DISH Purchasing Corp. v. Suncraft Techs.
| Decision Date | 07 February 2023 |
| Docket Number | Civil Action 22-cv-00127-CMA-KLM |
| Parties | DISH PURCHASING CORPORATION, Plaintiff, v. SUNCRAFT TECHNOLOGIES, INC., Defendant. |
| Court | U.S. District Court — District of Colorado |
ORDER GRANTING MOTION TO DISMISS RULE 20(a)(2) CLAIMS
This matter is before the Court on joined Defendant DISH Network LLC's Motion to Dismiss Rule 20(a)(2) Claims (“Motion to Dismiss”). (Doc. # 62.) For the following reasons, the Court grants the Motion to Dismiss.
The following well-pleaded facts are taken from Defendant/Counter Claimant Suncraft Technologies, Inc.'s (“Suncraft”) Counter Complaint and Rule 20(a)(2) Claims (Doc. # 41) and are assumed to be true for purposes of reviewing the Motion to Dismiss. See Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007).
Suncraft is a company that was in the business of commercial printing before it ceased business operations in August 2021. (Doc. # 41 at 14.) The dispute in this case arises from two contracts that Suncraft entered into with Plaintiff/Counter Defendant DISH Purchasing Corporation (“DISH Purchasing”) in early 2021. (Id. at 16.) According to Suncraft, DISH Purchasing has no employees or customers and acts as a purchasing agent for affiliates of DISH Network Corporation, the parent company of various entities operating under the “DISH” umbrella. (Id. at 15.) Suncraft alleges that DISH Network, LLC (“DISH Network”), the Rule 20(a)(2) Defendant and Movant, is an affiliate of DISH Network Corporation. (Id.)
In early 2021, LogicSource, a procurement company, contacted Suncraft about an opportunity for Suncraft to provide direct mailers on behalf of DISH Network. (Id.) Suncraft alleges that LogicSource acted as an agent of DISH Purchasing during these communications. (Id. at 16.) LogicSource and Suncraft reached an agreement, subject to the approval of DISH Purchasing, on the pricing of certain direct mailers that Suncraft would print and mail for the purpose of advertising the services and products of DISH Network. (Id.) On March 10, 2021, DISH Purchasing sent Purchase Order # 596414 (“First Purchase Order”) to Suncraft ordering production and mailing of certain mailers for a direct mail campaign (“Cycles 5 and 6”). (Id.) On April 23, 2021, DISH Purchasing sent Purchase Order # 6006605 (“Second Purchase Order”) to Suncraft ordering production and mailing of certain direct mailers for another direct mail campaign (“Cycles 7 and 8”). (Id. at 17.)
Both Purchase Orders incorporated by reference DISH Purchasing's Purchase Order Terms and Conditions (“Terms and Conditions”) effective October 1, 2020. (Doc. # 41-1 at 2, 8.) The Terms and Conditions include the following preamble:
The supplier named in the Purchase Order (“Supplier”) and DISH Purchasing Corporation (“DISH”) agree to be bound by all terms and conditions contained in these Purchase Order Terms and Conditions (these “Terms and Conditions”), all of which are a part of each purchase order issued to Supplier by DISH (the “Purchase Order,” and together with these Terms and Conditions, this “Agreement”). DISH and Supplier may be referred to in this Agreement individually as a “Party” and, together, as the “Parties.” “Affiliate” means, with respect to a Party, any person or entity directly or indirectly controlling, controlled by, or under common control with such Party; provided, however, that for the purposes of this definition, none of EchoStar Corporation nor any of its direct or indirect wholly owned subsidiaries shall be deemed to be under common control with DISH.
(Doc. # 49-1 at 3.)[1]Paragraph 21 of the Terms and Conditions, titled “Purchase for Resale,” states as follows:
Supplier acknowledges and agrees that: (a) the Products purchased by DISH are for resale to one or more of DISH's Affiliate(s); . . . and (c) all terms and conditions of the Purchase Order will be fully enforceable by the Affiliate(s) to which DISH reallocates the Products as if such entity were a party to these Agreement. Promptly following Supplier's written request, DISH shall provide Supplier resale certificates with respect to the resale of the Products.
