led to piercing corporate veils, host committees would cease to exist and the city would never host another major sporting event.” NOLA Motor and Chouest also assert that the connections alleged by Andretti that NMHC and NOLA Motor share the same lobbyist and real estate agent are “quite remote.” NOLA Motor and Chouest finally address Andretti’s contention that Chouest and Chouest-related entities benefited from the Event, stating that “substantial rent is overdue by [NMHC] to NOLA Motor,” which is “hardly a benefit.”

2. LUTPA

NOLA Motor and Chouest also move to dismiss Andretti’s claim under the Louisiana Unfair Trade Practices and Consumer Protection Law (“LUTPA”), arguing that Andretti’s actual claim is simply a breach of contract claim and that the case law is clear that LUTPA is not a substitute for such a claim. NOLA Motor and Chouest argue that neither the breach of contract, nor Chouest’s alleged unfulfilled promise to provide a guarantee of payments to Andretti, rise to the level of egregiousness necessary to constitute a claim under LUTPA. In support, they cite a case from another section of the Eastern District of Louisiana, Administrators of the Tulane Educational Fund v. Biomeasure, Inc., a Middle District of Louisiana case, Shaw Industries, Inc. v. Brett, and a Louisiana First Circuit Court of Appeal case, Belle Pass Terminal, Inc. v. Jolin, Inc Second, citing Nursing Enterprises, Inc. v. Marr, a Second Circuit Court of Appeal case, they contend that to state a claim under LUTPA, Defendants’ actions must have been taken with the specific purpose of harming competition, which Andretti does not allege. Third, NOLA Motor and Chouest contend that Andretti does not plead the special relationship required for a LUTPA claim.

NOLA Motor and Chouest also move to dismiss the claim for treble damages, arguing that, under LUTPA, treble damages are only awarded in cases where the party engages in an unfair or deceptive method, act, or practice after being put on notice by the Attorney General. They contend that those requirements are not met in this case.

3. Unjust Enrichment

NOLA Motor and Chouest also move to dismiss Andretti’s claim for unjust enrichment. First, citing II Fire Records, L.L.C v. Clouden, a Louisiana Fourth Circuit Court of Appeal case, and Threadgill v. Orleans Parish School Board, a case from another section of the Eastern District of Louisiana, they assert that unjust enrichment is not available when Plaintiff has another remedy, here a breach of contract claim. Second, they contend that Andretti cannot allege the essential element of unjust enrichment that defendants were “enriched without cause.”

4. Fraud

NOLA Motor and Chouest move to dismiss Andretti’s fraud claim on the grounds that Andretti cannot plead the two essential elements of “duty to accurately disclose the information” and proximate cause. Citing Becnel v. Grodner, Louisiana Fourth Circuit Court of Appeal case, they contend that Andretti has not pled a duty that Chouest had to guarantee the Racing Services Agreement. They assert that, even if Chouest at one time stated he would guarantee the Racing Services Agreement, which he denies, “negotiations obviously changed” and Andretti signed the Racing Services Agreement without that guarantee. Furthermore, they assert that the loss alleged by Andretti is NMHC’s alleged failure to pay. Andretti under the Racing Services Agreement, a loss they contend was not caused by Chouest in any way.

In the alternative, NOLA Motor and Chouest aver that Andretti should be required to supplement its allegations with more specific facts as required by Federal Rule of Civil Procedure 9(b). They assert that Andretti has only stated that Chouest misrepresented his promise to guarantee the Racing Services Agreement, but Andretti has not pled the time, place, the specific content of each alleged misrepresentation, and the person to whom the misrepresentations were made. They further aver that Andretti must also plead “malice, intent, knowledge, and other conditions of the person’s mind” who made each misrepresentation.

B. Andretti’s Arguments in Opposition

1. Breach of Contract

In opposition, Andretti argues that the contract provisions do not bar its argument that Chouest and NOLA Motor acted as a single business entity and/or alter-ego. Andretti argues that the Racing Agreement provides that NMHC is not “an affiliate of NOLA Motor Club, LLC or any entity associated with the NOLA Mo-torsport Park.” However, Andretti contends that it is not claiming that Defendants acted as “affiliates,” but rather that they acted as one. Furthermore, Andretti asserts that the integration clause does not preclude it from introducing evidence of fraud and that many of the misrepresentations by Chouest occurred after the parties entered into the Racing Services Agreement. Andretti also contends that it never agreed that it would be paid only if the Event was profitable, and the Racing Services Agreement itself provided for payment in full, regardless of the success of the event.

Next, Andretti asserts that the failure to allege a legal relationship between NOLA Motor, Chouest, and NMHC is not a bar to its claim because courts have held that no legal relationship is necessary to extend the alter-ego theory or single business enterprise doctrine to individuals. In addition, Andretti contends that the allegations are sufficient to support the application of these doctrines. Andretti asserts that the factors to be considered in determining the existence of an alter ego and whether two entities are' a “single,business enterprise” are similar and they include: “common ownership, directors and officers, employees,' and offices; unified control; inadequate capitalization; noncompliance with corporate formalities, centralized accounting; unclear allocation of profits and losses between corporations; one corporation paying the salaries, expenses or losses of another corporation; and undocumented transfers of funds between entities,” with no one factor being dispositive.

