Sabre International Security v. Torres Advanced Enterprise Solutions, LLC , 60 F. Supp. 3d 36 ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SABRE INTERNATIONAL SECURITY,
Plaintiff,
v. Civil Action No. 11-806 {GK)
TORRES ADVANCED ENTERPRISE
SOLUTIONS, LLC, et al.,
Defendants.
MEMORANDUM ORDER
Individual Defendants Jerry Torres, Scott Torres, Rebekah
Dyer, and Kathryn Jones (collectively, the "Individual
Defendants"), have filed two Motions for Judgment on the
Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil
Procedure [Dkt. Nos. 363 & 366]. On July 17, 2015, Sabre filed
a single omnibus Opposition [Dkt. No. 368], and on July 28,
2014, the Individual Defendants filed their Replies [Dkt. Nos.
369 & 370] . 1
The Motions shall be granted in part and denied in part for
the following reasons.
1
Jerry Torres filed a Motion ("Jerry Torres Mot.") [Dkt. No.
363], and Rebekah Dyer, Kathryn Jones, and Scott Torres jointly
filed an almost identical Motion ("Jt. Mot.") [Dkt. No. 366].
Because the Motions make exactly the same arguments, often word
for word, the Court shall cite only to Jerry Torres' Motion.
1. The factual and procedural background in this case has
been set forth in great detail in the Court's Memorandum
Opinions of January 30, 2014 [Dkt. No. 288] and June 16, 2014
[Dkt . No. 3 59] . See generally Sabre Int'l Sec. v. Torres
Advanced Enter. Solutions, LLC, No. 11-806, 2014 WL 341071(D.D.C. Jan. 30, 2014) ("Sabre III"), appeal dismissed, No. 14-
7026, 2014 WL 1378771 (D.C. Cir. Apr. 3, 2014); Sabre Int'l Sec.
v. Torres Advanced Enter. Solutions, LLC, No. 11-806, 2014 WL
3859164 (D.D.C. June 16, 2014) ("Sabre IV"). Familiarity with
these prior decisions is assumed.
2. Sabre International Security ("Sabre") is an Iraqi
private security company. Torres Advanced Enterprise Solutions,
LLC ("Torres") is an American private security company, of which
the Individual Defendants are current and former officers.
Between 2007 and 2010, Sabre and Torres partnered as prime
contractor and subcontractor to perform security contracts for
the United States Government at military installations in Iraq.
3. On April 29, 2011, Sabre filed this lawsuit against
Torres for breach of contract and related torts. In October
2013, Sabre obtained permission to file, and did file, a First
Amended Complaint ( "FAC") [Dkt. No. 242] . The FAC included all
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of the claims alleged in the original Complaint (Counts 1-14) 2
and seven new claims against Torres and the Individual
Defendants for fraud, misappropriation, and conversion of
property (Counts 15-21) .
4. Torres then filed a Motion Pursuant to Fed. R. Civ. P.
12 (b) (6) to Dismiss Counts 15-18 and 20-22 of the FAC [Dkt. No.
253]. 3 On January 3 0, 2 014, the Court partially granted that
Motion and dismissed all of the FAC' s newly asserted Counts
other than Count 18, which it concluded adequately stated a
claim for conversion of property. See generally Sabre III, 2014
WL 341071, at *3-9 (D.D.C. Jan. 30, 2014).
5. Relying on many of the same arguments underlying
Torres' Motion to Dismiss, the Individual Defendants now seek
Judgment on the Pleadings as to Counts 15-20 of the FAC. 4
2
Some of these Counts were dismissed by the Court's Memorandum
Opinion of October 27, 2011 [Dkt. No. 39] . See generally Sabre
Int '1 Sec. v. Torres Advanced Enter. Solutions, Inc., 820 F.
Supp. 2d 62 (D.D.C. 2011) ("Sabre I").
3
Sabre's Motion to Amend its Complaint attached a Proposed FAC
that included Counts 15-22 [Dkt. No. 197-1]. When the Court
granted that Motion, Sabre withdrew the previously proposed
Count 21 and renumbered its counts so that the actual FAC
included only Counts 15-21 [Dkt. No. 242] Torres, however,
based its Motion to Dismiss on the 22-Count Proposed FAC, rather
than the actual FAC.
