Compuspa, Inc. v. Intern. Business Machines Corp., Civ.A. DKC 2002-0507.
| Decision Date | 03 September 2002 |
| Docket Number | No. Civ.A. DKC 2002-0507.,Civ.A. DKC 2002-0507. |
| Parties | COMPUSPA, INC. v. INTERNATIONAL BUSINESS MACHINES CORPORATION. |
| Court | U.S. District Court — District of Maryland |
Read K. McCaffrey, Patton Boggs, LLP, Washington, DC, for Plaintiff.
J. Hardin Marion, William C. Sammons, Tydings and Rosenberg, LLP, Baltimore, MD, for Defendant.
Presently pending and ready for resolution in this breach of contract, breach of implied covenants of good faith and fair dealing, and tortious interference with contractual relations case is the motion of Defendant International Business Machines Corporation to dismiss all counts against it pursuant to Fed.R.Civ.P. 12(b)(6). The issues have been fully briefed and no hearing is deemed necessary. Local Rule 105.6. For reasons that follow, Defendant's Motion to Dismiss will be granted in part and denied in part.
The following facts are alleged by Plaintiff CompuSpa, Inc. in its complaint. Plaintiff is a computer consulting and hardware maintenance corporation which provides computer systems engineers to other business entities. On or about March 31, 2000, Plaintiff and Defendant entered into an indefinite delivery/indefinite quantity agreement ("the Contract"), which was revised on April 10, 2000 and modified on May 3, 2000. Under the Contract, Plaintiff agreed to provide Defendant with computer systems administrators, network administrators and software engineers in support of a contract Defendant held with the Internal Revenue Service ("the IRS/Presidio Project"). The Contract required Defendant to issue Release Orders to engage Plaintiff for the provision of services.
On the same day the parties entered into the Contract, Defendant engaged Plaintiff to provide technical services for the IRS/Presidio Project by issuing Release Order # 1 ("RO # 1") pursuant to the Contract. In accordance with RO # 1, two of Plaintiff's employees began service at IRS facilities—one in Ogden, Utah and one in Covington, Kentucky—on April 3, 2000 and a third began service in Martinsburg, West Virginia on April 17, 2000. Plaintiff's employees continued to provide services pursuant to RO # 1 until at least December 31, 2000, and RO # 1 is not the basis of Plaintiff's complaint.
On May 1, 2000, Defendant again engaged Plaintiff by issuing Release Order # 2 ("RO # 2") for five technicians to work on the IRS/Presidio Project in Austin, Texas ("the Austin Project"). Pursuant to RO # 2, as modified, Plaintiff supplied five technicians who began work at the Austin IRS facility on May 1, 2000. These technicians included: Richard Sumrall, Randall Caldwell, Michael Eby, Brian Hennington, and James Dabney (collectively, "the Austin Technicians").
As required by its employment contracts with the Austin Technicians, Plaintiff issued paychecks to them on May 19, 2000 for services rendered between May 1 and May 15, 2000. On May 23, 2000, Plaintiff's bank informed it that PayChex had placed a garnishment on its account and that all monies therein were frozen. Ainsley Gill, plaintiff's President and CEO immediately informed Defendant of the temporary cash flow problem and requested that Defendant immediately pay its outstanding invoices owed to Plaintiff, which exceeded $70,000. Defendant, however, did not respond to Mr. Gill's request.
On May 24, 2000, Mr. Gill contacted the five Austin Technicians to advise them of the temporary cash flow problem. To Plaintiff's knowledge as of that date, all five of the Austin Technicians intended to fulfill their contracts with Plaintiff on the Austin Project. The next day, however, several of Plaintiff's competitors, including Cardinal Systems Group, Icon Consulting, Inc. and VICCS, contacted the Austin Technicians and other CompuSpa employees and informed them that Plaintiff was ceasing business. The competitors also told the Austin Technicians that Defendant wanted them to go to work for one of the competitors so the Austin Technicians could continue to work on the IRS/Presidio Project without interruption.
