Sabre International Security v. Torres Advanced Enterprise Solutions, Inc. , 857 F. Supp. 2d 97 ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
SABRE INTERNATIONAL SECURITY )
)
Plaintiff, )
)
v. )
)
TORRES ADVANCED ENTERPRISE )
SOLUTIONS, INC., ) Civil Action 11-806 (GK)
)
Defendant. )
)
______________________________)
MEMORANDUM OPINION
Plaintiff, Sabre International Security (“Sabre”), a private
Iraqi security company, brings this action against Defendant,
Torres Advanced Enterprise Solutions, Inc. (“Torres”), a Virginia
limited liability company, for breach of contract, breach of
fiduciary and trust obligations, unjust enrichment, and tortious
interference with prospective economic advantage and business
relations. This matter is presently before the Court on Sabre’s
Motion to Dismiss Torres’ Counterclaims(“Sabre’s Motion to
Dismiss”) (December 20, 2011). Upon consideration of the Motion,
Opposition, Reply, and the entire record herein, and for the
reasons set forth below, Sabre’s Motion is granted in part and
denied in part.
I. Background
A. Factual Backgound
Sabre is a private security contractor providing security
services around the world to various entities, including the U.S.
Government. Complaint (“Compl.”) ¶ 1. On September 27, 2007, Sabre
won one of several U.S. Government Theater-wide Internal Security
Services Multiple Task Order Contracts, number W91GDW-07-D-4026
(“TWISS I Contract”), to provide security services to U.S. military
installations in Iraq. Id. ¶ 6. On November 8, 2007, in connection
with this Contract, Sabre entered into a subcontractor agreement
with Torres (“2007 Subcontractor Agreement”). Id. ¶ 7. Pursuant to
this Agreement, Torres agreed to provide personnel holding valid
U.S. Government security clearances to work on Sabre’s TWISS I
projects. Id.
In 2009, the U.S. Government amended its policies for TWISS I
contracts by requiring that prime contractors, like Sabre, possess
a U.S. Defense Department Industrial Security Program Facility
Security Clearance at the Secret Level (“Secret FCL”). Id. ¶ 11.
Sabre, as a non-U.S. company, was not eligible for a Secret FCL.
Id. Accordingly, to avoid termination of the TWISS I Contract,
Sabre and Torres entered into a novation of the TWISS I Contract on
December 30, 2009. Id. ¶¶ 12-13. Pursuant to the novation, known as
the Asset Purchase Agreement (“APA”), Torres became the prime
contractor and Sabre the subcontractor. Id.
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According to Sabre, the APA included two additional agreements
as annexes (or addendums): (1) “[a] form of subcontract between
Torres and Sabre for TWISS I security services that was to take
effect upon the U.S. Government’s approval of the novation” (the
“APA Sabre Services Subcontract”); and (2) “[a] form of equipment
lease agreement between Sabre and Torres for lease from Sabre to
Torres of all equipment necessary for performance of the TWISS I
Task Orders that was to take effect upon the U.S. Government’s
approval of the novation” (the “APA Sabre Lease Agreement”). Id. ¶
13.
Sabre alleges that, under these three “agreements,” Sabre was
entitled to payment of pre-novation rates and that Torres was
obligated to “issue priced [] TWISS I Subtask Orders to Sabre
promptly after the TWISS I Novation that would give effect to
[this] understanding[].” Id. ¶¶ 41-42. On February 5, 2010, the
U.S. Government approved the novation. Id. ¶ 3. According to Sabre,
after the novation, Torres breached its contractual obligations by
failing to pay Sabre’s TWISS I invoices at the rates established
under the APA and its accompanying annexes, and by failing to put
the TWISS I Subtask Orders in place. Id. ¶¶ 228-29.