4
Like Torres, the Individual Defendants also appear to have
based their Motion on the 22-Count Proposed FAC rather than the
actual FAC. As a result, their Motions request judgment on
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6. The standard governing a motion for judgment on the
pleadings under Fed. R. Civ. P. 12 (c) "is essentially the same
as the standard for a motion to dismiss brought pursuant to
Federal Rule of Civil Procedure 12(b) (6) " Longwood Vill.
Rest., Ltd. v. Ashcroft, 157 F. Supp. 2d 61, 66-67 (D.D.C.
2001). To survive the motion, the "complaint must contain
sufficient factual matter, accepted as true, to 'state a claim
to relief that is plausible on its face.'" Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 u.s. 544 (2007)). A claim is facially plausible when the
pleaded factual content "allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. at 678.
7. In Count 15, Sabre claims that the Individual
Defendants fraudulently concealed their intent not to pay Sabre
in accordance with previously agreed-upon pricing schemes. In
Sabre III, the Court concluded that this Count is "entirely
intertwined [with], if not wholly duplicative of[,] Sabre's
claim that [Torres] breached the Teaming Agreement." Id. at *3.
Consequently, the Court held that this claim is barred by
District of Columbia case law holding that- "even a 'willful,
Counts 15-21 of the Proposed FAC but only Counts 15-20 of the
actual FAC.
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wanton or malicious' breach of a contract . cannot support a
claim of fraud" because "disputes relating to contractual
obligations 'should generally be addressed within the principles
of law relating to contracts[.]'" Id. at *3 (citing Choharis v.
State Farm and Casualty Co., 961 A.2d 1080, 1089 (D.C. 2008)).
This holding applies equally to the Individual Defendants. 5
Therefore, the Motions shall therefore be granted on Count 15.
8. In Count 16, Sabre asserts a claim for fraud based on
representations Torres allegedly made to the Government in
October 2010 as to whether Sabre had been paid. In Sabre III,
the Court held that Sabre relied only on its own assumptions
regarding what Torres could do or say, not on what Torres
actually did or said, and therefore, that Count 16 did not state
a claim for fraud. Id. at *4-5. This holding applies equally to
the Individual Defendants. Therefore, the Motions shall be
granted on Count 16.
5
Sabre argues, as it did in its Opposition to Torres' Motion,
that it has asserted a claim for fraudulent inducement, as to
which Choharis does not apply. See Pl.'s Opp'n at 6-19. The
Court already rejected this argument in Sabre III, however, and
that ruling is "law of the case." See, e.g., Coal. for Common
Sense in Gov't Procurement v. United States, 707 F.3d 311, 318
(D.C. Cir. 2013) (explaining that under the law-of-the-case
doctrine, "the same issue presented a second time in the same
case in the same court should lead to the same result" (citing
LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996)).
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9. In Count 17, Sabre claims that Torres fraudulently
misappropriated its Private Security Company ("PSC") license and
engaged in unfair competition by bidding on certain contracts
without informing Sabre. In Sabre III, the Court held that this
Count failed to state a claim of fraud, misappropriation, or
unfair competition, id. at *6, a holding that applies equally to
the Individual Defendants. Therefore, the Motions shall be
granted on Count 17.
10. In Count 18, Sabre claims that Torres unlawfully
converted its PSC license and certain life support equipment it
owned at one of the Team's sites in Iraq. In Sabre III, the
Court held that Sabre failed to state a claim for conversion of
the PSC license but did state a claim for conversion of the life
support equipment. Sabre III, 2014 WL 341071, at *7. The
Court's holding as to conversion of the PSC license applies
equally to the Individual Defendants, which Sabre does not
contest.
