Dawn J. Bennett Holding, LLC v. Fedex Techconnect, Inc. ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
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DAWN J. BENNETT HOLDING, LLC, )
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Plaintiff, )
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v. ) Civil Action No. 16-1388 (ABJ)
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FEDEX TECHCONNECT, INC., )
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Defendant. )
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MEMORANDUM OPINION
Plaintiff Dawn J. Bennett Holding, LLC has brought this breach of contract and fraud
action against defendant FedEx TechConnect, Inc. Compl. [Dkt. # 1-2]. Plaintiff alleges that
defendant violated the parties’ pricing agreement by refusing to apply the correct discount rates to
plaintiff’s transportation fees, and by refusing to provide plaintiff with an accounting of payments
and discounts. Id. ¶¶ 8–11. Plaintiff also alleges that defendant defrauded it by misrepresenting
the size of the discounts it would receive under the pricing agreement. Id. ¶¶ 13–15. Defendant
has moved to dismiss the complaint for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6) on the grounds that the complaint is barred by res judicata, plaintiff failed to
adhere to the Agreement’s notice requirement, the complaint is time barred, the fraud claim is
preempted by federal law, and the complaint does not plausibly allege breach of contract or fraud.
Combined Mot. to Dismiss & Mem. of P. & A. in Supp. of Mot. to Dismiss [Dkt. # 7] (“Def.’s
Mot.”) at 4–12.
Plaintiff opposed the motion, but it did not address defendant’s arguments about the statute
of limitations, preemption, or the failure of the complaint to state a claim. See Pl.’s Opp. to Def.’s
Mot. [Dkt. # 9] (“Pl.’s Opp.”). In light of those concessions, and because, even setting the
concessions aside, the complaint is time barred, the Court will grant defendant’s motion.
BACKGROUND
Plaintiff sells “top-of-the line sports apparel and equipment to a world-wide market.”
Compl. ¶ 3. It makes over 10,000 shipments a year. Id. On April 9, 2012, plaintiff entered into a
pricing agreement with defendant, after defendant “aggressively began to solicit [plaintiff’s]
business.” Id. ¶ 5; see also Ex. A to Compl. [Dkt. # 1-2] (“Agreement”). The purpose of the
Agreement was to obtain improved transportation services at discounted rates. Compl. ¶ 5.
Plaintiff used defendant’s services from April 9, 2012 through February 2014, and it paid
defendant $139,036.76 in transportation fees. Id. ¶¶ 6, 10.
The Agreement expressly incorporates FedEx’s service guides:
Each shipment made with FedEx is subject to the country of origin
location’s terms and conditions of carriage and the FedEx Service Guide in
effect at the time of shipment, which terms are incorporated into this
Agreement by reference.
Agreement ¶ 2. All three relevant Service Guides for Express Shipments limit recovery for
“any . . . legal or equitable relief whatsoever” to “one year from the date of delivery of the
shipment or from the date on which the shipment should have been delivered.” Ex. 4 to Def.’s
Mot. [Dkt. # 7-4] (“2012 Service Guide”) at 9, 23; Ex. 5 to Def.’s Mot. [Dkt. # 7-5] (“2013 Service
Guide”) at 9, 23; Ex. 6 to Def.’s Mot. [Dkt. # 7-6] (“2014 Service Guide”) at 9, 24. And the
Service Guides for Ground Shipments limit recovery for “claims for overcharges” to “18 months
after the claim accrues.” 2012 Service Guide at 38; 2013 Service Guide at 38; 2014 Service Guide
at 39. The Service Guides for Ground Shipments define an “overcharge” as “a charge based on
an incorrect rate or an incorrect special handling fee.” 2012 Service Guide at 30; 2013 Service
Guide at 30; 2014 Service Guide at 31.
