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3D Global Solutions, Inc. v. MVM

May 12, 2008

3D GLOBAL SOLUTIONS, INC., PLAINTIFF,
v.
MVM, INC., DEFENDANT.



The opinion of the court was delivered by: Gladys Kessler United States District Judge

MEMORANDUM OPINION

Plaintiff 3D Global Solutions, Inc. ("3D") brings this action against Defendant MVM, Inc. ("MVM") for breach of contract (Count I), promissory estoppel (Count II), intentional misrepresentation (Count III), constructive fraud (Count IV), concealment (Count V), interference with business advantage (Count VI), unjust enrichment (Count VII), and conversion (Count VIII) arising from a commercial dispute between the parties.

This matter is before the Court on MVM's Motion for Partial Summary Judgment pursuant to Fed. R. Civ. P. 56 [Dkt. No. 6]; MVM's Motion to Dismiss Counts II through VIII of the First Amended Complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) [Dkt. No. 28]; and 3D's Motion for Summary Judgment pursuant to Fed. R. Civ. P. 56 [Dkt. No. 50]. Upon consideration of the Motions, Oppositions, Replies, and the entire record herein, and for the reasons stated below, MVM's Motion for Partial Summary Judgment [Dkt. No. 6] as to Count I is denied; MVM's Motion to Dismiss [Dkt. No. 28] is granted as to Counts II through V and VII through VIII and denied as to Count VI; and 3D's Motion for Summary Judgment [Dkt. No. 50] is denied.

I. BACKGROUND*fn1

In 2005, MVM obtained a contract from the United States Government to provide private security guards for deployment in Afghanistan. MVM turned to 3D to provide third country nationals to fulfill MVM's obligations under its government contract. A written contract memorializing the agreement between MVM and 3D was signed on September 26, 2005.

3D and MVM signed a new contract on October 12, 2005. 3D alleges that the October 12 contract incorporated the terms of the September 26 contract and permitted MVM the flexibility to assign additional task orders to 3D that would incorporate all the terms and conditions of the pre-existing September 26 contract. MVM responds that the October 12 contract involved the provision of security guards for service in Iraq and is separate and distinct from the September 26 contract, which involved the provision of security guards for service in Afghanistan, not Iraq. MVM argues that the parties have fully performed the October 12 contract and it therefore has no relevance to this case.

Pursuant to its agreement with MVM, 3D provided 292 third country national security guards for service in Afghanistan. Of this group, 230 security guards actually deployed to Afghanistan.

3D alleges that it expended thousands of hours of effort to collect confidential and proprietary data regarding the third country national security guards. This proprietary information, which included background checks and medical records for each security guard, was collected and provided to MVM as an "administrative package." MVM then interviewed each security guard before he was deployed to Afghanistan. 3D alleges that MVM wrongfully converted the confidential and proprietary information contained in the administrative packages and then sold the data to a third party.

3D also contends that MVM failed to provide it with compensation for the third country national security guards that were provided. MVM responds that the U.S. Government notified it on December 2, 2005 that the security guards 3D had provided were not adequately proficient in English and therefore terminated the contract between MVM and the Government, resulting in $2 million in out-of-pocket damages to MVM. MVM claims that it engaged the services of ALTA Language Services, Inc., to test the English language proficiency of the third country national security guards.

According to MVM, the testing demonstrated that the vast majority of the guards had only minimal English language skills.

3D seeks $316,000 in compensatory damages and $2 million in punitive damages from MVM. MVM has brought a counterclaim, seeking $2 million in damages for breach of contract.

II. STANDARD OF REVIEW

A. Rule 56

Summary judgment may be granted "only if" the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c), as amended December 1, 2007; Arrington v. United States, 473 F.3d 329, 333 (D.C. Cir. 2006). In other words, the moving party must satisfy two requirements: first, demonstrate that there is no "genuine" factual dispute and, second, that if there is it is "material" to the case. "A dispute over a material fact is 'genuine' if 'the evidence is such that a reasonable jury could return a verdict for the non-moving party.'" Arrington, (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A fact is "material" if it might affect the outcome of the case under the substantive governing law. Liberty Lobby, 477 U.S. at 248.

In its most recent discussion of summary judgment, in Scott v. Harris, __ U.S. __, 127 S.Ct. 1769, 1776 (2007), the Supreme Court said,

[a]s we have emphasized, "[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 . . . (1986) (footnote omitted). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Liberty Lobby, 477 U.S. at 247-48.

However, the Supreme Court has also consistently emphasized that "at the summary judgment stage, the judge's function is not...to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Liberty Lobby, 477 U.S. at 248, 249. In both Liberty Lobby and Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000), the Supreme Court cautioned that "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts, are jury functions, not those of a judge" deciding a motion for summary judgment. Liberty Lobby, 477 U.S. at 255. In assessing a motion for summary judgment and reviewing the evidence the parties claim they will present, "the Court must draw all reasonable inferences in favor of the non-moving party." Reeves, 530 U.S. at 150. "To survive a motion for summary judgment, the party bearing the burden of proof at trial...must provide evidence showing that there is a triable issue as to an element essential to that party's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)." Arrington, 473 F.3d at 335.*fn2

B. Rule 12(b)(6)

"A motion to dismiss for failure to state a claim upon which relief can be granted is generally viewed with disfavor and rarely granted." Doe v. United States Dep't of Justice, 753 F.2d 1092, 1102 (D.C. Cir. 1985). The factual allegations of the complaint must be presumed true and liberally construed in favor of the ...


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