United States District Court, District of Columbia
GLADYS KESSLER, District Judge.
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].
The Motions shall be granted in part and denied in part for the following reasons.
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. 359]. 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 of the claims alleged in the original Complaint (Counts 1-14) 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]. On January 30, 2014, 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.
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, 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. 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.
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, 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 officers 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 ...