Blackstone Consulting Inc v. R&R Food Services LLC
5:17-cv-01118
W.D. Okla.
Dec 21, 2017

Background

  • BCI (Blackstone Consulting, Inc.) sued R&R Food Services, LLC and Robert Brown in state court for breach of contract and sought accounting, declaratory and injunctive relief; defendants removed to federal court and asserted counterclaims.
  • R&R (a Randolph‑Sheppard operator at Fort Sill) engaged BCI as a subcontractor/teaming partner in 2013; they amended their contract in 2016 after the Army issued a Cure Notice.
  • Defendants allege BCI began ‘‘sweeping’’ funds from R&R’s Bank Leumi operating account in Feb 2017, transferring payments to BCI, and later sought direct payments from ODRS; ODRS froze June–July 2017 payments (~$3.9M) and placed funds in escrow.
  • Defendants assert counterclaims for breach of contract (not challenged here), fraudulent misrepresentation, conversion, tortious interference with contractual relations, tortious interference with prospective economic advantage, unjust enrichment, and breach of the covenant of good faith and fair dealing.
  • BCI moved to dismiss counterclaims (2)–(7) under Fed. R. Civ. P. 12(b)(6); the court applied Twombly/Iqbal plausibility standards and Rule 9(b) for fraud particularity.
  • The court denied dismissal of all challenged counterclaims except that it dismissed any tort‑based claim for breach of the covenant of good faith and fair dealing (holding such claims require a ‘‘special relationship’’ not pleaded here).

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Fraudulent inducement BCI argues the inducement theory fails because the alleged autonomy promise was omitted from the amended contract and fraud allegations lack Rule 9(b) particularity Defendants say BCI promised to help them become independent and then acted contrary to that promise (identified acts and timing in contracts) Court: Denied dismissal — allegations sufficiently identify who, what, when, where, and acts to survive Rule 9(b) challenge
Conversion (wrongful taking of funds) BCI contends money is not subject to conversion under Oklahoma law and claim should be dismissed Defendants assert a narrow Oklahoma exception applies where banks or third parties wrongfully refuse to release funds or where a chose in action exists Court: Denied dismissal — premature to decide whether Oklahoma exception applies; pleadings suffice to proceed
Tortious interference with contractual relations BCI contends interference claim is inadequately pleaded or unjustified Defendants allege BCI contacted ODRS and diverted/attempted to divert payments, causing R&R to lose contract payments Court: Denied dismissal — allegations that BCI contacted ODRS and diverted funds are sufficient to state the claim
Tortious interference with prospective economic advantage BCI argues speculative lack of specifics on future contracts Defendants allege diversion of funds impaired R&R’s line of credit required to obtain future ODRS contracts Court: Denied dismissal — ongoing multi‑year relationship and alleged loss of credit support a plausible expectancy claim
Unjust enrichment BCI argues contract remedies displace unjust enrichment Defendants plead unjust enrichment as alternative remedy Court: Denied dismissal — premature to disallow equitable claim given Rule 8(e)(2) permits alternative, inconsistent claims
Breach of covenant of good faith and fair dealing (tort) BCI argues bad faith tort claims are limited to insurance or special relationships Defendants claim a ‘‘special relationship’’ based on Brown’s blindness and unequal bargaining power Court: Granted dismissal of any tort‑based good faith claim — no pleaded special relationship; remaining contract‑based remedy survives

Key Cases Cited

  • Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for federal pleading)
  • Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim)
  • S.E.C. v. Shields, 744 F.3d 633 (10th Cir.) (accept well‑pleaded allegations on 12(b)(6))
  • United States ex rel. Sikkenga v. Regence BlueCross BlueShield of Utah, 472 F.3d 702 (10th Cir.) (Rule 9(b) fraud particularity requirements)
  • Bowman v. Presley, 212 P.3d 1210 (Okla.) (elements of fraud under Oklahoma law)
  • Am. Biomedical Grp., Inc. v. Techtrol, Inc., 374 P.3d 820 (Okla.) (conversion does not include intangible property)
  • Beshara v. Southern Nat. Bank, 928 P.2d 280 (Okla.) (Oklahoma authority discussing wrongful taking of money/chose in action)
  • Tuffy's Inc. v. City of Oklahoma City, 212 P.3d 1158 (Okla.) (elements of tortious interference with contractual relations)
  • Christian v. American Home Assurance Co., 577 P.2d 899 (Okla.) (every contract includes implied covenant of good faith and fair dealing)
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