Andretti asserts that it has made the following allegations in support of'the application of the’ single business enterprise and alter-ego doctrines: (1) NHMC and its offices hnd members were controlled by NOLA Motor'and Chouest; (2) during negotiations leading up to the execution of the agreement and in subsequent dealings, NOLA Motor and Chouest controlled all of the named entities and handled and/or controlled the dealings with Andretti; (3) NOLA Motor and Chouest formed and undercapitalized NMHC with the intention of sheltering themselves from liability; (4) the negotiations regarding the Event involved Chouest, his companies, and his agents, including Michael Sherman (“Sherman”), who acted as Chouest’s representative and later' served as a member of NMHC; (5) Sherman and Kristen Enger-on, President of NOLA Motorsports Park, were described by Chouest to Andretti as “equity partners” in the Event; (6) NOLA Motor and Chouest allocated $3.4 million of the money provided by the State of Louisiana for capital improvements- to NOLA Motorsports Park that was in excess of the amounts disclosed to Andretti; (7) Chouest was personally involved in negotiating the terms of the-Racing Services Agreement; (8) Chouest verbally represented to Andretti that he personally stood behind the event and would insure that its obligations were fully funded in the first year; (9) prior to the execution of the Agreement, Chouest represented on multiple occasions that payment for Andretti’s services would be guaranteed through the State of Louisiana’s appropriation and through Chouest’s own private investment; and (10) the funds received from the State of Louisiana were instead set aside by Chouest to pay vendors who performed capital improvements on the track in order to prevent the vendors from placing a lien on the track.

■ Furthermore, Andretti asserts that almost every officer of NMHC was a member of NOLA Motor'or acting as an agent of NOLA Motor and/or Chouest, NMHC had the same corporate office as Chouest-related entities, and NMHC shared an accountant with Chouest-related entities. Andretti asserts that discovery will bear out that Chouest put personal funds into NMHC and/or NOLA Motor to offset Event expenses and that money flowed between the Chouest-related entities* with poor financial discipline such that funds eventually landed into Chouest’s personal accounts.

Finally, Andretti contends that NMHC was undercapitalized and that the Racing Services Agreement was specifically premised on the promise that NMHC would receive an additional $4.5 million from the State, and that these funds would be used to pay Andretti rather than for the benefit of NOLA Motor.

2. LUTPA

Andretti asserts that although LUTPA does not provide an alternative remedy for simple breaches of contract, its LUTPA claim against NOLA Motor amd' Chouest “is not simply an alternative to its.,breach of contract claim.” Andretti contends, that NOLA Motor and Chouest were not signatories to the Racing Services Agreement and the allegations are not limited to. the contractual provisions of the Agreement. Nor is this “simply a case of;Defendant Laney Chouest failing to keep his promise to provide a guarantee of payments to [Andretti].” ... . .

..First, Andretti, contends that Chouest and NOLA Motor engaged in. deceptive, unethical, oppressive and unscrupulous conduct sufficient to plead a clqim under LUTPA. Andretti avers that, prior to the execution of the Racing Services Agreement, Chouest represented that Andretti would be compensated in full from the $4.5 million appropriated to NMHC by the State of Louisiana and from Chouest’s personal investment. It contends that, after execution of the Agreement, Andretti learned that NMHC did not have the funds to pay Andretti under the Agreement and Chouest had no intention of personally covering the amounts owed to it as he had previously represented. In addition, Andretti avers that Chouest used the state funds to benefit his race track rather than pay Andretti. Andretti also contends that the assertion that the State of Louisiana required that funds be distributed only to a non-profit corporation was inaccurate.

Second, Andretti .challenges NOLA Motor and Chouest’s assertion that in order to state a claim under LUTPA, Chouest’s motive must have been “harm to competition.” Andretti contends1 that the cases cited by NOLA Motor and Chouest are all distinguishable and, with the exception of one case, all predate the Louisiana Supreme Court’s decision in Cheramie Services, Inc. v. Shell Deepwater Production, which Andretti claims explicitly recognized standing under LUTPA for, all persons, not just business competitors.

Third, citing J.M. Smith Corporation v. Ciolino Pharmacy Wholesale Distributors, LLC, a case from another section of the Eastern District of Louisiana, Andretti denies that a “special relationship” is required under LUTPA. Andretti asserts that the Louisiana Supreme Court in Cheramie Services, Inc. promulgated a two-prong test that did not require a special relationship. Andretti claims that the test requires that: “1) the person must suffer an ascertainable loss; and 2) the loss must result from another’s use of unfair methods of competition and unfair or deceptive acts or practices.” Andretti asserts that even if a special relationship is required, such a relationship exists in this case because Andretti “was at the mercy of Chouest, who, because he controlled [NMHC] was able to meddle and unduly interfere with [Andretti’s] rendering of services, and who deceptively guaranteed he would personally fund the race to ensure [Andretti] would be paid.”

