Momentum Global FZ LLC v. Kairos Global Trade, LLC et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRJCT OF TEXAS
HOUSTON DIVISION
MOMENTUM GLOBAL FZ LLC, 	§
§
Plaintiff, 	§
§
VS. 	§ 	CIVIL ACTION NO . 4:24-CV-04659
§
KAIROS GLOBAL TRADE, LLC, et al. , 	§
§
Defendants. 	§
ORDER
Pending before the Court is the Motion to Dismiss fi led by Defendants Kamil Aydin
("Aydin") and Kairos Global Trade, LLC ("Kairos") (collective ly , "Defendants" ). (Doc. No. 20).
Plaintiff Momentum Global FZ LLC ("Momentum" or "Plaintiff') filed a response. (Doc. No. 23) .
Having reviewed these documents, the record, and the applicable 	law, the 	Court hereby
CONDITIONALLY GRANTS Defendants' Motion to Dismiss. (Doc. No. 15) .
BACKGROUND
The facts described herein are alleged in Plaintiffs Complaint and taken as true for
purposes of the Motion to Dismiss.
Momentum is a limited liability company that specializes in the supply of polymers. (Doc.
No. 16 at 3). Momentum alleges that in 2024, it entered into a business agreement with Defendant
Kairos whereby Kairos "assumed responsibility for the supply and shipment of goods," while
Momentum "provided financing and managed logistical operations and the sale of the goods."
(Id.).
United States District Court
Southern District of Texas
ENTERED
March 24, 2026
Nathan Ochsner, Clerk
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 1 of 14

In March of 2024, Momentum claims that the parties entered into an agreement for the
shipment of "PP, HDPE, and LLDPE Resins" to one of Momentum's customers. (Id.). Pursuant to
this agreement, Momentum alleges that it received a proforma invoice from Kairos for $97,200.00
and it then sent payments to Kairos in that amount (Id.) . Momentum contends that "[a]lthough
Defendants assured Plaintiff that the goods were en route," after six weeks, Defendants claimed
that "errors on the part of the supplier" had resulted in the goods not being shipped to Momentum's
customer. (Id.) . As a result, Momentum maintains that it was forced to refund advance payments
to the customer, "resulting in reputational damage." (Id.).
Momentum asserts that, "[d]espite repeated requests," Defendants have failed to return the
$97,200.00 in funds , "instead providing false SWIFT transaction records to delay the refund" to
Momentum. (Id. at 4) (emphasis omitted). Momentum alleges that while Kairos initially processed
repayment of the $97,200.00 , it ultimate ly "reversed the transaction to avoid making the payment."
(Id.). Momentum contends it has fulfilled all of its obligations and has duly performed all
conditions on its part required under the parties' agreement. (Id.) .
In its amended Complaint (titled "Original Complaint" ), Momentum asserts several causes
of action against Defendants: (1) breach of contract; (2) breach of fiduciary duty; (3) intentional
misrepresentation; ( 4) negligent misrepresentation; (5) fraud ; and (6) alter ego liability. See (Doc.
No. 16). Defendants' Motion to Dismiss requests that the Court dismiss several of these claims.
See (Doc. No. 20).
LEGAL STANDARD
A defendant may file a motion to dismiss a complaint for "failure to state a claim upon
which relief may be granted." Fed. R. Civ. P. 12(b)(6). Similarly, a plaintiff may file a Rule
12(b)(6) motion to dismiss a counterclaim. See Kansas v. Nebraska, 527 U.S. 1020 (1999). To
2
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 2 of 14

