Hi-Tech Elec., Inc. of Del. v. T&B Constr., CIVIL ACTION NO. 15-3034 SECTION "R" (4)
| Decision Date | 15 February 2017 |
| Docket Number | CIVIL ACTION NO. 15-3034 SECTION "R" (4) |
| Parties | HI-TECH ELECTRIC, INC. OF DELAWARE v. T&B CONSTRUCTION AND ELECTRICAL SERVICES, INC. |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is plaintiff Hi-Tech Electric, Inc. of Delaware's (HTE) motion to dismiss defendant T&B Construction and Electrical Services, Inc.'s (T&B) first, fourth, sixth, eighth, and ninth causes of action.1 For the following reasons, the Court GRANTS plaintiff's motion.
HTE is a Delaware corporation based in Houston, Texas,2 and T&B is a Louisiana corporation and a certified Service Disabled Veteran Owned Small Business.3 On or around September 30, 2009, Clark/McCarthy Healthcare Partners JV (CMHP) entered into a contract with the UnitedStates of America, by and through the Department of Veterans Affairs, to perform work for the Southeast Veterans Healthcare System Replacement Hospital in New Orleans (the VA Project).4 HTE and T&B both sought to take advantage of programs through the Small Business Administration, and decided to cooperatively perform work for the VA project.5 On or about August 24, 2011, HTE and T&B entered into a Teaming Agreement, pursuant to which HTE and T&B agreed to cooperate on proposals for the VA Project.6 The Teaming Agreement also provided that if T&B were awarded contracts for the VA Project, then T&B and HTE would negotiate in good faith for subcontracts to perform work pursuant to those contracts.7
On or about January 18, 2012, CMHP entered into a written subcontract (Pan Am Subcontract) with T&B in which T&B agreed to perform electrical work for the VA project in the Pan Am building in New Orleans (Pan Am Project).8 The Pan Am Subcontract included work to be performed by HTE, as set forth in the Teaming Agreement.9 T&B was also awarded a contract to build a parking structure for the VA Project.10 Bothcontracts established that T&B would be the Prime Subcontractor, and that T&B would use HTE as a sub-subcontractor.11
On or about May 29, 2013, the parties entered into a Memorandum of Understanding (MOU), which addressed the work to be performed by each party and the manner in which payments would be made for work done on the VA Project.12 From this date forward, the facts are disputed. HTE alleges that it properly and timely performed its work on the Pan Am Project but has not yet been paid.13 HTE further alleges that despite the VA's approval of HTE's applications for payment and CMHP's willingness to pay HTE, T&B has demanded that HTE not be paid.14 Therefore, HTE alleges that T&B breached both the Teaming Agreement and the MOU.15
T&B offers a different picture. According to T&B, HTE has failed to make good on many of the promises contained in the Teaming Agreement, and these breaches resulted in HTE's default under the Teaming Agreement.16 T&B further alleges that the MOU is unenforceable because it is contrary to public policy and illegal.17 Additionally, T&B allegesthroughout its counterclaim that HTE has violated multiple federal laws and regulations.18
On July 29, 2015, HTE filed its complaint against T&B, and brought claims for breach of both the Teaming Agreement and the MOU, as well as for violation of the Louisiana Prompt Payment Statute, La. Stat. Ann. § 9:2784.19 On November 1, 2016, T&B filed a counterclaim against HTE, asserting nine causes of action.20 Specifically, T&B alleges tortious interference with contract, malicious negligence, breach of fiduciary duty, negligent misrepresentation of material facts, breach of contract through negligent misrepresentation of material facts, breach of contract through intentional interference with contract, breach of contract, unjust enrichment, and conversion.21 Both parties seek damages, reasonable attorneys' fees, and costs.22
HTE now moves the Court to dismiss five of the nine causes of action in T&B's counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6). T&B filed a response in opposition,23 and HTE replied.24
When a defendant attacks the complaint because it fails to state a legally cognizable claim, Rule 12(b)(6) provides the appropriate challenge. To survive a Rule 12(b)(6) motion to dismiss, plaintiffs must plead enough facts "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, 547 (2007)). A claim is facially plausible when a plaintiff pleads facts that allow the court to "draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiffs. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). But the Court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.