Finally, Andretti contends that a challenge to its entitlement to treble damages is premature because a determination of whether Defendants have continued to engage in unfair trade practices since the date Andretti filed its complaint will be further developed during discovery and therefore is not an appropriate issue for a 12(b)(6) motion.

3. Unjust Enrichment

Andretti asserts that its unjust enrichment claim is properly pled in the alternative under Federal Rule of Civil Procedure 8, as the Court may find that no privity of contract exists between Andretti, NOLA Motor, and Chouest under the Racing Services Agreement, “or because the contract may be declared void due to fraud or error in the inducement.”

4, Fraud

In opposition to the motion to dismiss the fraud claim, Andretti asserts that it has pled both duty and proximate cause. Andretti contends that a duty was created at the time Chouest represented that payments due to Andretti under the Agreement would be met by allocation of funds by the State and that “he, • personally, would ensure the Event’s viability such that these funds from the State grant were not otherwise spent to the detriment of [Andretti].” Andretti claims that despite Chouest’s representations, “Chouest at all times intended to use this funding to protect himself and his investment in [NOLA Motor].” Andretti contends that it was induced to enter into the Racing Services Agreement directly by all of the Defendants’ misrepresentations. Furthermore, Andretti asserts that its loss was directly caused by Chouest’s misallocation of funds for his benefit and to Andretti’s detriment and his failure to abide by his representation that he would personally ensure the viability of the first year of the race.

In addition, Andretti asserts that it has sufficiently alleged the time, place, and identity of the speakers of the alleged misrepresentations. Andretti contends that, in its complaint, it identified the timing of the misrepresentation as “days prior to July 6, 2014,” and identified the people who made the representations as Michael Sherman, Laney Chouest, and Kristin En-geron. Andretti further contends that these representations were also made; after the Racing Services Agreement was executed.

C. NOLA Motor and Chouesfs Arguments in Further Support of Their Motion

In their reply, NOLA Motor and Chouest assert that Andretti “seriously misconstrues” the Racing Services Agreement in its argument that NMHC was undercapitalized. NOLA Motor and Chouest contend that although Andretti represented in its opposition that the Agreement specified that the $4.5 million from the State would be used to pay Andretti, there was no such requirement in the Agreement. Furthermore, NOLA Motor and Chouest assert that the “overwhelming weight of the case’law recognizes that for alter ego/[single business enterprise] claims, the individual defendant must have some legal relationship with the company for which the plaintiff is seeking to hold him hable ... .”

NOLA Motor and Chouest also assert that none of the paragraphs cited by Andretti in support of their fraud claim state who the misrepresentations were made to, which is a clear requirement for pleading fraud. Finally, NOLA Motor and Chouest contend that the “vast weight of the case law calls for dismissing the unjust enrichment claim, because there are other claims available to Andretti — ”

IV. Law and Analysis

A. Legal Standard on a Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed “for failure to state a claim upon which relief can be granted.” A motion to dismiss for failure to state a claim is “viewed with disfavor and is rarely granted.” “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’ ” “Factual allegations must be enough to raise a right to relief above the speculative level.” A claim is facially plausible when the plaintiff has pleaded facts that allow the court to “draw a reasonable inference that the defendant is liable for the misconduct alleged.”

On a motion to dismiss, asserted claims are liberally construed in favor of the claimant, and all facts pleaded are taken as true. However, although required to accept all “well-pleaded facts”- as true, a court is not required to accept legal conclusions as true. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” . Similarly, “[t]hreadbare recitals of the elements-of a cause of action, supported by mere c'onclusory statements” will not suffice. The complaint need not contain detailed factual allegations, but it must offer more, than mere labels, legal conclusions, or formulaic recitations of the elements of a cause of action. That is, the complaint must, offer more than an “unadorned, the defendant-unlawfully-harmed-me accusation.” From the face of the complaint, there must be enough factual matter, to raise a reasonable expectation that discovery will reveal evidence as to each element of the asserted claims. If factual allegations are, insufficient to raise a right to relief above the speculative level, or if it is apparent from the face of the complaint that;there is an “insuperable” bar to relief, the claim must be dismissed.

It is well-established that, in deciding whether to grant a motion to dismiss pursuant to Rule 12(b)(6), a district court may not “go outside the complaint.” There is one recognized exception to that rule: a diátrict court may consider documents attached to the motion to dismiss if they are referred to in the complaint and-are central to the claim. “In so attaching, the defendant merely assists the plaintiff in establishing the basis of the suit, and the court in making the elementary determination of whether a claim has been stated.” If, however, a district court considers other information outside the complaint, it must treat the motion to dismiss as a motion for summary judgment.

B. Applying Louisiana Law

When a federal court interprets a state law, it must do so according to the principles of interpretation followed by that state’s highest - court. In Louisiana, “courts must begin every legal analysis by examining primary sources of law: the State’s Constitution, codes,, and statutes-.” These authoritative, or primary sources of law are to be “contrasted with persuasive or secondary sources of law, such as [Louisiana and other, civil law] jurisprudence,, doctrine, conventional usages, and equity, that may guide the court in reaching a decision in the absence of legislation and custom.” To make a so-called “Erie guess” on an issue of Louisiana law, the Court must “employ the appropriate Louisiana methodology” to decide the issue the way that it believes the Supreme Court of Louisiana woulcLdecide- it. Although federal courts should not disregard the decisions of, Louisiana’s .intermediate courts unless they are “convinced that the Louisiana Supreme Court would decide otherwise,” they are not strictly bound-by them!