defeat a motion to dismiss under Rule 12(b)( 6), a plaintiff must plead "enough facts to state a claim
to relief that is plausible on its face. " Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A
claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal,
556 U.S. 662, 663 (2009) (citing Twombly, 550 U.S. at 556). "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." Id. (quoting Twombly, 550 U.S. at 556). "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."' Id. (quoting Twombly, 550 U.S. at 557).
In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the
complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm
Mut. Auto. Ins. Co., 509 F.3d 673 , 675 (5th Cir. 2007). The Court is not bound to accept factual
assumptions or legal conclusions as true, and only a complaint that states a plausible claim for
relief survives a motion to dismiss. Iqbal, 556 U.S . at 678- 79. When there are well-pleaded factual
allegations, the court assumes their veracity and then determines whether they plausibly give rise
to an entitlement to relief. Id. Additionally, in deciding a motion to dismiss, "the court may
consider documents attached to or incorporated in the complaint and matters of which judicial
notice may be taken." US ex rel. Willard v. Humana Health Plan a/Tex. Inc. , 336 F.3d 375, 379
(5th Cir.2003).
ANALYSIS
Defendants' Motion argues that Plaintiff's Complaint "relies on completely conclusory
allegations and threadbare recitals of causes of action." (Doc. No. 	20 at 	1). 	Specifically,
Defendants aver that the Complaint (1) "does not allege sufficient facts to hold Aydin individually
3
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 3 of 14

liable" for any of the causes of action "because it does not specifically identify his conduct;" (2)
"fails to plead breach of fiduciary duty because it does not allege sufficient facts to support an
inference that a fiduciary duty ever existed;" and (3) does "not contain sufficient facts that satisfy
the 	heightened 	pleading 	standard" 	for 	fraud, 	intentional 	misrepresentation, 	and 	negligent
misrepresentation. (Id. at 1- 2). As such, Defendants request that the Court dismiss all claims
against 	Aydin 	and 	dismiss 	the 	claims 	for 	breach 	of 	fiduciary 	duty, 	fraud, 	intentional
misrepresentation, and negligent misrepresentation against Kairos. (Id. at 2).
I. 	Plaintiff's Breach of Contract Claim Against Aydin
First, Defendants assert that Plaintiff has failed to state a claim against Aydin for breach of
contract. (Id. at 3). Defendants contend that "[i]t is well established that a person is liable for a
contract only if he is a party to the contract or an intended third-party beneficiary." (Id.). Since
Aydin is neither, Defendants argue Plaintiff must pierce the corporate veil to hold Aydin personally
liable. Defendants maintain that Plaintiff has not provided facts sufficient to pierce the corporate
veil. (Id.). Importantly, Defendants do not allege that Plaintiffs breach of contract claim against
Kairos should be dismissed.
A bedrock principle of Texas corporate law is that an owner or officer of a corporation is
not liable for corporate debts. See SSP Partners v. Gladstrong Inves tm ents (USA) Corp. , 275
S.W.3d 444, 451 n.29 (Tex. 2008) (citing Willis v. Donnelly, 199 S.W.3d 262, 271 (Tex. 2006)).
Alter ego, however, is "one basis for piercing the corporate veil and disregarding the corporate
fiction. " Burchinal v. PJ Trailers-Seminole Mgmt. C o. , 372 S.W.3d 200, 216- 17 (Tex. App.-
Texarkana 2012, no pet.). "Generally, alter ego will not apply to disregard the corporate form
absent exceptional circumstances." Richard Nugent & CAO, Inc. v. Estate of Ellickson, 543
S.W.3d 243,266 (Tex. App.- 	Houston [14th Dist.] 2018, no pet.).
4
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 4 of 14