As to the conversion of equipment claim, the Individual
Defendants argue that they are entitled to judgment on the
pleadings because Sabre alleges only that Torres sold the life
support equipment and retained the proceeds, not that they did
so in their personal capacities. Jerry Torres Mot. at 21. The
law in the District of Columbia is well-established, however,
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that u[c]orporate officers 'are personally liable for torts
which they commit, participate in, or inspire, even though the
acts are performed in the name of the corporation.'" Lawlor v.
Dist. of Columbia, 758 A.2d 964, 974-75 (D.C. 2000) (citing
Vuitch v. Furr, 482 A.2d 811, 821 (D.C. 1984)). urn other
words, corporate officers cannot avoid personal liability
for wrongs committed [by the corporation] with their
knowledge and with their consent or approval [.]" Vuitch, 482
A.2d at 821 (internal quotations omitted). Liability must,
however, ube premised upon a corporate officer•s meaningful
participation in the wrongful acts." Lawlor, 758 A.2d at 977.
Sabre has alleged that that uJerry Torres, Rebekah Dyer and
Kathryn Jones willfully and maliciously authorized and
implemented the sale of [its] property at JSS Shield [one of the
Team's security sites] [while] fully aware that the
property and proceeds belonged to Sabre." FAC ~ 469. The high
level positions of these individuals, as well as their alleged
close involvement in the events at issue, raise a plausible
inference that they umeaningful[ly] participat[ed]" in the sale
of Sabre's life support equipment with knowledge that it
belonged to Sabre. Lawlor, 758 A.2d at 977. This is sufficient
to survive a motion under Rule 12(c) because the precise extent
of an officer's uparticipation in and responsibility for the
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alleged [conversion is] a quintessential question of fact that
[can]not be answered at the pleading stage." Luna v. A.E. Eng'g
Servs., LLC, 938 A.2d 744, 748 (D.C. 2007) Thus, Sabre has
adequately alleged that Jerry Torres, Dyer, and Jones are liable
in their individual capacities for Torres' conversion of
equipment. 6
Sabre has not, however, alleged any basis to hold Scott
Torres liable for conversion of property. Furthermore, in its
Opposition brief, it argues only that "the Individual Defendants
(other than Scott Torres)" participated in Torres' conversion of
property. Pl.'s Opp'n at 21 (emphasis added). Therefore, the
conversion claim against Scott Torres shall be dismissed.
For the foregoing reasons, the Motions shall be denied
insofar as Sabre seeks to hold Jerry Torres, Rebekah Dyer, and
Kathryn Jones liable for conversion of equipment and shall
otherwise be granted.
11. In Count 19, Sabre alleges again that the Individual
Defendants are liable for fraud, unauthorized use of its PSC
license, and conversion of property. These are precisely the
6
Sabre has also alleged that Jerry Torres, Dyer, and Jones
"aided and abetted" Torres' conversion of equipment. Pl.'s
Opp'n at 20-22. The Court need not reach the sufficiency of
such allegations given its conclusion that Sabre has adequately
alleged a claim of direct liability against these Defendants.
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same allegations asserted in Counts 15-18 and, therefore, they
shall be dismissed as duplicative.
Count 19 also asserts a claim for unjust enrichment. Under
District of Columbia law, the elements of a claim for unjust
enrichment are: (1) the plaintiff conferred a benefit on the
defendant; (2) the defendant retains the benefit; and (3) under
the circumstances, the defendant's retention of the benefit is
unjust." News World Commc'ns, Inc. v. Thompsen, 878 A.2d 1218,
1222 (D.C. 2005).
Sabre claims that the Individual Defendants were unjustly
enriched by: ( 1) their alleged misrepresentations to Sabre
regarding payment and prices; (2) Torres' use of Sabre's PSC
license; (3) Torres' alleged misrepresentations to the
Government regarding payments to Sabre; and ( 4) Torres'
conversion of property. See FAC `` 467-70. Sabre has not,
however, alleged that, as a result of these circumstances, it
conferred any benefit on the Individual Defendants directly.