2
In January of 2014, plaintiff became concerned that it was not receiving the discounted
rates to which it was entitled based on its volume of business. Decl. of Anderson McNeill, Ex. A
to Compl. [Dkt. # 1-2] (“McNeill Decl.”) ¶ 6. In January of 2014, plaintiff’s Vice President and
General Merchandise Manager met with a FedEx representative who admitted that plaintiff’s
discount was “predicated at a lower level than the level of business it was providing FedEx,” and
that plaintiff “was entitled to a larger discount.” Id. ¶¶ 2, 6–8. 1 Plaintiff began to withhold
payments after that meeting. Id. ¶ 9. Plaintiff does not specify the date it began to withhold
payments, but in August 2014, a collection agency contacted plaintiff, seeking $22,377.98 in
unpaid transportation fees accumulated between February 25, 2014 and August 19, 2014. Id. ¶ 10.
On February 25, 2015, defendant filed suit in D.C. Superior Court to collect the unpaid
transportation fees. McNeill Decl. ¶ 10. While that action was pending, plaintiff filed its own
action on June 6, 2016 in Superior Court. Compl. Plaintiff alleged that defendant breached the
Agreement, and committed fraud in failing to give it the rates to which it was entitled. Id. ¶ 1.
On June 30, 2016, defendant timely removed plaintiff’s lawsuit to this Court. Notice of
Removal [Dkt. # 1]. On July 7, 2016, defendant moved to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6), asserting that plaintiff’s complaint is barred by res judicata because it
was fully adjudicated as a defense to defendant’s collection action in Superior Court. Def.’s Mot.
at 4–6. Defendant also contends that plaintiff failed to adhere to the Agreement’s notice
requirement, the complaint is time barred, the complaint does not adequately allege breach of
contract or fraud, and the fraud claim is preempted by federal law. Id. at 6–12. Plaintiff opposed
1 The McNeill Declaration lists paragraph 8 twice, and skips paragraph 7. The quoted
language comes from the first paragraph 8.
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the motion, but only addressed the res judicata and the notice requirement issues. 2 Pl.’s Opp. at
6–8. Defendant replied in support of its motion. Reply in Supp. of Def.’s Mot. to Dis. [Dkt. # 10]
(“Def.’s Reply”),
STANDARD OF REVIEW
“To survive a [Rule 12(b)(6)] motion to dismiss, a 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) (internal quotation marks omitted); accord Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). In Iqbal, the Supreme Court reiterated the two principles underlying its
decision in Twombly: “First, the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions.” 556 U.S. at 678. And “[s]econd,
only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679.
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. “The
plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Id. A pleading must offer more than “labels
and conclusions” or a “formulaic recitation of the elements of a cause of action,” id., quoting
Twombly, 550 U.S. at 555, and “[t]hreadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.” Id.
When considering a motion to dismiss under Rule 12(b)(6), the Court is bound to construe
a complaint liberally in the plaintiff’s favor, and it should grant the plaintiff “the benefit of all
2 Plaintiff did address the federal preemption issue, but only in connection to the breach of
contract claim. Pl.’s Opp. at 9–10. However, defendant limited its preemption argument to the
fraud claim, Def.’s Mot. at 12, and plaintiff never addressed federal preemption for the fraud claim
in its opposition. Because plaintiff never addressed federal preemption for fraud, the Court will
treat that argument as conceded as well.
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inferences that can be derived from the facts alleged.” Kowal v. MCI Commc’n Corp., 16 F.3d
1271, 1276 (D.C. Cir. 1994). Nevertheless, the Court need not accept inferences drawn by the
plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court
accept plaintiff’s legal conclusions. See id.; Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir.
2002). In ruling upon a motion to dismiss for failure to state a claim, a court may ordinarily
consider only “the facts alleged in the complaint, documents attached as exhibits or incorporated
by reference in the complaint, and matters about which the Court may take judicial notice.”
Gustave-Schmidt v. Chao, 226 F. Supp. 2d 191, 196 (D.D.C. 2002) (citations omitted). 3
ANALYSIS
I. Plaintiff conceded the arguments that it failed to address in its opposition to
defendant’s motion to dismiss.
Plaintiff addressed only two of the five arguments that defendant raised in its motion to
dismiss: the res judicata issue and the contractual notice issue. Pl.’s Opp. at 6–8. When a plaintiff
fails to address arguments made in a motion to dismiss, the Court may treat those arguments as
conceded. See LCvR 7(b) (“Within 14 days of the date of service or at such other time as the Court
may direct, an opposing party shall serve and file a memorandum of points and authorities in
opposition to the motion. If such a memorandum is not filed within the prescribed time, the Court
may treat the motion as conceded.”). “It is well understood in this Circuit that when a plaintiff
files an opposition to a motion to dismiss addressing only certain arguments raised by the
defendant, the court may treat those arguments that the plaintiff failed to address as conceded.”