On August 6, 2009, Sabre and Torres entered into a Teaming
Agreement to bid on one of several Government Theater-wide Internal
Security Services Multiple Task Order Contracts, number W91DGW-09-
D-4030 (“TWISS II Contract”), which would replace existing TWISS I
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contracts. Id. ¶¶ 53, 61. To be eligible for a TWISS II Contract,
the prime contractor was required to hold a Secret FCL as well as
a Private Security Company (“PSC”) License from the Iraqi Ministry
of the Interior. Id. ¶¶ 58-59. Under the Teaming Agreement, Torres,
which held a Secret FCL, was designated as the Leading Member and
Sabre, which held a PSC License, but did not hold a Secret FCL
License, was designated as a Member. Id. ¶ 61.
The Sabre-Torres team (“Team”) then bid for a TWISS II
Contract, which they won on August 25, 2009. Id. ¶¶ 62, 86. In
accordance with TWISS II Contract procedures, the Team then
competed for several TWISS II Task Order Requests (“TWISS II
TORs”), which the Government issued for each military base that
required security services. Id. ¶¶ 90, 106. The Team competed for
these TWISS II TORs by submitting Task Order Proposals (“TWISS II
Task Order Proposals”) to the U.S. Government, and was ultimately
successful in obtaining several TWISS II TORs. Id. ¶¶ 91, 106, 108.
According to Torres, in May 2010, Sabre breached the Teaming
Agreement by failing to provide timely substantive responses to
Torres’ questions for additional information, which Torres needed
to prepare a competitive task order proposal for Forward Operating
Base (“FOB”) Adder. Torres Answer and Counterclaims ¶¶ 20-25, 46
(“Torres Counterclaims”) [Dkt. No. 42]. Torres alleges that, on
May 21, 2010, Torres notified Sabre that it was in breach of the
Teaming Agreement. Id ¶ 26. According to Torres, Sabre did not
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respond to the notice or attempt to cure its breach, and therefore,
the Teaming Agreement terminated effective June 20, 2010. Id. ¶ 27.
Torres also alleges that Sabre deliberately decided to no-bid
certain FOB task order requests. Id. ¶ 48. Torres further alleges
that, instead of attempting to resolve the dispute in accordance
with the conflict-resolution provisions of the Teaming Agreement,
Sabre complained directly to the Defense Contract Management Agency
(“DCMA”), causing reputational harm to Torres, which had an adverse
impact on Torres’ ability to compete for other government
contracts. Id. ¶¶ 52-57.
B. Procedural Background
On April 29, 2011, Sabre filed its Complaint. On May 27, 2011,
Torres filed its Motion for Dismissal of the Complaint and for
Partial Summary Judgment [Dkt. No. 21]. On July 25, 2011, Sabre
filed its Opposition to Defendant’s Rule 12(b)(6) Motion to Dismiss
the Complaint [Dkt. No. 30]. On July 26, 2011, Sabre filed its
Opposition to Defendant’s Rule 56 Motion for Partial Summary
Judgment [Dkt. No. 32]. On August 19, 2011, Torres filed its Reply
in Support of its Motion for Dismissal of the Complaint and for
Partial Summary Judgment [Dkt. No. 34]. On October 27, 2011, the
Court granted in part and denied in part Torres’ Motion for
Dismissal of the Complaint and for Partial Summary Judgment [Dkt.
No. 39].
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On November 15, 2011, Torres filed its Answer and
Counterclaims [Dkt. No. 42]. On December 20, 2011, Sabre filed its
Motion to Dismiss Sabre’s Counterclaims [Dkt. No. 45]. On January
9, 2012, Torres filed its Opposition to Sabre’s Motion to Dismiss
its Counterclaims (“Torres’ Opposition”) [Dkt. No. 48]. On January
27, 2012, Sabre filed its Reply in Support of its Motion to Dismiss
Torres’ Counterclaims (“Sabre’s Reply”) [Dkt. No. 51].
II. Standard of Review
To survive a motion to dismiss under Rule 12(b)(6), a
plaintiff need only plead “enough facts to state a claim to relief
that is plausible on its face” and to “nudge[] [his or her] claims
across the line from conceivable to plausible.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “[A] complaint [does not]
suffice if it tenders naked assertions devoid of further factual
enhancement.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)
(internal quotations omitted) (citing Twombly, 550 U.S. at 557).