C. Breach of Contract Claim

NOLA Motor and Chouest argue that Andretti’s breach of contract claim should be dismissed on four grounds: (1) the single business enterprise doctripe may not be applied to impose liability on an individual; (2) there was no legal relationship between NOLA Motor, Chóuést, and NMHC and therefore there can bé no single business enterprise; (3) the Racing Services Agreement precludes Andretti’s claims; (4) Andretti has not pled sufficient facts to support an application of either a single business enterprise or an alter ego theory; and (5) there was no legal relationship between NOLA Motor, Chouest, and NMHC and therefore the defendants cannot be liable under the alter ego doctrine! The Court will address each of these arguments in turn.

1. Whether the Single Business Enterprise Doctrine May Be Applied to Impose Liability on an Individual

In Brown v. ANA insurance Group, the Louisiana Supreme Court explained that the single business enterprise doctrine is “a theory for imposing liability where two or more business entities act as one. Generally under the doctrine, when corporations integrate their resources in operations to achieve a common business purpose, each business may be held liable for wrongful acts done in pursuit of that purpose.” NOLA Motor and Chouest contend that the single business enterprise doctrine applies only to corporations: and therefore it may not be applied to Chouest individually! In support, they quote the Louisiana Fourth Circuit Court of Appeal in Lee v. Clinical Research Center of Florida, L.C., explaining that “[w]hen a group of corporations integrate their resources to achieve a. common business purpose and do not operate as separate entities, each affiliated corporation may be held liable for debts incurred in pursuit of the general business purpose.” Andretti does not respond to NOLA Motor and Chouest’s argument that the single business enterprise cannot be applied to an individual.

The Louisiana Supreme Court has explained the single business enterprise is “a theory for imposing liability where two or more business entities act as one.” Accordingly, as Chouest is an individual, not a business entity, the Court finds that the single business enterprise doctrine may not be applied to Chouest in order to hold him liable for the breach of contract.

2. Whether. There Can Be a Single Business Enterprise When There was No Legal Relationship Between NOLA Motor, Chouest, and NMHC

NOLA Motor and Chouest also assert that they cannot be liable for NMHC’s debts under the single business enterprise doctrine because in order for corporations to constitute a single business enterprise there must be a legal relationship between the two corporations, and no such relationship exists in this case. In opposition, Andretti contends that a claim premised on the single business enterprise doctrine can survive absent any legal relationship.

In support of their argument, NOLA Motor and Chouest cite Lee v. Clinical Research Center of Florida, L.C., a Louisiana Fourth Circuit Court of Appeal case. NOLA Motor and Chouest do not explain how this case supports their assertion, stating, in a parenthetical, only that the “single business enterprise theory would pierce corporate veil to impose corporate liability on parent corporation.” In Lee, the court observed that the single business enterprise has been recognized “as a vehicle for holding a group of affiliated entities responsible for the obligations of one of the entities.” Although the court used the term “affiliated,” it did not further define or explain that term. The court evaluated the connections between the several corporations alleged to constitute a single business enterprise using the eighteen factors identified by the Louisiana First Circuit Court of Appeal in Green v. Champion Ins. Co. as relevant to a determination of whether corporations constitute a single business enterprise. The court in Lee found that although some of the factors established in the Green case may have been present, including shared offices and the corporations having a non-controlling member in common, “based on the totality of the evidence in the record, there clearly were not enough factors present to create a genuine issue of material fact as to whether the defendant entities constituted a single business enterprise.”

In opposition, Andretti cites a Louisiana First Circuit Court of Appeal case, Grayson v. R.B. Ammon and Associates, Inc., asserting that, in Grayson, the court found that, “[i]f one corporation is wholly under the control of another, the fact that it is a separate entity does not relieve the latter from liability. In such an instance, the former corporation is merely an alter ego or business conduit of the latter.” In Grayson, Richard Ammon (“Ammon”) incorporated R.B, Ammon & Associates, Inc. in order to supply temporary clerical and labor employees. Because the workers’ compensation coverage for the labor employees affected the overall workers’ compensation rates, Ammon decided to separate its clerical and labor business and encouraged his nephew, Chevis Comeaux (“Comeaux”), to form a new corporation to provide temporary labor employees. Comeaux formed CBC Temporary Staffing Services, Inc. (“CBC”) and was the sole stockholder. The court found that there was sufficient evidence to support the July’s factual determination that the two corporations constituted a single business enterprise. The .court noted that the evidence demonstrated that Ammon handled all the day-to-day- operations for CBC, the two corporations operated under the same trade name, they shared the same office and computer system, all of the daily operations’were handled by R.B. Ammon employees, and R.B. Ammon billed CBC’s clients without. CBC directly reimbursing R.B. Ammon for any of these services.

