Fraud Suits Require Actual Clear Allegations Against Each Defendant
Post 4857
Particularity for Fraud-Based Allegations Is Required
In Franklin Construction Group, LLC v. Dean Bingham, Lundon Johnson, et al, No. 3:25-cv-01071, United States District Court, M.D. Tennessee, Nashville Division (September 28, 2026) Franklin Construction Group, LLC (“FCG”) alleged that its former vice president, William Shore, worked with Lowe’s Companies, Inc., Lowe’s Home Centers, LLC, and five Lowe’s employees to defraud FCG.
The complaint described two related schemes:
First:
Shore or his company, JWSC, LLC, allegedly received payments for purportedly independent material estimates on FCG projects that Shore was already managing or influencing.
Second:
Shore and one or more Lowe’s employees allegedly authorized purchases billed to FCG for materials used on Shore’s side projects. FCG further alleges that product codes and prices were altered to conceal the transactions, that a Lowe’s credit card billed to FCG facilitated the activity, and that Chevrette and Bingham made payments to Shore or JWSC. FCG asserts RICO, civil-conspiracy, and fraud claims.
The defendants moved to dismiss.
LAW
Specific personal jurisdiction in the Sixth Circuit requires:
- the defendant to purposefully avail himself of acting in or causing consequences in the forum;
- the claim must arise from or relate to those forum contacts; and
- the connection must be substantial enough to make jurisdiction reasonable.
Under Federal Rules of Civil Procedure 12(b)(7) and 19, dismissal for nonjoinder depends on whether complete relief can be accorded among existing parties and whether the absent person is required.
Rules 8 and 9(b) require a short and plain statement and particularity for fraud-based allegations, including identification of each defendant’s own allegedly fraudulent conduct.
DISCUSSION
On personal jurisdiction, Chevrette argued that he lived in North Carolina, had not conducted business in Tennessee, and had used JWSC only once for a material takeoff unrelated to FCG. The court nevertheless accepted FCG’s allegations at the pleading stage and considered evidence that Chevrette paid Shore’s Tennessee-based company and received multiple invoices. Those contacts, together with the alleged estimating and purchase-order schemes centered on Tennessee projects, sufficiently connected Chevrette to the forum.
The court found that it could award meaningful relief among the existing parties because FCG sought joint and several liability and had already obtained a $24,892,407.57 judgment against Shore and JWSC in the earlier action.
FCG repeatedly grouped the five individual employees together as the “Lowe’s Individual Defendants.” That collective pleading was inadequate.
ANALYSIS
FCG alleged enough Tennessee-directed conduct to keep Chevrette in the case and enough potential for relief against the present defendants to defeat the nonjoinder argument. Rather than dismissing the substantive claims outright, the court required FCG to amend so that each defendant receives fair notice and the court can evaluate liability individually. The ruling therefore preserves FCG’s claims while demanding substantially greater factual specificity.
CONCLUSION
The totality of FCG’s allegations and Schaedle’s and Chevrette’s statements sufficiently connect Chevrette to the fraudulent schemes in Tennessee alleged by FCG. Therefore it is fair and reasonable for the Court to exercise specific jurisdiction over Chevrette in Tennessee. The court denied Chevrette’s motion to dismiss for lack of personal jurisdiction and denied the motion to dismiss for failure to join Shore and JWSC.
By lumping all individual Defendants together the Court cannot identify each Defendant’s particular conduct. Throughout the Complaint – and in the RICO section in particular – plaintiffs lump[ed] together the defendants without specifically identifying which of the defendants engaged in the conduct alleged.
ZALMA OPINION
After obtaining a $24,892,407.57 judgment against Shore and JWSC the plaintiff sought to sue more people in a shotgun fashion by lumping together the defendants without specifically identifying which of the defendants engaged in the conduct alleged which would require the court to find out who’s on first and for what. Particularity for fraud-based allegations, including identification of each defendant’s own allegedly fraudulent conduct, is needed to apprise the defendants what they are charged with so they can mount a defense.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe
Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://lnkd.in/gwEYk.