A legally sufficient complaint must establish more than a "sheer possibility" that plaintiffs' claim is true. Id. It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Twombly, 550 U.S. at 555. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidenceof each element of the plaintiffs' claim. Lormand, 565 F.3d at 255-57. If there are insufficient factual allegations to raise a right to relief above the speculative level, Twombly, 550 U.S. at 555, or if it is apparent from the face of the complaint that there is an insuperable bar to relief, Jones v. Bock, 549 U.S. 199, 215 (2007); Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007), the claim must be dismissed.
The first cause of action in T&B's counterclaim is for tortious interference with contract. T&B alleges that after it was awarded the Pan Am Project, HTE interfered with this contract by refusing to enter into good faith negotiations with T&B, refusing to provide mentoring to T&B as promised, and refusing to comply with the Project's Small Business Subcontracting Program under federal regulations.25 In its motion to dismiss, HTE argues that under Louisiana law tortious interference with contract claims cannot be maintained against corporate entity defendants.26 To resist this conclusion, T&B argues that despite only suing HTE and none of itscorporate officers individually, it makes allegations against individual officers of HTE and therefore its tortious interference claim should survive.27
Louisiana courts and federal courts applying Louisiana law have made clear that claims for tortious or intentional interference with a contract cannot be maintained against corporate defendants. The Louisiana Supreme Court recognized a narrow cause of action of tortious interference in 9 to 5 Fashions, Inc. v. Spurney, 538 So. 2d 228 (La. 1989). Spurney recognized that an action for tortious interference with contract could be maintained against a corporate officer if a plaintiff had a contract or legally protected interest with the officer's corporation, the officer knew of the contract, and the officer intentionally and without justification caused the corporation to breach the contract and damage the plaintiff. Id. at 234. But Louisiana courts have not expanded the limited scope of Spurney to other situations, see Petrohawk Properties, L.P. v. Chesapeake Louisiana, L.P., 689 F.3d 380, 395 (5th Cir. 2012) (collecting cases), and have continued to hold that there can be no claim for tortious interference against the corporate entity itself. See, e.g., Restivo v. Hanger Prosthetics & Orthotics, Inc., 483 F. Supp. 2d 521, 536 (E.D. La. 2007) () (citing Tech.Control Sys., Inc. v. Green, 809 So. 2d 1204, 1207 (La. App. 3 Cir. 2002); Boudreaux v. OS Restaurant Services, L.L.C., 58 F. Supp. 3d 634, 638-39 (E.D. La. 2014) (). Therefore, there can be no claim of tortious interference with contract against HTE itself.
It is undisputed that T&B's counterclaim is brought solely against HTE as a corporate entity, and that no individual employee of HTE has been sued. T&B's counterclaim does make allegations against individual employees of HTE, but contains no specific allegations against them related to tortious interference with the Pan Am Subcontract. In the section of T&B's counterclaim titled "Cause of Action Number One: Hi-Tech's Tortious Interference with T&B's Prime Subcontract," there is no mention whatsoever of any individual officer of HTE, and the section is clearly focused on the actions of HTE as an entity. Further, T&B's response to this motion does not specifically identify any allegations in its counterclaim tying the actions of an officer of HTE to interference with T&B's contract with CMHP. Instead, it alleges that its counterclaim uses HTE and its individual employees interchangeably. That argument is unavailing. Thus, as T&B's tortiousinterference with contract cause of action cannot be maintained against a corporate defendant, it must be dismissed.28
T&B's fourth cause of action is for negligent misrepresentation of material facts, and "unauthorized use of T&B's contract authority and its name in commission of a felony."29 T&B alleges that HTE submitted false tax information and manipulated cost reports, affidavits, and change orders to defraud the federal government and the Louisiana Department of Revenue.30 T&B further alleges that these manipulations and misrepresentations not only violated federal laws and regulations, but also damaged T&B,...
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