Andretti also cites a case from another section of the Eastern District, of Louisiana, Bona Fide Demolition and Recovery, LLC v. Crosby Construction Company of Louisiana, Inc. Andretti asserts that.in Bona . Fide Demolition and Recovery, LLC, the court noted that courts have “even extended the [single business enterprise] theory to unaffiliated corporations that' lack common ownership .... ” In Bona Fide Demolition and Recovery, LLC, the court found that although no common ownership existed and there was no business relationship between the corporations, considering the Creen factors, the corporations constituted a single business enterprise. The court noted that the two corporations used the sanie'' office space and shared the same resources, the president of one of the corporations .controlled the financial operations of both corporations, the finances of the two corporations were intermingled, and -one of the corporations did not observe many corporate formalities that might indicate its separateness. ,

Although, in Lee, the Louisiana Fourth Circuit Court of Appeal found that the single business enterprise applies to “affiliated 'entities,” other, courts have recognized that the doctrine can apply to unaffiliated, corporations. Furthermore, the cases-cited by Andretti demonstrate that no formal legal relationship, such as that of a parent corporation and its subsidiary, is required in order for a single business enterprise to exist. Accordingly, NOLA Motor and Chouest’s motion to dismiss Andretti’s breach of contract claim is denied on the grounds that a legal relationship is required between NOLA Motor and NMHC. in order for them to constitute a 'single business enterprise..

3. Whether the Racing Services Agreement Precludes Andretti’s Breach of Contract Claim

NOLA Motor and Chouest also assert that Andretti’s breach of contract claim must be dismissed because the Racing Services Agreement precludes the claim. In support, NOLA Motor and Chouest point to contractual provisions of the Racing Services Agreement. A district court may consider documents attached to a motion to dismiss if they are referred to in the complaint and are central to the claim. As the Racing Services Agreement was attached to NOLA Motor and Chouest’s motion to dismiss and was referenced in Andretti’s complaint, the Court may consider it in evaluating NOLA Motor and Chouest’s motion to dismiss.

In the Racing Services Agreement, the parties agreed that “NMHC is an independent nonprofit corporation” and that “NMHC is not an affiliate of [NOLA Motor] or any entity associated with the Nola Motorsports Park.” The'Agreement defined “affiliate(s)” as “(1) all business units and divisions of a party or its parent entities] and (2) any entity controlled by, controlling, or under common control with such party.” The Agreement provided that “[t]he board members, officers, and agents of NMHC may, from time to time, serve in another capacity for [NOLA Motor] but such service shall not create ah affiliate relationship between NMHC and [NOLA Motor] or Nola Motorsports Park.” In opposition, Andretti asserts that .the Agreement does not preclude its breach of contract claim against NOLA Motor and Chouest because “[Andretti] is not claiming that' [NOLA Motor] and Chouest acted as ‘affiliates.’ [Andretti] claims that they acted as a single business entity and/or alter-ego. In other words, they were not just associated or affiliated, they acted as one.”

A contract has the effect of law for the parties and the words of a contract must be given their generally prevailing meaning. “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.” Where a contract is unambiguous, the interpretation of the contract becomes a matter of law.

Andretti asserts that agreeing that NMHC and NOLA Motor are not affiliates is not the same as agreeing that they are not á single business enterprise. However, by signing the Racing Services' Agreement, which provided that NMHC is not an affiliate of NOLA Motor, Andretti was agreeing that NMHC was not controlled by NOLA Motor because “affiliate” was defined, in part, as “any entity controlled by ... such party.” Accordingly, the Racing Services Agreement precludés Andretti from arguing, as Andretti does in its complaint, that NMHC and NOLA Motor constituted a single business enterprise because' “NMHC and its officers and members, were controlled by Defendants, [NOLA Motor] and Chouest.”

The Agreement also states that the fact that board members, officers, and agents of NMHC may serve in another capacity for NOLA Motor will not create an affiliate relationship . between NMHC and NOLA Motor. Therefore, Andretti may not rely upon the commonality of directors, officers, or employees as the basis for arguing that NMHC was controlled by NOLA Motor-either. ■

There are several factors that may be considered in a determination of whether a single business enterprise exists and no one factor is dispositive. Therefore the Racing Services Agreement’s provision that NMHC is not an affiliate of NOLA Motor,.as has been defined by the parties as “all business units and divisions of .a party or its parent entities” and “any entity controlled by, controlling, or under common control with such party,” does not necessarily preclude a finding that the twp constituted a single business enterprise. Accordingly, the Court will turn to NOLA Motor and Chouest’s argument that Andretti has failed to plead sufficient facts to support an application of the single business, enterprise doctrine.