The Texas Legislature has further limited the ability of a plaintiff to recover under the alter
ego theory. Specifically, the Texas Business Organizations Code precludes a shareholder, owner,
or affiliate from being liable for "any contractual obligation of the corporation or any matter
relating to or arising from the obligation" on the basis that the owner " is or was the alter ego of the
corporation or on the basis of actual or constructive fraud, a sham to perpetrate a fraud, or other
similar theory." Tex. Bus. Orgs. Code Ann. § 21.223(a)(2); see Salvex, In c. v. Trans/air N. Am .
Int'! Freight Services, Inc. , 2020 WL 4676768, at *9 (S.D. Tex. Aug. 12 , 2020), report and
recommendation adopted, 2020 WL 5235161 (S.D. Tex. Sept. 2, 2020). This statute does not,
however, prevent or limit the liability of an owner " if the obligee demonstrates that the [owner]
caused the corporation to be used for the purpose of perpetrating and did perpetrate an actual fraud
on the obligee primarily for the direct personal benefit" of the owner. Tex. Bus. Orgs. Code Ann.
§ 21.223(b).
"In the veil-piercing context, Texas courts have held that ' actual fraud is not equivalent to
the tort of fraud ."' Belliveau v. Barco, Inc. , 987 F.3d 122, 129 (5th Cir. 2021) (citing Matter of
Ritz, 832 F.3d 560, 567 (5th Cir. 2016)). Instead, "actual fraud involves ' dishonesty of purpose or
intent to deceive. "' Ritz, 832 F.3d at 567 (quoting Latham v. Burgher, 320 S.W.3d 602, 607 (Tex.
App.-Dallas 2010, no pet.)). Since fraud is an element of the alter ego doctrine, "a plaintiff
pleading alter ego must satisfy the heightened pleading requirements of Federal Rule of Civil
Procedure 9(b ). " Shadix-Marasco v. Austin Reg'! Clinic P.A., 2010 WL 2232804, at *6 (W.D. Tex.
June 1, 2010), report and recommendation approved, 2010 WL 11601257 (W.D. Tex. June 16 ,
2010); see Debut Sols. LLC v. Axion Structural Innovations, LLC, 2021 WL 11723751, at *6 (S .D.
Tex. Dec. 23 , 2021) (same); Fed. R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state
with particularity the circumstances constituting fraud or mistake.").
5
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 5 of 14

To start, Plaintiff's Complaint asserts that Aydin is the "owner and registered agent of
Kairos." (Doc. No. 16 at 2). Defendants do not dispute this. Thus, to hold Aydin liable for Kairos '
alleged breach of contract, Plaintiff must sufficiently plead that Aydin used Kairos to (1)
"perpetrate an actual fraud" (2) primarily for Aydin' s "direct personal benefit." Tex. Bus. Orgs.
Code Ann. § 21.223(b). Plaintiff does not sufficiently allege either of these items - in fact, the
"Factual Allegations" section of Plaintiff's Complaint does not mention Aydin once. See (Doc.
No.16at3--4).
Plaintiff contends in its Response that its Complaint "pleads with specificity that Aydin
commingled personal and company funds, made false representations to induce Plaintiff's
payment, issued fraudulent SWIFT receipts, and reversed a wire transfer after leading Plaintiff to
believe repayment had been initiated." (Doc. No. 23 at 6 (citing Doc. No. 16 at ,r,r 7, 16- 21 , 50-
52)). The Court, however, finds no support for this argument in Plaintiff's actual allegations.
Plaintiff's Complaint is devoid of any factual details supporting the conclusory allegations that
Aydin commingled funds, made false representations, issued fraudulent receipts, and reversed a
wire transfer. 1 Even assuming Plaintiff had pled sufficient facts to support these allegations, they
are insufficient to meet the high standard for piercing the corporate veil for a contract claim. See
1 The paragraphs of the Complaint cited in Plaintiffs Response do not support Plaintiffs argument. See
(Doc. No. 16 at ,r 7) ("Plaintiff is informed and believes, and therefore alleges, that a unity of interest and
ownership exists between Kami! Aydin and Kairos .. . . Kami! Aydin commingled his personal funds
with those ofKairos , and his representations made under Plaintiff [sic] and Defendant Kairos constitute
fraud ... since he never intended to fulfill the promises under the Agreement."); (Id. at ,r 16- 21)
(generally asserting that "Defendants" failed " to deliver goods that had already been paid for; " "failed to
return the funds, instead providing false SW1FT transaction records to delay the refund;" and "reversed
the transaction [for the refund] to avoid making the payment"); (Id. at ,r 50-52) (generally asserting that
"Defendants engaged in a deliberate scheme to defraud Plaintiff by misrepresenting the shipment of
goods, creating false financial records, and ultimately reversing an attempted refund").
6
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 6 of 14