Instead, the complaint must plead facts that are more than “merely
consistent with” a defendant’s liability; “the pleaded factual
content [must] allow[] the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Id. at
1940 (citing Twombly, 550 U.S. at 556). In deciding a Rule 12(b)(6)
motion, the court may consider any documents attached to or
incorporated into the complaint, matters of which the court may
take judicial notice, and matters of public record. EEOC v. St.
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Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997).
“[O]nce a claim has been stated adequately, it may be
supported by showing any set of facts consistent with the
allegations in the complaint.” Twombly, 550 U.S. at 563. Under the
standard set forth in Twombly, a “court deciding a motion to
dismiss must . . . assume all the allegations in the complaint are
true (even if doubtful in fact) . . . [and] must give the plaintiff
the benefit of all reasonable inferences derived from the facts
alleged.” Aktieselskabet, 525 F.3d at 17 (citations and internal
quotations omitted). See also Tooley v. Napolitano, 586 F.3d 1006,
1007 (D.C. Cir. 2009) (declining to reject or address the
government’s argument that Iqbal invalidated Aktieselskabet).
III. Analysis
A. The Plain Language of the Teaming Agreement Does Not
Support Dismissal of Torres’ Counterclaims
Sabre argues that Torres’ counterclaims for breach of contract
and tortious interference fail as a matter of law because Torres
has not exhausted mandatory alternative dispute resolution (“ADR”)
as provided in Section 7 of the Teaming Agreement.1 Sabre contends
that the plain language of “Section 7.0 is so broad and inclusive
as to clearly and unambiguously establish satisfaction of the
requirements of Section 7.0 as a condition precedent to any party
1
Sabre notes, and Torres concedes, that Torres did not plead
factual allegations in its Answer and Counterclaims that Torres
engaged in ADR pursuant to Section 7.
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to the Teaming Agreement commencing formal litigation as to ‘any
dispute or disagreement between the Members (Torres and Sabre)
concerning, arising out of or related to the [Teaming] Agreement.’”
Sabre’s Motion to Dismiss at 20-21 (quoting Teaming Agreement § 7.1
[Dkt. No. 22-2]). Sabre concludes that because Torres has not
complied with Section 7’s ADR requirement, it is barred from
proceeding on its counterclaims in this Court.
Torres disputes Sabre’s construction of Section 7 and argues
that the plain language of the “unambiguous provision establishes
that the requirement for informal dispute resolution is a condition
precedent prior to the initiation of formal litigation.” Torres
Opposition at 7. Torres further argues that, “[e]ven if the meaning
of Section 7 were not clear [] any ambiguity that Section 7 could
be said to have would preclude dismissal under Rule 12(b)(6)”
because under District of Columbia law, “Torres is entitled to a
reasonable inference that Section 7 does not, and was not intended
to, apply with respect to compulsory counterclaims asserted after
one party has already turned to the courts for relief.” Id. at 8.
In interpreting contractual terms, the Court must adhere to
the objective law of contracts, “whereby the written language
embodying the terms of an agreement will govern the rights and
liabilities of the parties, irrespective of the intent of the
parties at the time they entered the contract, unless the written
language is not susceptible of a clear and definite undertaking, or
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unless there is fraud, duress or mutual mistake.” Marra v.
Papandreou, 59 F. Supp. 2d 65, 76 (D.D.C.1 999), aff'd 216 F.3d
1119 (D.C. Cir. 2000); see also Patterson v. District of Columbia,
795 A.2d 681, 683 (D.C. 2002). Whether a contract is ambiguous is
a question of law to be determined by the court. Dist. No. 1-Pac.
Coast Dist. v. Travelers Cas. & Sur. Co., 782 A.2d 269, 274 (D.C.
2001); Holland v. Hannan, 456 A.2d 807, 815 (D.C. 1983).
A contract is not ambiguous merely because the parties dispute
its meaning or could have drafted clearer terms. Dist. No. 1-Pac.