4. Whether Andretti Has Pled Sufficient Facts to Support an Application of the Single Business Enterprise Doctrine

The single business enterprise doctrine was first applied in Louisiana, in Green v. Champion Insurance Co. In Green, the court identified eighteen factors to be used to determine whether a group of entities constitute a “single business enterprise,” noting that no one factor is dispositive of the issue. These factors are:

1. corporations with identity or substantial identity of ownership, that is, ownership of sufficient stock , to give -actual working control; 2, common directors, or officers; 3. unified administrative control of corporations whose business functions are similar or supplementary; 4. directors and officers of one corporation act independently in the interest of that corporation; 5. corporation financing another corporation; 6. inadequate capitalization (“thin incorporation”); 7. corporation causing the incorporation of another affiliated corporation; 8. corporation paying the salaries and other expenses or losses of another corporation; 9. receiving no business other than that given to it by its affiliated corporations; 10. corporation using the property of another corporation as its own; 11. noncompliance with corporate formalities; 12. common employees; 13. services rendered by the employees of one corporation on behalf of another corporation; 14. common offices; 15. centralized accounting; 16. undocumented transfers of funds between corporations; 17. unclear allocation of profits and losses between corporations; and 18. excessive fragmentation of a single enterprise into separate corporations.

Andretti treats the single business enterprise and alter ego doctrines as one. Citing the Fifth Circuit in Jackson v. Tanfoglio Giuseppe, S.R.L., Andretti asserts that the factors to- be considered in determining the existence of an alter ego and whether there is a single1 business enterprise are similar. Andretti asserts that the factors “include, but are not limited to[:] common ownership, directors and officers, employees, and offices; unified control; inadequate capitalization; noncompliance with corporate formalities; centralized accounting; unclear allocation of profits and losses between corporations; one corporation paying the salaries, expenses, or losses of another corporation; and undocumented transfers of funds, between entities” but that “[n]o one factor is dis-positive.” Andretti contends that its allegations are sufficient to support the application of the single business enterprise and alter-ego doctrines. Although Andretti identifies several allegations in its complaint in support of its application of these doctrines, Andretti has failed to identify, in either its opposition to the motion to dismiss or at oral argument, how its allegations support the factors it asserts are to be considered in determining the existence of a single business enterprise.

Andretti first points to several allegations it made in its complaint that appear to fall within the category of “common ownership, directors and officers, employees, and offices.” Andretti contends that “almost every officer of NMHC was, in fact, a member of [NOLA Motor] or acting as an agent of [NOLA Motor] and/or Chouest in them dealings, NMHC had the same corporate office as the other Chouest related, entities, including [NOLA Motor], and that NMHC shared an accountant with [NOLA Motor] and the Chouest related entities.” Andretti specifically alleges that Chouest appointed three of the officers of NMHC, the President of NOLA Motor, Kristen Engeron, a lobbyist for Chouest, Michael Sherman, and a real estate listing agent for NOLA Motor, Delisha Boyd. Andretti also alleges that Michael Sherman acted as Chouest’s representative during the negotiations and later served as a member of NMHC and that both Sherman and En-geron “were described by Chouest to [Andretti] as ‘equity partners’ in the Event.” Andretti further asserts that “[discovery will also reveal that any distinction between Michael Sherman and Kristen Engeron’s roles as directors of NMHC and their roles as employees of [NOLA Motor] and/or Chouest is a legal fiction.”

Next, Andretti appears to assert that there was “unified control” of NMHC by NOLA Motor and Chouest. Andretti alleged in-its complaint that “NMHC and its officers and members, were controlled by Defendants, [NOLA Motor] and Chouest,” Andretti also alleges that NOLA Motor and Chouest “controlled all of the named entities and handled and/or controlled the dealings with [Andretti]” during the negotiations for Racing Services Agreement and in subsequent dealings. On a motion to dismiss, the Court is required to take all well-pleaded facts as true, but “mere' conelusory statements” are not sufficient. Andretti has not provided any factual support for its conclusion that NMHC and its members were “controlled” by either NOLA Motor or Chouest. Nor has Andretti provided factual support for its assertion that the “distinction between Michael Sherman and Kristen Engeron’s roles as directors of NMHC and their roles as employees of [NOLA Motor] and/or Chouest is a legal fiction.” Furthermore, as discussed above, Andretti agreed in the Racing Services Agreement that NMHC was not controlled by NOLA Motor. Therefore, the Court finds that Andretti has failed to plead sufficient facts to demonstrate that there was “unified control.”

' Andretti also alleges that “NMHC was undercapitalized, inadequately capitalized, and .thinly incorporated such that it was insufficiently funded,- and had -insufficient capital to support its operations." Tit its opposition, Andretti contests NOLA Motor and Chouest’s claim that the Agreement set forth NMHC’s capitalization requirement at $1 million. It appears- that Andretti’s argument as to undercapitalization is based upon its assertion that “the Racing Services Agreement was specifically premised on the agreement that NMHC would receive an addition [sic] $4.5 million dollars from the State, and that these funds would be used to pay [Andretti] and not for the benefit of [NOLA Motor].” At oral argument, however, Andretti acknowledged that the contract Was 'silent as to how the $4.5 million was to be spent. Accordingly, the Court finds that Andretti has failed to plead sufficient facts to demonstrate that NMHC was undercapitalized.

