United States District Court, District of Columbia
BERMAN JACKSON, United States District Judge
TK Services, Inc. ("TKS") has brought this breach
of contract action against defendant RWD Consulting, LLC
("RWD"). TKS alleges that RWD wrongfully breached
an agreement between the parties by excluding it from working
on a government contract, and that RWD converted TKS's
property by unlawfully removing contract funds belonging to
TKS from a jointly controlled bank account. Compl. [Dkt. #1].
After the complaint was filed, TKS filed a motion for a
preliminary injunction. Pl.'sMot. for Prelim. Inj. [Dkt.
#2] ("PI Mot."); Mem. of P. & A. in Supp. of
Mot. [Dkt. # 2] ("PI Mem."). Defendant opposed the
motion, Mem. of P. & A. in Opp. to PI Mot. [Dkt. #10]
("PI Opp."), and it also filed a motion to dismiss
and to compel arbitration. Def's Mot. to Dismiss Pl's
Compl. & Compel Arb. [Dkt. # 8] ("Def's
Mot."). Plaintiff filed a reply in support of its motion
for a preliminary injunction, and an opposition to the motion
to dismiss and to compel arbitration. Pl's Reply Br. in
Supp. of PIMot. [Dkt. # 12] ("Pl's Reply");
Mem. of P. & A. in Resp. to Def's Mot. [Dkt. # 13]
("Pl's Opp"). For the reasons set forth below,
the Court concludes that the arbitration agreement is
enforceable, that TKS must arbitrate its claims against RWD,
and that TKS is not entitled to an injunction in aid of the
arbitration. Therefore, it will grant defendant's motions
to dismiss and compel arbitration, and it will deny the
motion for a preliminary injunction as moot.
a Virginia corporation; its business is government
contracting, and it specializes in providing engineering,
maintenance, and operational services for government
facilities managed by the General Services Administration.
Compl.¶7. In early 2016, TKS began to discuss a proposal
with RWD, a Virginia company owned and managed by Robert W.
Dozier, Jr., to provide operations and maintenance services
for the EPA headquarters located at 1201 Constitution Avenue
N.W. in Washington. Id. ¶ 9. TKS was aware of
the opportunity because it was the incumbent subcontractor at
the time, working as a subcontractor to Chimes DC.
February 23, 2016, in anticipation of RWD's receiving a
subcontract from Chimes, TKS and RWD entered into a Mentor
Subcontractor's Service Agreement. Compl. ¶ 11;
Decl. of Robert Dozier, Jr. [Dkt. # 10-1] ("Dozier
Decl.") ¶ 7; Ex. A to Compl. [Dkt. # 1]
("Mentor Agreement"). On July 1, 2016, Chimes
awarded a subcontract to RWD, which the parties refer to as
the "Chimes Contract." Compl. ¶ 12; Dozier
Decl. ¶ 9. Under the Chimes Contract, RWD became the
prime subcontractor responsible for providing operation and
maintenance-related services for the EPA building.
Compl.¶12; Dozier Decl.¶9. TKS and RWD then agreed
that any work performed under the Chimes Contract would be
performed in accordance with the Mentor Agreement.
Compl.¶12; Dozier Decl.¶9.
the Mentor Agreement, TKS was responsible for managing the
work required by the Chimes Contract. Compl.¶16; Dozier
Decl. ¶ 15; Mentor Agreement at 8. TKS would receive all
of the profits under the Chimes Contract, but it was required
to pay RWD a fee of $5, 000 per month. Compl. ¶ 16;
Dozier Decl. ¶ 21; Mentor Agreement at 9.
Mentor Agreement required that all funds received under the
Chimes Contract were to be deposited into a joint bank
account to which both TKS and RWD were signatories. Compl.
¶ 17; Dozier Decl.¶10; Mentor Agreement at 9. Money
could only be withdrawn from the joint account under the
terms provided for in the Mentor Agreement. Compl.¶17;
Mentor Agreement at 9-10. TKS alleges that it was entitled to
a payment of $275, 051.47 for the profits attributable to the
Chimes Contract, but that it was only paid $210, 000.
Id. ¶ 20.
contract also provided that TKS was required to provide
"working capital" for the work to be done on the
Chimes Contract, and the agreement prohibited RWD from
withdrawing any portion of those funds. Mentor Agreement at
8. TKS alleges that it contributed over $140, 000 in working
capital to the joint account. Compl.¶18.
Mentor Agreement also governed the distribution of profits
arising from "reimbursable projects" that were
separate from the Chimes Contract. Mentor Agreement at 9.
Fifty-one percent of those profits were to be distributed to
RWD, and forty-nine percent of the profits were to be
distributed to TKS. Id. TKS alleges that it is
entitled to its share of those profits for the period between
July 1, 2016 andMarch24, 2017, which it calculates to be $38,
121.13. Compl. ¶ 22. The complaint states that TKS has
not been paid its share of the profits for the reimbursable
also alleges that it supplied equipment valued in excess of
$22, 500 that was to be used to fulfill the parties'
obligations under the Chimes Contract. Compl.¶23.
to TKS, on March 23, 2017, without prior warning or notice,
RWD withdrew all of the funds from thejoint account- atotal
of approximately $35, 000 - and itterminated TKS's online
access to the joint bank account. Compl.¶24. TKS alleges
that RWD took actions to exclude TKS from accessing the EPA
building, and that RWD took steps to unilaterally terminate
the Mentor Agreement. Id. ¶ 25. Based on these
facts, TKS sued for breach of contract on June 13, 2017, and
it states that - in addition to the value of its equipment -
it is entitled to a minimum of $34, 000 per month of profit
for the months of March and April 2017, and that it continues
to be damaged in that amount for each month that it is
excluded from the EPA building. Id. ¶¶
of the complaint alleges that RWD breached the Mentor
Agreement by unilaterally terminating it, and by not properly
compensating TKS. Compl. ¶¶ 32-39. In Count II, TKS
alleges that RWD is liable for conversion of funds that
rightfully belong to TKS. Id. ¶¶ 40-51.
Count III alleges that RWD has been unjustly enriched by its
improper conduct. Id. ¶¶ 52-59. And Count
IV requests equitable and injunctive relief, including an
accounting, an award of pre-judgment attachment of funds, and
an injunction that requires the profits from the Chimes
Contract to be sequestered, prevents RWD from excluding TKS
from the EPA building and from the joint bank account, and
reinstates TKS to its prior role under the Mentor Agreement.
Id. ¶¶ 60-66. Pursuant to Federal Rule of
Civil Procedure 62, TKS filed a motion for a preliminary
injunction based on the same factual allegations. PI Mot.
complaint and motion for preliminary injunction are premised
upon the Mentor Agreement, but the contract contains an
Any controversy or claim between the PARTIES arising out of
or in connection with this Agreement, including any claim
concerning an alleged breach hereof, shall be subject to
final settlement by arbitration. Notice of demand by any
PARTY for arbitration of any matter must be given to the
other PARTIES within one (1) year from the date on which the
controversy occurred or the claim arose.
The arbitration shall be conducted by a single arbitrator in
accordance with the Rules of Arbitration of the American
Arbitration Association, as then in effect. If and to the
extent that it is necessary or appropriate to refer to and
apply the law of a particular jurisdiction in reaching a
decision on any matter submitted to arbitration under this
clause, the arbitrator shall be ...