(Id. at 8.) Suncraft alleges that DISH Purchasing was acting as the purchasing agent for affiliate DISH Network, whose services and products were the subject of the direct mailers for Cycles 5 and 6 and Cycles 7 and 8. (Doc. # 41 at 16-17.)
In April and May 2021, Suncraft printed and mailed approximately 1.2 million direct mailers pursuant to the First Purchase Order for Cycles 5 and 6. (Id. at 16.) On June 14, 2021, and July 7, 2021, Suncraft issued invoices to DISH Purchasing for the mailers for Cycles 5 and 6. (Id.; Doc. # 41-1 at 4, 6.) Subsequently, Suncraft produced and mailed approximately 11 million direct mailers for Cycle 7. (Doc. # 41 at 17.)
Suncraft alleges that after it produced and mailed direct mailers for Cycle 7, DISH Purchasing terminated the Second Purchase Order for Cycles 7 and 8. (Id.) On August 5, 2021, Suncraft issued DISH Purchasing an invoice for the direct mailers printed and mailed by Suncraft for Cycle 7. (Id.) Suncraft asserts that DISH Purchasing did not pay, and has never paid, the June 4, 2021 and July 7, 2021 invoices for Cycles 5 and 6 or the August 5, 2021 invoice for Cycle 7. (Id. at 16-17.) Suncraft further alleges that DISH Network has accepted the benefits of the direct mailers produced and mailed by Suncraft pursuant to Cycles 5, 6, and 7, but Suncraft has not been paid any amounts due for the direct mailers. (Id. at 17.) Suncraft contends that it is owed $1,350,926.81 for the mailers it produced pursuant to the Purchase Orders. (Id.)
Plaintiff/Counter Defendant DISH Purchasing initiated this lawsuit against Suncraft on January 18, 2022. (Doc. # 1.) In its Amended Complaint, DISH Purchasing asserts a single claim against Suncraft for breach of contract. (Doc. # 49 at 6-7.) On September 2, 2022, Suncraft filed its Answer, Affirmative Defenses, Counterclaim against DISH Purchasing, and Claims in Joinder against DISH Network pursuant to Fed.R.Civ.P. 20(a)(2). (Doc. # 41.) Suncraft asserts two claims against DISH Network: (1) breach of contract and (2) unjust enrichment. (Id.)
DISH Network filed the instant Motion to Dismiss Suncraft's Rule 20(a)(2) claims on October 17, 2022. (Doc. # 62.) Suncraft filed its Response (Doc. # 69), and DISH Network followed with its Reply (Doc. # 78). The matter is now ripe for review.
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (internal quotation marks omitted).
“A court reviewing the sufficiency of a complaint presumes all of [a] plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir. 1991). “To survive a motion to dismiss, a 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 Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. However, the Court need not accept conclusory allegations without supporting factual averments. Southern Disposal, Inc. v. Tex. Waste Mgmt., 161 F.3d 1259, 1262 (10th Cir. 1998). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “Nor does the complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Id. (internal quotation marks and brackets omitted).
DISH Network moves to dismiss Suncraft's breach of contract claim on the basis that Suncraft has failed to allege that DISH Network was a party to any contract with Suncraft. DISH Network further moves to dismiss Suncraft's unjust enrichment claim on the grounds that the claim is precluded by the existence of an express contract between Suncraft and DISH Purchasing. The Court will address each of Suncraft's Rule 20(a)(2) claims in turn.
In Colorado, a party attempting to recover on a claim for breach of contract must adequately allege facts sufficient to show: (1) the existence of a contract; (2) performance by the plaintiff or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff. W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992). DISH Network contends that Suncraft has not plausibly alleged the first element, the existence of a contract, because it is undisputed that DISH Network was not a party to either Purchase Agreement. (Doc.# 62 at 4-5.) Moreover, DISH Network argues that Suncraft has not adequately alleged facts sufficient to demonstrate that DISH Network may be held liable as DISH Purchasing's principal or as a third-party beneficiary to the Purchase Orders.
“An agency relationship ‘results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.'” Villalpando v. Denver Health &...
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