According to Plaintiff, Defendant's employees Charmaine Powers and Fred Williams had provided Plaintiff's competitors with the Austin Technicians' names and contact information, with the intent that the competitors hire the Austin Technicians away from Plaintiff. Defendant also communicated to the competitors that Defendant was ceasing to do business with Plaintiff, despite the fact that RO # 2 was in full force and effective through at least July 31, 2000. Plaintiff alleges that on or about May 26, 2000, Ms. Powers also falsely told the Austin Technicians that the State of Maryland had seized all of Plaintiff's assets and that Plaintiff had no chance of recovery. Plaintiff alleges that Ms. Powers communicated these falsehoods with the intent to induce Plaintiff's employees to leave their employment with Plaintiff in violation of their contracts.
On May 26, 2000, Plaintiff made arrangements with its "teaming partner," Churchill and Harriman, to pay the Austin Technicians' paychecks. As a result, the Austin Technicians were paid on May 26, 2000, one week after the initial set of paychecks from the frozen account had been issued. Nevertheless, on June 1, 2000, Randy Caldwell, one of the Austin Technicians, submitted his resignation to Plaintiff without the thirty-day notice required by his employment contract. The next day, June 2, 2000, Defendant notified Plaintiff that it was immediately terminating RO # 2 for cause, citing the following reasons for the termination: (a) Plaintiff's failure to notify Defendant of Randy Caldwell's resignation and the resulting lack of a full complement of employees on site; (b) Plaintiff's attempt to assign all or part of the subcontract to Churchill and Harriman without Defendant's consent; and (c) the Austin Technicians' distress over not being paid by Plaintiff.
By June 3, 2000, all five of the Austin Technicians had left Plaintiff's employ and began working for Cardinal, which ultimately received the contract to service the Austin Project after Defendant terminated RO # 2. Plaintiff alleges that Defendant's false and malicious statements regarding Plaintiff's solvency provided the catalyst for the Austin Technicians' departure. Plaintiff further alleges that Cardinal was able to offer the Austin Technicians more attractive compensation packages than Plaintiff could because Defendant allowed Cardinal to charge a higher billable rate than it allowed Plaintiff to charge.
Plaintiff brings a three count complaint alleging breach of contract, breach of the implied covenants of good faith and fair dealing, and tortious interference with contractual relations. Plaintiff claims to have suffered damages, lost profits, consequential damages, and harm to its reputation as a result of Defendant's alleged actions. In addition, Plaintiff seeks punitive damages in the amount of $1 million and attorney's fees. In response, Defendant moves to dismiss all counts for failure to state a claim upon which relief can be granted. Defendant also seeks to have Plaintiff's claims for lost profits, consequential damages, and punitive damages stricken because of a contractual provision limiting liability and Plaintiff's alleged failure to demonstrate that Defendant acted with the malice required for an award of punitive damages.
A motion to dismiss pursuant to Fed. R.Civ.P. 12(b)(6) ought not be granted unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). All that the Federal Rules of Civil Procedure require of a complaint is that it contain "`a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id. at 47, 78 S.Ct. 99; Comet Enters. Ltd. v. Air-A-Plane Corp., 128 F.3d 855, 860 (4th Cir.1997). "Given the Federal Rules' simplified standard for pleading, `[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Swierkiewicz v Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 998, 152 L.Ed.2d 1 (2002), quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).
In reviewing the complaint, the court accepts all well-pled allegations of the complaint as true and construes the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff. Ibarra v. United States, 120 F.3d 472, 473 (4th Cir.1997). The court must disregard the contrary allegations of the opposing party. A.S. Abell Co. v. Chell, 412 F.2d 712, 715 (4th Cir.1969). The court need not, however, accept unsupported legal conclusions, Revene v. Charles County Comm'rs, 882 F.2d 870, 873 (4th Cir.1989), legal conclusions couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.1979).
The parties agree that Counts I and II are governed by the broad forum selection clause in the Contract, ¶ 15.3, which states that "any dispute arising under or relating to this Agreement and/or performance thereunder will be governed by the laws of the State of New York." Accordingly, Counts I and II, including the damages issues regarding these counts, will be decided under New York law.
It is less clear, however, which state's law applies to Count III, which alleges tortious interference with contractual relations. Generally, Maryland adheres to the choice of law rule of lex loci delecti, or place of harm, to determine the applicable law in tort actions. See ...
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