Williams v. WMXTechs. , Inc., 112 F.3d 175,177 (5th Cir. 1997) (Rule 9(b) requires the "who,
what, when, where, and how" to be laid out).
Plaintiffs Complaint does not plead sufficient facts to demonstrate that Aydin used Kairos
to perpetrate an actual fraud for his own personal benefit. Plaintiff, therefore, has not sufficiently
pled its alter ego theory of liability against Aydin for Kairos' 	alleged breach of contract.
Accordingly, Plaintiffs breach of contract claim against Aydin is dismissed.
II. 	Plaintifr s Breach of Fiduciary Duty Claim
Second, Defendants argue for dismissal of Plaintiffs breach of fiduciary duty claim
because Plaintiffs Complaint "does not contain sufficient facts to allege the existence of a
fiduciary duty." (Doc. No. 20 at 4). Defendants maintain that Plaintiffs Complaint does not
explain how a fiduciary duty arose from the parties' alleged "business agreement," or sale of
goods, since it does not contain any information about the nature of the alleged agreement. (Id. at
5). Further, Defendants contend that Plaintiffs cause of action section regarding this claim reads
like a breach of contract claim and a "contract itself is not enough to create a fiduciary duty." (Id.).
"The elements of a claim for breach of fiduciary duty are ( 1) a fiduciary relationship existed
between the plaintiff and the defendant, (2) the defendant breached its fiduciary duty, and (3) the
breach resulted in injury to the plaintiff or benefit to the defendant." Heritage Gulf Coast Props. ,
Ltd. v. Sandalwood Apartments, Inc. , 416 S.W.3d 642 , 650 (Tex. App.- 	Houston [14th Dist.]
2013 , no pet.). The first step in assessing such a claim is determining whether the defendant owes
the plaintiff a fiduciary duty. Under Texas law, a fiduciary duty can arise from a formal or informal
relationship. "In certain formal relationships, such as an attorney-client or trustee relationship, a
fiduciary duty arises as a matter of law." Meyer v. Cathey, 167 S.W.3d 327, 330 (Tex. 2005). A
fiduciary duty can also arise informally from a "moral, social, domestic or purely personal
7
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 7 of 14

relationship of trust and confidence." Id. 	at 331 (quoting Associated Indem. Corp. 	v. 	CAT
Contracting, Inc. , 964 S.W.2d 276, 287 (Tex.1998)).
Not every relationship, even one involving a high degree of trust and confidence, creates a
fiduciary duty. The general rule established by the Supreme Court of Texas is that a contractual
obligation does not give rise to a fiduciary duty. See Johnson v. Brewer & Pritchard, P. C. , 73
S.W.3d 193,203 (Tex. 2002); Nat'l PlanAdm'r, Inc. v. Nat'l Health Ins. Co. , 235 S.W.3d 695 , 702
(Tex.2007). " To 	impose 	an informal 	fiduciary 	duty 	in a business transaction, 	the 	special
relationship of trust and confidence must exist prior to, and apart from, the agreement made the
basis of the suit." Meyer, 167 S.W.3d at 331 (quoting Associated Indem. Corp. , 964 S.W.2d at
287).
To establish the alleged fiduciary duty, Plaintiff claims that "Defendants owed Plaintiff a
fiduciary duty by virtue of their business relationship, in which Plaintiff entrusted Defendants with
financial resources and relied on Defendants for the proper execution of transactions." (Doc. No.
16 at 5). In its Response, Plaintiff argues it adequately pled a fiduciary relationship because the
Complaint alleges that "Plaintiff entrusted Defendants with $97,200.00 for the purpose of
procuring and shipping goods" and Plaintiff relied on not only the contract between the parties,
but Defendants' "specific representations, repeated assurances, and exercise of unilateral control
over the logistics and financial processing." (Doc. No. 23 at 8).
Plaintiff does not allege any preexisting relationship "of trust and confidence" between it
and Defendants. Meyer, 167 S. W.3d at 331. The only asserted "business relationship" is premised
on the parties' alleged "business agreement" whereby Plaintiff paid Defendants for the supply and
shipment of goods. See (Doc. No. 16 at 3). The relationship between Plaintiff and Defendants is,
at best, purely a contractual one. While the Court recognizes that Plaintiff pled that it trusted and
8
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 8 of 14

