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Cancian v. Hannabass and Rowe, Ltd.

United States District Court, W.D. Virginia, Roanoke Division

December 11, 2018



          Michael F. Urbanski Chief U.S. District Judge

         This matter comes before the court on Defendant Hannabass & Rowe, Ltd.'s ("Hannabass") and Defendant Lindsay Michelle Stinson's ("Stinson") Motions to Dismiss, both filed on October 16, 2018. ECF No. 17-1; ECF No. 18-1. Plaintiff Allesandro Cancian ("Plaintiff or "Cancian") filed the original complaint in this suit on June 20, 2018. ECF No. 1. Plaintiff filed the amended complaint against Defendants on October 2, 2018. ECF No. 16. In response to Defendants' motions to dismiss, Plaintiff Allesandro Cancian filed a memorandum in opposition on October 30, 2018. ECF No. 23. For the reasons stated below, the court now DENIES Defendants' motions.


         This case arises from alleged copyright infringement. Plaintiff is a photographer who registered a photograph with the United States Copyright Office on May 5, 2017. Cancian posted his copyrighted photograph on the website on March 17, 2012. Plaintiff alleges the copyright was infringed when Defendants "copied and posted the photo on Hannabass' commercial website," "on or about November 23, 2015." ECF No. 16, ¶ 11.

         Hannabass is a corporation formed under the laws of Virginia, headquartered in Roanoke, Virginia and specializing in car repair. ECF No. 16, ¶2. Stinson was the sole owner and member of Stinson Communications LLC ("Stinson Communications"), a Virginia limited liability company. ECF No. 16, ¶12. Cancian contacted Stinson through counsel on February 6, 2017, requesting both that Stinson remove the photo immediately and that Cancian receive compensation for the infringement. ECF No. 18-5. The photo was removed 29 days later. ECF No. 17-1, 2.


         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. To survive a motion to dismiss under Rule 12(b)(6), the plaintiff must plead sufficient facts "to raise a right to relief above the speculative level" and "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). A plaintiff establishes "facial plausibility" by pleading "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, 678 (2009). In ruling on a 12(b)(6) motion, the court must accept all well-pleaded allegations in the complaint as true and draw all reasonable factual inferences in the light most favorable to the plaintiff. Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). However, "[f]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678; see Wag More Dogs, LLC v. Cozart. 680 F.3d 359, 365 (4th Cir. 2012) (holding the court "need not accept legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments") (internal quotation marks omitted).


         Defendants Hannabass and Stinson have both filed motions to dismiss. These motions will be addressed in turn. As the alleged actions of Stinson Communications give rise to this suit, Sanson's motion will be examined first.


         In her motion, Stinson argues that she cannot be held individually liable for actions performed by Stinson Communications because Stinson Communications is an LLC. An LLC, or Limited Liability Company, is a legal entity separate from its members or owners. Remora Investments. LLC v. Orr. 277 Va. 316, 322, 673 S.E.2d 845, 847 (2009). An LLC thus shields its members from personal liability for the actions of the entity. Id. Plaintiffs complaint alleges that Stinson is "jointly and severally liable for any direct copyright infringement committed by Stinson Communications LLC." ECF No. 16, ¶ 20. Plaintiff also alleges that Stinson is "vicariously liable" for the actions of Stinson Communications. Id. Plaintiff did not, however, name Stinson Communications as a defendant in this case, and instead named Stinson in her individual capacity, seeking to hold her personally liable. See ECF No. 16.

         Only a few factual scenarios permit a plaintiff to bypass the shield an LLC offers and hold the members of that LLC personally liable. See In re White. 412 B.R. 860, 865 (Bankr. W.D. Va. 2009) (stating the limited circumstances justifying the piercing of an LLC veil). First, a member or officer of an LLC may be pursued individually for actions taken by die LLC when a court decides to "pierce the veil." Id. A court may pierce the veil in three instances: 1) "when die unity of interest and ownership is such that die separate personalities of die [LLC] and the individuals no longer exist and to adhere to that separateness would work an injustice;" 2) where the individual sought to be held liable attempted to use the LLC veil to evade a personal obligation, perpetuate a fraud or crime, commit an injustice, or gain an advantage; and 3) where the LLC's inability to satisfy a judgment against it is the result of deliberate under capitalization. Id. (quoting O'Hazza v. Executive Credit Corp., 246 Va. 111, 115, 431 S.E.2d 318, 320 (1993)); Dana v. 313 Freemason. Inc., 266 Va. 491, 502, 587 S.E.2d 548, 554 (2003).

         Plaintiff has pled no facts indicating that any of die above applies. Instead, Plaintiff states that Stinson Communications no longer exists-indeed, Stinson Communications was cancelled for non-payment of fees on January 31, 2017. ECF No. 16, ¶13; ECF No. 23-1. This fact on its own, however, does not expose Stinson to personal liability. Virginia's Limited Liability Company Act (the Act) states that, in die event of automatic cancellation of an LLC's existence (due to, for example, a failure to pay fees),

"No member, manager, or other agent of a limited liability company shall have any personal obligation for any liabilities of the limited liability company, whether such liabilities arise in contract, tort, or otherwise, solely by reason of die cancellation of the limited ...

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