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The court reviews de novo the district court's decision to grant a Fed. R. Civ. P. 12(b)(6) motion to dismiss. Dismissal for failure to state a claim is appropriate only if there is no set of facts that could be proven consistent with the allegations in the complaint that would entitle the plaintiff to relief.
Plaintiff licensees, Power Entertainment, Inc., Gerry Griggs, and Robert Thurmond, sued the defendant licensor, National Football League Properties, Inc., for breach of contract, alleging that defendant agreed to transfer to plaintiffs a license to sell defendant's collectible cards in return for plaintiffs' promise to assume an obligation owed to defendant by debtor. Defendant removed the suit to federal district court on the basis of diversity jurisdiction. The district court then granted defendant’s motion to dismiss, under Fed. R. Civ. P. 12(b)(6) on grounds that the alleged contract was unenforceable pursuant to the suretyship statute of frauds, Tex. Bus. & Com. Code Ann. § 26.01(a),(b)(2), because the contract was not in writing. Plaintiffs appealed.
Did the district court correctly dismiss plaintiffs’ claims on the basis of the statute of frauds?
The court noted that the main purpose doctrine removed an oral agreement to pay the debt of another from the statute of frauds wherever the main purpose and object of the promisor was not to answer for another, but to subserve some purpose of his own. Because plaintiffs might be able to show that the alleged oral agreement fell outside of the statute of frauds, the district court erred in dismissing the complaint based on the statute of frauds. The judgment was reversed and case remanded.