relied on Defendants, "[m]ere subjective trust does not ... transform arm' s-length dealing into a
fiduciary relationship." In s. Co. of N Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998) (quoting
Schlumberger Te c h. Corp. v. Swanson , 959 S.W.2d 171 , 177 (Tex.1997)). Instead, to impose such
a relationship in a business transaction, there must be a fiduciary relationship "prior to , and apart
from, the agreement made the basis of the suit." Meyer, 167 S.W.3d at 331.
Plaintiff has not pled facts to show that an informal fiduciary relationship existed between
Plaintiff and Defendants. Since Plaintiff has not pled facts that establish even the first element of
its breach of fiduciary duty claim, the claim is dismissed. The Court grants Defendants' Motion
regarding Plaintiffs breach of fiduciary duty claim against all Defendants.
III. 	Plaintiff's Fraud and Intentional Misrepresentation Claims
Third, Defendants assert that Plaintiffs claims for fraud and intentional misrepresentation
fail because Plaintiff does not plead sufficient facts under the heightened pleading standard for
fraud. (Doc. No. 20 at 5- 8). Defendants maintain that fraud and intentional misrepresentation "are
the same cause of action due to shared elements," meaning the heightened Rule 9(b) pleading
standard applies to both claims. (Id. at 6) . Under this premise, Defendants aver that Plaintiff failed
to satisfy the standard by (1) lumping the Defendants together as one "without giving an
explanation 	as 	to 	what 	each 	specifically 	did 	to 	allegedly 	commit 	fraud" 	or 	intentional
misrepresentation; and (2) only discussing post-transaction conduct and not representations made
before or at the time the parties entered the agreement. (Id. at 6- 8).
The Court agrees with Defendants that Plaintiff' s claim for intentional misrepresentation
is essentially the same as its fraud claim. S ee Wein stock v. Transamerica Inv. Group, Inc. , 2024
WL 1394511 , at *7 (S.D. Tex. Mar. 31 , 2024), appeal dismissed, 2024 WL 4971958 (5th Cir. June
25 , 2024) ('" A claim of intentional misrepresentation has the same elements as a fraud claim[,]'
9
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 9 of 14

so the Court's discussion of fraud includes intentional misrepresentation."); Smith v. Tilton , 3
S.W.3d 	77 , 	88 	(Tex. 	App.- 	Dallas 	1999, 	no 	pet.) 	("appellant's 	claim 	for 	intentional
misrepresentation is the same as her fraud claim."); RenCare, Ltd. v. United Med. Res. , Inc. , 180
S.W.3d 160, 166 (Tex. App.-San Antonio 2005, no pet.) (stating that the same elements are
required 	for 	plaintiffs 	fraud 	and 	intentional 	misrepresentation 	claims); 	Barrand, 	Inc. 	v.
Whataburger, Inc., 214 S.W.3d 122, 140 n.5 (Tex. App.- 	Corpus Christi- Edinburg 2006, pet.
denied) ("Intentional misrepresentation is essentially fraud."). Accordingly, the Comi analyzes
these claims as one.
"The elements of fraud are (1) a material false representation, (2) that was made with
knowledge or recklessness as to its falsity, (3) with the intent to induce reliance, and (4) that the
other party ' actually and justifiably relied upon,' causing him injury." Garcia v. Vera , 342 S.W.3d
721 , 725 (Tex. App.- 	El Paso 2011, no pet.) (quoting Ernst & Young, L.L.P. v. Pac. Mut. Life In s.
Co., 51 S.W.3d 573 , 577 (Tex. 2001)). Additionally, the Federal Rules of Civil Procedure require
that allegations of fraud must "state with particularity the circumstances constituting fraud. " Fed.
R. Civ. P. 9(b). The plaintiff must include the "time, place and contents of the false representations,
as well as the identity of the person making the misrepresentation and what [that person] obtained
thereby." Williams, 112 F.3d 175 at 177.
In pleading its intentional misrepresentation claim, Plaintiff asserts that Defendants "made
false representations to Plaintiff to induce them to enter into a contract with Defendants, including
... stating that the goods were en route when they were not and presenting fraudulent SWIFT
transaction records to mislead Plaintiff into believing that repayment was underway. (Doc. No. 16
at 5). In its fraud claim, Plaintiff reasserts the same alleged misrepresentations: "Defendant
engaged in a deliberate scheme to defraud Plaintiff by misrepresenting the shipment of goods,
10
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 10 of 14