Hopkins v. Women’s Div., Gen. Bd. of Glob. Ministries, 238 F. Supp. 2d 174, 178 (D.D.C. 2002),
citing FDIC v. Bender, 127 F.3d 58, 67–68 (D.C. Cir. 1997).
3 The complaint attached the Agreement, and the Agreement expressly incorporates the
Service Guides, which defendant attached to its motion. So the Court will consider the Agreement
and the Service Guides in resolving the motion.
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So plaintiff has conceded defendant’s arguments that the complaint is time barred, that the
complaint does not state a claim for breach of contract or fraud, and that the fraud claim is
preempted by federal law. Each of these conceded arguments would form an independent basis to
grant defendant’s motion to dismiss.
II. Even if plaintiff had not conceded the point, its complaint is time barred.
In the District of Columbia, the usual statutory period to bring an action for breach of
contract is three years. D.C. Code § 12-301(7). And while the D.C. Code does not explicitly
provide a statutory period for fraud claims, those claims are usually subject to a three-year
limitations period as well. See Id. § 12-301(8) (providing a three year limitation in circumstances
where “a limitation is not otherwise specifically prescribed.”); see also Firestone v. Firestone, 76
F.3d 1205, 1209 (D.C. Cir. 1996) (applying section 12-301(8) to fraud claims).
However, parties may shorten the statute of limitations by contract. See N. Valley
Commc’ns, LLC v. FCC, 717 F.3d 1017, 1019 (D.C. Cir. 2013). Here, plaintiff consented to a
shortened statute of limitations for claims brought under the Agreement. The Agreement
incorporates the FedEx Service Guide. Agreement ¶ 2. The Service Guide provides:
Any right you might have to damages, refunds, credits, recovery of reliance
interests, disgorgement, restitution, injunctive relief or any other legal or
equitable relief whatsoever against us under any cause of action arising from
the transportation of any package pursuant to the FedEx Service Guide shall
be extinguished unless you file an action within one year from the date of
delivery of the shipment or from the date on which the shipment should
have been delivered.
2012 Service Guide at 9; see also 2013 Service Guide at 9; 2014 Service Guide at 9. And for
ground shipments, the Service Guide provides:
Any civil claim for overcharges must be brought within 18 months after the
claim accrues.
6
Id. at 38; see also 2013 Service Guide at 38; 2014 Service Guide at 39. In the complaint, plaintiff
asks for an accounting from April 2012 through March of 2014, so there is no basis in the record
to conclude that the claim extends beyond March 2014 at the latest. Compl. (Relief Requested).
The complaint was filed in June of 2016 and the twenty-two months between March of 2014 and
that filing exceeds the contractual limitations period.
The February 2014 date is consistent with the declaration attached to the complaint. The
declaration indicates that plaintiff became aware of the overcharging in a meeting in January 2014,
asked for more information, and then began withholding funds itself to account for the
overcharging on some unspecified date thereafter. McNeill Decl. ¶¶ 6–9. When FedEx sued for
the withheld funds, it sought payments that had been withheld after February 25, 2014, see id.
¶ 10, so the inference that can be drawn from these facts is that the claimed overcharges continued
from April of 2012 until February 25, 2014. But in an abundance of caution, the Court will utilize
the March date set forth in the complaint. 4
4 Defendant contends that plaintiff is seeking to recover damages occurring “no later than
February 2014.” Def.’s Mot. at 9. Since plaintiff never addressed the date that the claim accrued
in its opposition to defendant’s motion to dismiss, the Court could find that plaintiff conceded the
issue.
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CONCLUSION
Because plaintiff conceded the argument made by defendant that the complaint is time
barred, and because the parties contractually agreed to a shortened period of limitations, the Court
finds that the complaint is in fact time barred. The Court will grant defendant’s motion and this
case will be dismissed.
A separate order will issue.
AMY BERMAN JACKSON
United States District Judge
DATE: November 8, 2016
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