Coast Dist., 782 A.2d at 274. Rather, a contract is ambiguous when
it or its provisions are reasonably or fairly susceptible of
different constructions or interpretations, or of two or more
different meanings. Holland, 456 A.2d at 815. Conversely, a
contract is unambiguous when a court can ascertain the contract's
meaning by merely looking at the contract. Id. If the language is
unambiguous, “the court may interpret it as a matter of law.”
America First Inv. Corp. v. Goland, 925 F.2d 1518, 1520 (D.C. Cir.
1991).
The Court concludes that the Teaming Agreement is unambiguous
and that the plain language of Section 7 does not support dismissal
of Torres’ counterclaims. Section 7.1 of the Teaming Agreement
states that, “[i]n the event of there being any dispute or
disagreement between the Members to this Agreement concerning,
arising out of or related to Agreement [] [it] shall be first
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referred to non-binding alternative dispute resolution in the
manner set out in Subsections 7.1(A) and 7.2. . . .” Teaming
Agreement § 7.1 (emphasis added). Section 7.1 expressly provides
that Sections 7.1(A) and 7.2 will set out the specific manner in
which ADR is to be conducted. Section 7.2 goes on to unambiguously
state that “[p]rior to the initiation of formal litigation
procedures . . . the parties shall first attempt . . . to resolve
their dispute informally. . . .” Teaming Agreement § 7.2 (emphasis
added).
Section 7 of the Teaming Agreement clearly requires the
parties to pursue ADR only if formal litigation procedures have not
yet commenced, i.e., “prior to the initiation of formal litigation
procedures.”2 Obviously, the matter presently before the Court is
a “litigation procedure[]” within the meaning of Section 7 of the
Teaming Agreement. There is also no question that Torres’
counterclaims arise out of the same operative set of facts at issue
in Sabre’s TWISS II claims against Torres, and that both Sabre’s
claims and Torres’ counterclaims implicate the Teaming Agreement.
Accordingly, Torres’ counterclaims are not subject to Section 7's
2
From a common-sense standpoint, the purpose of a pre-
litigation ADR clause would not be served by requiring the
defendant to pursue informal resolution of his counterclaims before
asserting those counterclaims in ongoing litigation. Generally, the
purpose of an ADR clause is to promote efficient resolution of
disputes by, if possible, avoiding the considerable costs of
litigation. Sabre’s construction of the Teaming Agreement would
increase the cost of resolving this dispute by requiring piecemeal
litigation; a result that runs contrary to the purpose of ADR.
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requirement for informal dispute resolution. Therefore, Sabre’s
Motion to Dismiss as to Torres’ Counterclaim for Breach of Contract
is denied.
B. Torres Fails to State a Claim for Tortious Interference
Sabre argues that Torres’ counterclaim for tortious
interference with existing or prospective business relations is
“fatally defective because the counterclaim[] fails to allege facts
that, if proven, would establish Sabre[’s] intentional interference
with any such purported relationships.” Sabre’s Motion to Dismiss
at 23. More specifically, Sabre contends that Torres’ tortious
interference claim is predicated entirely upon two alleged breaches
of the Teaming Agreement by Sabre and that “the only inference that
can be drawn from such factual allegations is that Torres is
alleging that Sabre intended to breach the Teaming Agreement.” Id.3
In response to Sabre’s argument that Torres has not alleged
facts that would support an inference that Sabre intentionally
interfered with Torres’ existing and prospective business
relations, Torres contends that “Sabre ignores a fundamental
premise for this Court’s analysis under Rule 12(b)(6): the Court
must assume that all allegations in the counterclaim are true, even
3
Sabre also argues that Torres’ counterclaim for tortious
interference fails as a matter of law for other, independent
reasons. Given the Court’s conclusion, infra, that Torres’
counterclaim for tortious interference fails as a matter of law
because Torres failed to properly allege tortious intent, it is not
necessary to address the merits of Sabre’s additional arguments.