creating false financial records, and ultimately reversing an attempted refund." (Id. at 6). Plaintiff
maintains in both claims that Defendants knew these representations were false and made them
with an intent that Plaintiff would rely upon them, and that Plaintiff did rely on them and thereby
suffered injury. (Id. at 5- 6).
Notably, Plaintiffs allegations concerning Defendant's misrepresentations all appear to
stem from conduct after the parties entered into the alleged business agreement. Plaintiff's
Complaint asserts that the parties entered into an agreement in March 2024 and then Defendants
allegedly misrepresented the status of the shipment of the goods and later presented allegedly false
financial records. See (Doc. No. 16 at 3-4). Defendants' alleged misrepresentations, therefore,
could not have induced Plaintiff to enter into the agreement whereby Plaintiff paid Defendants
$97,200.00. 	Plaintiff 	does 	not 	plead 	any 	facts 	indicating 	that 	Defendants 	made 	any
misrepresentations prior to the parties entering into the business agreement. As such, Plaintiff has
not pled facts sufficient to prove that Defendants fraudulently induced Plaintiff into paying
Defendants for supply and shipment of the goods. At best, Plaintiff pleads that Defendants made
misrepresentations after entering into the agreement to delay Plaintiff's discovery of the fai led
shipment.
Accordingly, 	Plaintiff 	has 	failed 	to 	sufficiently 	plead 	its 	fraud 	and 	intentional
misrepresentation claims. The Court grants Defendant's Motion regarding these claims.
IV. 	Plaintifrs Negligent Misrepresentation Claim
Lastly, Defendants argue that Plaintiff's negligent misrepresentation claim should be
dismissed. Defendants maintain that because Plaintiff's negligent misrepresentation claim is
substantia ll y intertwined with Plaintiff's fraud claim, Rule 9(b)' s heightened pleading standard
applies, and Plaintiff fai ls to satisfy this standard. See (Doc. No. 20 at 8- 10).
11
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 11 of 14