Instead, it alleges that it conferred a benefit on Torres, who
subsequently paid salaries and bonuses to the Individual
Defendants. Not a single factual allegation in the FAC,
however, connects the Individual Defendants' salaries and
bonuses to Torres' alleged reductions of Sabre's prices, use of
its PSC license, sale of its equipment, or misrepresentations to
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the Government. Accordingly, even if salaries and bonuses might
theoretically constitute a benefit for purposes of an unjust
enrichment claim, Sabre has not plausibly alleged that it had
any role in conferring these benefits on the Individual
Defendants or, relatedly, that the Individual Defendants'
retention of such benefits was unjust. Therefore, Sabre has not
stated a claim for unjust enrichment against the Individual
Defendants and the Motions shall be granted on Count 19.
12. Finally, Sabre does not oppose the Individual
Defendants' Motions for judgment on Count 20, which is entitled
"Lost Sabre Revenues and Delay Damages through Torres'
Breaches." Consequently, the Motions shall be granted as
unopposed on that Count. 7
For the reasons set forth above, it is hereby
ORDERED, that the Motions for Judgment on the Pleadings are
granted in part and denied in part; and it is further
ORDERED, that judgment is granted for Scott Torres on
Counts 15-20 of the FAC and he is dismissed from the case in its
entirety; and it is further
7
The Individual Defendants also seek judgment in their favor as
to Count 20 of the Proposed FAC (entitled "Misappropriation of
Sabre's Past Performance") , but that request is moot because
Sabre voluntarily withdrew that claim in its actual FAC. See
Jerry Torres Mot. at 23.
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ORDERED, that judgment is granted for Jerry Torres, Rebekah
Dyer, and Kathryn Jones on Counts 15-17 and 19-20 of the FAC.
The current status of the claims against the Individual
Defendants is as follows:
• Count 15: Motions for Judgment on the Pleadings
granted and claim dismissed in its entirety.
• Count 16: Motions for Judgment on the Pleadings
granted and claim dismissed in its entirety
• Count 17: Motions for Judgment on the Pleadings
granted and claim dismissed in its entirety
• Count 18: As to Defendant Scott Torres, Motion for
Judgment on the Pleadings granted and claim dismissed
in its entirety; as to Jerry Torres, Rebekah Dyer, and
Kathryn Jones, Motions for Judgment on the Pleadings
denied as to conversion of equipment; Motions granted
as to all other theories.
• Count 19: Motions for Judgment on the Pleadings
granted and claim dismissed in its entirety
• Count 2 0: Motions for Judgment on the Pleadings
granted and claim dismissed in its entirety
• Count 21: Claim dismissed by Court Order dated January
30, 2014 [Dkt. No. 287] 8
8
The Individual Defendants have not sought Judgment on the
Pleadings as to this Count (Count 22 in the Proposed FAC) , which
asserts a claim against Torres, Jerry Torres, and Rebekah Dyer
for alleged fraud arising out of events in this litigation.
However, it should be noted that the Court previously granted
Torres' Motion to Dismiss this claim on three bases: ( 1) Sabre
has not alleged any detrimental reliance on the alleged fraud;
(2) Sabre has not cited any authority holding that bad faith
conduct in litigation gives rise to an independent cause of
action and the weight of binding authority is contrary; and (3)
Sabre has alternative remedies under Rule 37 of the Federal
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Therefore, as of August 21, 2014, Count 18 is awaiting
trial against Jerry Torres, Rebekah Dyer and Kathryn Jones.
August 21, 2014
Gladys Ke sler
United States District Judge
Copies to: attorneys on record via ECF
Rules of Civil Procedure. See Sabre III, 2014 WL 341071, at *8-
9 (citing Russell v. Principi, 257 F.3d 815, 821 (D.C. Cir.
2 0 01) ("Plaintiff's] effort to pursue an independent cause of
action for bad faith litigation abuse against [defendant] fails.
[T]o date no circuit court has held that a federal cause
of action exists") ; Interstate Fire & Cas. Co., Inc. v. 1218
Wisconsin, Inc., 136 F. 3d 830, 836 (D.C. Cir. 1998) (rejecting
tort claim for "fraud on the court" because "[a]lthough the act
complained of is styled a 'fraud,' the remedy lies within the
court's equitable discretion") (citations omitted)).
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