Andretti also asserts that “discovery will bear out that Chouest put personal funds into NMHC and/or [NOLA Motor] to .offset Event expenses, and that money flowed between the Chouest-related entities with poor financial discipline such that the funds eventually landed in the accounts of most importance to Chouest personally, and his Motorsports Park — into which Chouest has sunk a king’s ransom.” However, Andretti does not make any factual allegations in its complaint -to support this assertion. If such factual* allegations existed, perhaps they could support the factor that “one corporation [was] paying the salaries, expenses, or losses of another corporation.” Although Andretti asserts that it can obtain this information in discovery, Andretti does not provide any further explanation regarding how it believes that discovery will bear this out. Furthermore, Andretti’s assertion that Chouest put his own personal funds into NMHC cannot support a finding of single business enterprise between NMHC and NOLA Motor. Therefore, the Court finds that Andretti has failed to plead sufficient facts to show that' there was an unclear allocation of profits and > losses between NMHC, NOLA Motor, and Chouest.

Andretti also alleges that Chouest was actively involved in negotiating the terms of the Racing Services Agreement and that he verbally represented to Andretti that he personally stood behind the event and would insure that its obligations were fully funded in the first year'. Furthermore, Andretti alleges that Chouest represented that payment for'Andretti’s services would be guaranteed through the State of Louisiana’s appropriation and Chouest’s own private investment, but that the funds received from the’ State were instead set aside by Chouest to pay vendors who performed capital improvements to the track. Andretti does not explain how these allegations support any of the factors or how these allegations support a finding that NOLA Motor and NMHC together constitute a single business enterprise.

Considering Andretti’s allegations and the factors to be considered in determining the existence of a single business enterprise, the Court finds that -the only factor that Andretti has sufficiently pled is that NMHC and NOLA Motor had in common certain directors, officers, employees, and offices. The significance of this factor, however, is undermined by the fact that NMHC is a non-profit corporation staffed on a volunteer basis. NOLA Motor and Chouest assert, and Andretti does not contest, that NMHC performed its work with “100% volunteerism.” Therefore, this is not a case where one corporation was paying the salaries of another corporation’s employees. Nor can this factor be used -to support any inference of control- of NMHC by NOLA Motor, pursuant to the provisions of the Racing Services Agreement.

In Lee v. Clinical Research Center of Florida, L.C., a case from the Louisiana Fourth Circuit Court of Appeal, the plaintiff filed suit .against several entities for breach of an employment contract, alleging that the entities were operating as a single business enterprise. On the motion for summary judgment, in evaluating the. relationship between the companies CRC Florida and Florida Medical Management, the court found that Florida Medical Management’s acquisition of a non-controlling interest in the company and documented, interest-accruing loans. to CRC Florida were not sufficient to establish that CRC Florida and Florida Medical Management were operating as a single business enterprise. The court also looked to the relationship between the companies CRC Mississippi and CRC Florida, which shared a member with a non-controlling interest in both companies. The court found that the evidence showed that CRC Mississippi had maintained its own bank accounts, paid its own expenses and taxes, and that there was no evidence other, than the common member of any of the other factors identified in Green as relevant to a single business enterprise analysis. As in Lee, here, the only factor Andretti has sufficiently pled in support of its assertion that NOLA Motor and NMHC constituted, a single business enterprise -is common directors, .officers, employees, and office.

Andretti urges the Court to deny the motion to dismiss, arguing that in considering the factual allegations, the Court must “draw on [its] judicial, experience and common sense, to analyze whether those facts, which need not be detailed and specific, allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged [under the single business enterprise/alter ego doctrine].” Andretti contends that in Diamond Services Corporation v. Oceanografia, S.A. DE C.V., an unpublished case from the Western District of Louisiana, the magistrate judge denied the motion to dismiss a, claim based upon the application of the single business enterprise doctrine. Andretti avers that the court reasoned that if specific details regarding accounting, allocation and corporate governance issues were required to be specifically pled at the motion to dismiss stage', essentially no case of this type could ever survive a motion to dismiss;" because the necessary facts would be in the sole' possession of the defendant. In that case, however, the court had found that the plaintiff had sufficiently pled several of the factors recognized •by the Fifth Circuit in Jackson v. Tanfoglio Giuseppe, S.R.L. as factors to be considered .in determining whether a single business enterprise existed, including the existence of common ownership, directors, and officers, unified control, and that one of the companies had paid some debts and expenses owed' by the other. Here, the Court finds that Andretti has only sufficiently pled, at most/1 one ' of these factors.

Accordingly, the Court find's that Ari: dretti has failed to sufficiently plead that NOLA Motor and NMHC constitute a single business enterprise. Next, the Court will address whether Andretti has stated claims for breach of contract'! against NOLA Motor and Chouest pursuant to the alter ego doctrine. •

5. Whether the Alter Ego Doctrine May Be Applied to Impose Liability When There is No Legal Relationship Between NOLA, Motor, Chouest, and NMHC

NOLA Motor and Chouest contend that they cannot be held liable for breach of contract under the alter' ego doctrine because in order for the doctrine to apply, Andretti must allege a legal relationship between- NMHC, NOLA Motor, and Chouest and no such relationship exists. NOLA Motor and Chouest assert that they are not shareholders; members, directors, or officers of NMHC. In opposition, Andretti asserts that no legal relationship is necessary to apply the alter ego doctrine.

