Sabre International Security v. Torres Advanced Enterprise Solutions, LLC
2014 U.S. Dist. LEXIS 11204
D.C. Cir.2014Background
- Sabre and TAES partnered on TWISS MATOCs to provide security services in Iraq; Sabre held the TWISS I MATOC and TAES acted as subcontractor under Sabre.
- Due to security-clearance and Iraqi PSC licensing constraints, the parties novated and repartnered: TAES became prime contractor and Sabre subcontractor under an Asset Purchase Agreement and novation in 2009.
- A separate Teaming Agreement governed TWISS II work, requiring exclusive teaming, mutual approval of proposals, and prompt payment to Sabre within 15 days after government payment.
- Sabre alleges TAES breached the Teaming Agreement and related contracts by cutting Sabre’s prices, bidding without Sabre’s consent, late payments, and misappropriation of Sabre assets and licenses.
- Sabre also asserts TAES breached the APA by undercompensating Sabre for TWISS I work and later ceased honoring the Teaming Agreement to compete directly with Sabre; TAES moves to dismiss Counts 15-18 and 20-22 of the FAC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Count 15 states a fraud claim independent of contract | Sabre contends fraud in inducement to Sabre’s performance. | TAES argues Count 15 is a contract-based fraud claim barred by Choharis. | Count 15 dismissed as contract-based fraud. |
| Whether Count 16 states a valid fraud claim based on reliance | Sabre argues TAES’s false government communications affected Sabre. | TAES argues there was no justifiable reliance by Sabre. | Count 16 dismissed for lack of justifiable reliance. |
| Whether Count 18 includes a valid claim for conversion | Sabre alleges conversion of equipment and of Sabre’s PSC license. | TAES contends no conversion ofSabre’s PSC license; conversion of equipment disputed. | Count 18 dismissed as to conversion of PSC license; preserved for equipment conversion. |
| Whether Count 21 duplicatively Realleges breach of contract | Count 21 dismissed as duplicative of Count 3. | ||
| Whether Count 22 fraud claim based on litigation conduct is viable | Sabre asserts TAES’s litigation misconduct caused damages. | Count 22 dismissed; no independent tort for bad-faith litigation recognized. |
Key Cases Cited
- Choharis v. State Farm and Casualty Co., 961 A.2d 1080 (D.C. 2008) (independent tort requires separable facts and a duty arising outside contract)
- Twombly, Bell Atlantic Corp. v., 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading)
- Iqbal, Ashcroft v., 556 U.S. 662 (U.S. 2009) (pleading must include more than bare assertions of legal conclusions)
- In re U.S. Office Prods. Co. Sec. Litig., 251 F. Supp. 2d 77 (D.D.C. 2003) (guide to fraud pleading standards in the District of Columbia)
- Bragdon v. 2512 Assocs. Ltd. P’ship, 856 A.2d 1165 (D.C. 2004) (contractual breach cannot serve as basis for fraud claim)
- Hanley-Wood LLC v. Hanley Wood LLC, 783 F. Supp. 2d 147 (D.D.C. 2011) (unfair competition requires demonstrated injury)
- Pac. Grp. v. First State Ins. Co., 70 F.3d 524 (9th Cir. 1995) (unfair competition requires a competitive injury)
- Cresswell v. Sullivan & Cromwell, 922 F.2d 60 (2d Cir. 1990) (justifiable reliance essential element for fraud)