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if doubtful in fact, and draw all reasonable inferences in favor of
the non-moving party.” Torres Opposition at 13. Torres argues
that its allegations, taken as true, support an inference that
Sabre acted improperly to interfere with Torres’ existing and
prospective business relationships.
To establish a claim for tortious interference with existing
or prospective business relations under District of Columbia law,
the alleging party must plead (1) the existence of a valid business
relationship or expectancy, (2) knowledge of the relationship or
expectancy on the part of the alleged interferer, (3) intentional
interference inducing or causing a breach or termination of the
relationship or expectancy, and (4) resultant damage. Bennett
Enters., Inc. V. Domino’s Pizza, Inc., 45 F.3d 493, 499 (D.C. Cir.
1995).
Sabre is correct that Torres’ counterclaim for tortious
interference is fatally defective. A thorough review of Torres’
Answer and Counterclaims reveals no allegations sufficient to
establish a legally-cognizable claim for tortious interference.
Torres does adequately allege that it had a valid business
relationship or expectancy with the Government, that Sabre had
actual knowledge of Torres’ relationship or expectancy, and that
Sabre’s complaints to the Government about Torres resulted in
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damage to Torres.4 However, Torres’ allegations with respect to
Sabre’s intent cannot withstand Sabre’s motion to dismiss. Torres
alleges that “Sabre violated the Teaming Agreement when it
complained to the Government about Torres” and that “Sabre
intentionally breached the Teaming Agreement’s provisions
concerning conflict resolution and alternative dispute resolution.”
Id. ¶¶ 55, 57.
As a case relied upon by both Sabre and Torres demonstrates,
in order to survive a motion to dismiss, a claimant must allege far
more than a “general intent to interfere or knowledge that the
conduct will injure [its] business dealings.” Sheppard v. Dickson,
Shapiro, Morin & Oshinsky, 59 F. Supp. 2d 27, 34 (D.D.C. 1999).
“‘Motive or purpose to disrupt ongoing business relationships is of
central concern in a tortious interference case. . . .[C]onduct
must be more egregious, for example, it must involve libel, slander
physical coercion, fraud, misrepresentation, or disparagement.’”
Id. (quoting Genetic Sys. Corp. v. Abbott Labs., 691 F. Supp. 407,
423 (D.D.C. 1998)).
4
Torres alleges that it had “several business relationships
with different Government agencies and is constantly preparing new
proposals for submission on various Government contract
opportunities.” Torres Counterclaim ¶ 53. Torres also alleges that
Sabre had actual knowledge of Torres’ existing and prospective
business relationships with the Government and that Sabre had
actual knowledge that Torres’ reputation and past performance
history are important for retaining existing contracts and
competing for future contracts. Id ¶ 54. Torres further alleges
that as a direct result of Sabre’s conduct, Torres suffered
damages. Id ¶ 57.
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Even viewing Torres’ allegations as true, they cannot be read
to reasonably infer intent on the part of Sabre to tortiously
interfere with Torres’ business relationships or expectancies.
Torres’ Answer and Counterclaims is silent as to Sabre’s intent to
interfere with Torres’ business relations, and does not cite any
statements that constitute slander, libel, misrepresentations or
disparagement. Torres alleges only that “Sabre complained to the
Government about Torres” and intentionally breached the Teaming
Agreement’s ADR provision by alerting the Government to the
parties’ payment dispute. Torres Counterclaim ¶¶ 55, 57. Sabre is
correct that, at most, Torres alleges that Sabre intended to breach
the Teaming Agreement, which is insufficient for purposes of
stating a claim for tortious interference. Therefore, Sabre’s
Motion to Dismiss Torres’ Counterclaim for Tortious Interference is
granted.
IV. CONCLUSION
For all the reasons stated herein, Sabre’s Motion to Dismiss
Torres’ Counterclaims is granted in part and denied in part. An
Order will accompany this Memorandum Opinion.
/s/
April 30, 2012 Gladys Kessler
United States District Judge
Copies via ECF to all counsel of record
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