In Riggins v. Dixie Shoring Company, Inc., the Louisiana Fourth Circuit Court of Appeal found that the purpose behind the “piercing the corporate veil” and “alter ego” doctrines is to “protect a creditor in his dealings with- a shareholder who fails to distinguish, in transactions, between the corporation and his- identity as a shareholder.” In Riggins, the plaintiffs originally filed suit against Dixie Shoring Company, Inc. (“Dixie”),- with which they had contracted to have their house leveled. During the litigation, however, Dixie filed bankruptcy pleadings and the plaintiffs subsequently amended their petition to include as' defendants O.P. Bajoie, a major shareholder in Dixie, along with his son, Reginald Bajoie, an employee and officer at the company. The Fourth Circuit Court of Appeal held that the alter ego doctrine was applicable only against shareholders of a corporation, and - therefore found that' Reginald Bajoie, who was an employee- and officer of -the' company, but not a shareholder, could not be held liable under the alter ego doctrine. The court found that the trial court had not erred, however, in piercing the corporate veil and finding O.P. Bajoie, Dixie’s major shareholder, individually liable to the plaintiffs. The case was appealed to the Louisiana Supreme Court.'"

The Louisiana Supreme Court' noted that the Fourth Circuit Court of Appeal had “exonerated” Reginald Bajoie, but the court analyzed only the Fourth Circuit Court of Appeal’s affirmation of the district court ruling that O.P. Bajoie could be held individually liable to the plaintiffs under the alter ego doctrine. The Louisiana Supreme Court noted that under Louisiana law, “[t]he general rule [is] that corporations are distinct legal entities, separate from the individuals who comprise them.” However, where a corporation is simply the “alter ego” of the shareholder, the Louisiana Supreme Court stated, the corporate veil may be pierced. The court noted that the alter ego doctrine “usually involved situations where fraud or deceit has been practiced by the shareholder acting through the corporation;” however, “[a]nother basis for piercing the corporate veil is when the shareholders disregard the requisite corporate formalities to the extent that the corporation ceases to be distinguishable from its shareholders.” The court stated that “[b]ecause of the beneficial role. of the corporate concept, the limited liability attendant to corporate ownership should be disregarded only in exceptional circum7 stances.” The Louisiana Supreme Court identified several factors that courts may consider when determining whether to apply the alter ego doctrine: “1) commingling of corporate and shareholder funds; 2) failure to follow statutory formalities for incorporating and transacting corporate affairs; 3) undercapitalization; 4) failure to provide separate bank accounts and bookkeeping records; and 5) failure to hold regular shareholder and director meetings.” The Louisiana Supreme Court reversed the Fourth Circuit Court of Appeal, holding that O.P. Bajoie could not be individually liable under the alter ego doctrine. The court reasoned that there was no evidence that O.P. Bajoie had used the corporate form to perpetrate fraud, and that although some corporate formalities were not strictly followed, the Bajoies had followed most of the essential corporate formalities for the twenty-three years of the corporation’s existence.

In opposition, Andretti cites Middleton v. Parish of Jefferson, a Louisiana Fifth Circuit Court of Appeal case. At issue in Middleton was “whether a corporate official can avoid an exception of res judicata by bringing, in his individual capacity, a suit already litigated on behalf of the corporation.” The court found that “[although it is alleged that Mr. Middleton is not a shareholder of [the corporation], shareholder status is not the only element used in determining if veil piercing is appropriate.” The court held that veil piercing “must be used in this instance not to impose personal liability on Mr. Middleton but to prevent his use of subversive tactics to take an unjust advantage of a legal distinction. Allowing a corporate official to bring suit in his individual capacity, solely for the purpose of avoiding an exception to res judicata, would be an unjust result.” As NOLA Motor and Chouest, correctly assert, however, Middleton was the president of the corporation and therefore a legal relationship existed in that case. The court in Middleton referenced the Fourth Circuit Court of Appeal decision in Riggins, but noted that in Withers v. Timber Products, Inc., another case cited by Andretti, the Louisiana .Third Circuit Court of Appeal also pierced the corporate veil to hold liable a person who was not formally a shareholder in the pierced corporation.

' In Withers, the trial court had held that defendant John Makar (“Makar”) was aching as the alter ego of defendant Timber Products, Inc. On appeal, the Third Circuit Court of Appeal noted that Makar was the sole stockholder and officer at the time of Timber Products, Inc.’s incorporation, but that Makar had testified that.he had “swapped” one hundred percent of the stock of Timber Products, Inc. to a judgment-proof individual in exchange for property. Therefore, at the time the plaintiff sought to pierce the corporate veil, Makar was no longer a stockholder of Timber Products, Inc. The Third Circuit Court of Appeal noted that the trial judge had found that the alleged transfer of stock was “nothing more than a sham transfer in an attempt by Makar to avoid exposure for worker’s compensation .liability” and held that the trial judge had not clearly erred in finding Timber Products, Inc. to be the alter ego of Makar.

The Louisiana Supreme Court has noted that “[pjiercing the corporate veil is largely a jurisprudential doctrine.” In Ogea v. Merritt, the Louisiana Supreme, Court