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KBI Transport Services v. Medical Transportation Management

January 20, 2010

KBI TRANSPORT SERVICES, AND KATHEER B. IBRAHIM, PLAINTIFFS,
v.
MEDICAL TRANSPORTATION MANAGEMENT, INC., DEFENDANT.



The opinion of the court was delivered by: Henry H. Kennedy, Jr United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs KBI Transport Services and Katheer B. Ibrahim (collectively "KBI") bring this action against Medical Transportation Management, Inc. ("MTM"). KBI alleges that MTM failed to pay KBI, pursuant to a contract, for staff and services provided before MTM terminated that contract. KBI brings claims of breach of contract, fraudulent misrepresentation, negligence, and unjust enrichment. Before the Court is MTM's motion for partial dismissal [#6]. Upon consideration of the motion, the opposition thereto, and the record of this case, the Court concludes that the motion should be granted.

I. BACKGROUND

Ibrahim owns KBI Transport Services, a company that provides transportation related to the provision of health care-such as rides to doctor's offices or pharmacies-to individuals enrolled in Medicare. MTM acts as a broker between companies like KBI Transport Services and the District of Columbia.*fn1

Beginning October 17, 2007, KBI Transport Services*fn2 entered into a one-year agreement with MTM. According to KBI's complaint, MTM "unilaterally and unlawfully" terminated the contract on July 31, 2008. Compl. ¶ 18.*fn3 KBI alleges that MTM "refused to compensate" KBI for a balance of $20,248 owed to KBI for services provided before the termination of the contract. Id. ¶¶ 26-27.

KBI's complaint includes various claims, each brought by both plaintiffs. First, it alleges breach of contract, stating that KBI "performed its duties as specified by the Agreement" between the parties but MTM "failed to perform its duties." Id. ¶¶ 31-32. Next, it alleges fraudulent misrepresentation, stating that "MTM made false representations and/or willful omissions of one or more material facts," "MTM intended to induce reliance by KBI," and "KBI acted in reliance on the false representation(s) and/or willful omission(s), particularly by entering into the Agreement." Id. ¶¶ 35-38. Third, the complaint alleges negligence, stating that MTM owed KBI a duty of care, breached that duty, and thereby caused injury to KBI. Id. ¶¶ 41-43. Finally, the complaint alleges unjust enrichment, stating that KBI "provided labor and services on behalf of MTM" and MTM "failed to pay KBI in full for the labor and services provided" despite accepting them. Id. ¶¶ 46-50.

II. LEGAL STANDARD

A. Applicable Law

As a threshold matter, the Court notes that this action invokes this Court's diversity jurisdiction. Under the doctrine of Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and its progeny, "federal courts sitting in diversity apply state substantive law and federal procedural law." Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996); see also Novak v. Capital Mgmt. & Dev. Corp., 452 F.3d 902, 907 (D.C. Cir. 2006) (holding that for purposes of applying the Erie doctrine, D.C. law qualifies as state law (citing Lee v. Flintkote Co., 593 F.2d 1275, 1279 n.14 (D.C. Cir. 1979))). But "[c]lassification of a law as 'substantive' or 'procedural' for Erie purposes is sometimes a challenging endeavor." Gasperini, 518 U.S. at 427. In this case, the Federal Rules of Civil Procedure govern the standard for dismissal and D.C. law determines the elements of each claim. Id. at 427 n.7 ("Concerning matters covered by the Federal Rules of Civil Procedure, the characterization question is usually unproblematic: It is settled that if the Rule in point is consonant with the Rules Enabling Act, 28 U.S.C. § 2072, and the Constitution, the Federal Rule applies regardless of contrary state law." (citations omitted)); Novak, 452 F.3d at 907 (holding that in "a diversity case, the substantive tort law of the District of Columbia controls" (quoting Smith v. Wash. Sheraton Corp., 135 F.3d 779, 782 (D.C. Cir. 1998)) (internal quotation marks omitted)). But application of the Federal Rules in diversity cases is not always straightforward. See Gasperini, 518 U.S. at 427 n.7 (noting that "[f]ederal courts have interpreted the Federal Rules... with sensitivity to important state interests and regulatory policies" and citing cases in which federal courts have applied state law where it does not conflict with a related Federal Rule).

B. Rule 12(b)(6) Dismissal

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court may dismiss a complaint, or any portion of it, for failure to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8 requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The United States Supreme Court has explained that "the pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal, - U.S. -, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (internal citation omitted). A court considering a motion to dismiss pursuant to Rule 12(b)(6) must assume that all factual allegations in the complaint are true, even if they are doubtful. Twombly, 550 U.S. at 555.

III. ANALYSIS

MTM has filed a motion seeking dismissal of KBI's claims of fraudulent misrepresentation, negligence, and unjust enrichment as ...


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