"Although Rule 9(b) by its terms does not apply to negligent misrepresentation claims, [the
Fifth Circuit] has applied the heightened pleading requirements when the parties have not urged a
separate focus on the negligent misrepresentation claims." Benchmark Elecs. , In c. v. JM Huber
Corp. , 343 F.3d 719, 723 (5th Cir. 2003), opinion modified on denial ofr eh'g, 355 F.3d 356 (5th
Cir. 	2003). "Once 	a 	fraud 	claim 	is 	dismissed 	under 	Rule 	9(b), 	a 	claim 	for 	negligent
misrepresentation based on the same operative facts must also be dismissed unless 'it is possible
for the Court to describe a simple redaction that removes allegations of fraud from the complaint,
but leaves the plaintiffs valid and intelligible negligent misrepresentation claim intact. '" Biliouris
v. Sundance Resourc es , Inc. , 559 F. Supp. 2d 733 , 737 (N.D. Tex. 2008) (quoting American Realty
Tru st, Inc. v. Travelers Cas. & S ur. Co. of A m. , 362 F.Supp.2d 744, 752 (N.D.Tex.2005)); see
MicroCapital Fund LP v. Conn's Inc., 2019 WL 3451153, at *26 (S.D. Tex. July 24 , 2019), report
and recommendation adopted, 2019 WL 4673209 (S.D. Tex. Sept. 24 , 2019); Nelson v. Ocwen
Loan 	Servicing, 	LL C, 	2016 	WL 	7324284, at 	*6 	(S.D. 	Tex. 	Nov. 7, 2016), report and
recommendation adopted, 2016 WL 7242735 (S.D. Tex. Dec. 15 , 2016).
In this case, as Defendants allege, Plaintiffs allegations of negligent misrepresentation are
"almost identical" to those of its fraud claim. (Doc. No. 20 at 9) . First, Plaintiff groups all of its
factual allegations (for all six claims) into the same several paragraphs of its Complaint. See (Doc.
No. 16 at 3--4). For its section focusing on the negligent misrepresentation claim, Plaintiff
generally refers to the same asserted facts for its fraud claim: "Defendants, in the course of their
business dealings, supplied false information regarding [their] intention to enter into the agreement
and ship goods purchased under their agreement, the shipment of goods and the status of financial
transactions." (Id. 	at 6). Indeed, in its Response, Plaintiff asserts that Defendants' negligent
misrepresentations include "falsely stating that goods were en route, issuing fraudulent SWIFT
12
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 12 of 14

confirmations, and misrepresenting that a wire transfer refund had been completed." (Doc. No. 23
at 14). These are the exact same factual allegations asserted for Plaintiffs fraud claim.
As such, the Court can discern no "separate focus" on negligent misrepresentation that is
distinct from those allegations directed at pleading Plaintiffs fraud claim. Benchmark Elecs., Inc.,
343 F.3d at 723. Since the Court cannot describe "a simple redaction" that removes the fraud claim
while keeping the negligent misrepresentation claim intact, Plaintiffs negligent misrepresentation
claim must also be dismissed for failure to state a claim under the Rule 9(b) pleading standard.
Biliouris, 559 F. Supp. 2d at 737. Accordingly, the Court grants Defendants' Motion regarding
Plaintiffs claim for negligent misrepresentation asse1ied against all Defendants.
That being said, "[w]hen a party has failed to plead with sufficient particularity, the [c]ourt
will almost always permit leave to amend to bring the complaint into compliance with the
requirements of Rule 9(b)." Jag Media Holdings Inc. v. A. G. Edwards & Sons Inc., 387 F. Supp.
2d 691, 704 (S.D. Tex. 2004) (citing Summer v. Land & Leisure, Inc., 664 F.2d 965, 971 (5th
Cir.1981 )). Thus, the Court grants Plaintiff leave to amend its Complaint regarding its fraud-based
claims 	(fraud, 	intentional 	misrepresentation, and 	negligent misrepresentation). 	Defendants'
Motion to Dismiss is granted, but Plaintiff is given leave to rep lead if it does so by April 17 , 2026.
If it fails to do so, this Court will dismiss the case. If Plaintiff does rep lead timely, Defendants will
have 21 days to respond as they deem appropriate.
CONCLUSION
Based on the foregoing analysis, the Court CONDITIONALLY GRANTS Defendants'
Motion to Dismiss. (Doc. No. 20). Plaintiff is granted leave to amend its Complaint as to its fraud-
based 	claims 	against both Defendants, including 	fraud, 	intentional 	misrepresentation, 	and
negligent misrepresentation, to comply with the specific requirements of Rule 9(b) if it does so by
13
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 13 of 14

April 17, 2026. Failure to comply with this deadline will result in dismissal. If an amended
complaint is timely filed, Defendants may respond to this new complaint as per the Rules of Civil
Procedure. The breach of fiduciary duty claim is dismissed with prejudice.
_, \_
Signed on this the V 	day of March 2026. b 	)	\~------'('----
Andrew S. Han en
United States District Judge
14
Case 4:24-cv-04659 Document 27 Filed 03/23/26 in TXSD Page 14 of 14