SABRE INTERNATIONAL SECURITY v. TORRES ADVANCED ENTERPRISE SOLUTIONS, LLC

Filing 288

MEMORANDUM OPINION to the Order granting in part and denying in part Defendant's Motion to Dismiss. Signed by Judge Gladys Kessler on 1/30/14. (CL, )

UNITED STATES DISTRICT COURT
. FOR THE DISTRICT OF COLUMBIA

SABRE INTERNATIONAL SECURITY,
Plaintiff,
v.

Civil Action No. 11-806 (GK)

TORRES ADVANCED ENTERPRISE
SOLUTIONS, LLC, et al.,
Defendants.

MEMORANDUM OPINION

Sabre

International

Security

("Sabre")

against its former business partner,
Solutions,
officers,

LLC
for

( "TAES")
breach

of

and

this

case

Torres Advanced Enterprise

several

contract,

brings

current

tortious

and

former

TAES

interference

with

prospective economic advantage, fraud, and related torts.
This matter is before the Court on TAES's Motion to Dismiss
Counts 15-18 and 20-22 of the First Amended Complaint
253] .

262],

Upon consideration of
and Reply _[Dkt.

No.

the Motion,

269],

Opposition

[Dkt. No.
[Dkt.

No.

and the entire record herein,

and for the reasons set forth below, the Motion to Dismiss shall
be granted in part and denied in part.

BACKGROUND

I .

Factual Background1

A.
Sabre

is

an

Iraqi

limited

liability

principal place of business in Baghdad,

Iraq.

liability company organized under

laws

company

companies

provide

security

the

services

with

its

TAES is a limited
of Virginia.

internationally

to

Both
private

and governmental entities.
Between approximately 2007 and 2010,

Sabre and TAES worked

together to perform security contracts at United States military
installations
Award
States

Task

Iraq.

Order

MATOC,

successor,

They

did

Contracts

Government:

("TWISS")
its

in

the

so pursuant

("MATOCs")

Theater-Wide

TWISS

MATOC

number

issued

Internal

number W91GDW-07-D-4026

to

two Multiple

by

the

United

Security Services

("TWISS I

MATOC"),

W91DGW-09-D-4030

and

("TWISS

II

MATOC").
Sabre was awarded the TWISS I MATOC on September 27,
and

thereby

became

"task orders,"

November

agreement
1

to

compete

for

specific

which covered specific projects put out

by the Government.
on

eligible

8,

with

2007,

TWISS

I

for bid

To aid it in competing for such task orders,
2007,

TAES,

Sabre
under

entered
which

into

TAES

a

agreed

subcontractor
to

provide

The facts set forth herein are taken from the First Amended
Complaint ( "FAC") [Dkt. No. 242] and the undisputed facts set
forth in the parties' briefs.
-2-

personnel

holding

valid

United

States

Government

security

clearances to work on task orders awarded to Sabre under the
TWISS

I

several

MATOC.
TWISS

The Sctbre-TAES team bid for and was
I

Task

Orders,

which

it

performed

awarded

with

Sabre

acting as prime contractor and TAES acting as subcontractor.
In 2009,
that

prime

contractors,

Department
Clearance

the United States amended its policies to require

Industrial
("FCL").

like

Sabre,

Security
Sabre,

eligible to obtain an FCL.

as

possess

Program
a

a

valid

Security

Facility

foreign

Defense

company,

was

not

Conversely, TAES was not eligible to

perform TWISS I work without Sabre, because only Sabre, and not
TAES,

possessed

a

Private

Security

Company

("PSC")

license

issued by the Ministry of the Interior of the Republic of Iraq,
which was required to perform private security services in Iraq.
Consequently, on December 30, 2009,
Asset

Purchase

subcontractor

Agreement
agreement

the parties entered into an
and

by

which

novation

of

their

TAES

( "APA")

became

the

prime

contractor and Sabre became the subcontractor for TWISS I work.
This modification allowed the Team to avoid termination of the
TWISS I MATOC.
Under .the

APA,

TAES

became

responsible

for

submitting

invoices to the Government and for compensating Sabre once it
received payment from the Government.
-3-

The APA also included a

form

lease

TAES

equipment

otherwise
TWISS

I

agreement,

pursuant

necessary

adopted

the

to

to

perform

parties'

subcontractor

which

TWISS

would

I

lease

to

work.

The

APA

obligations

original

agreement,

Sabre

under

the

including

its

compensation

scheme.
On August 6,

2009,

Sabre and TAES entered into a

separate

Teaming Agreement to govern work under the TWISS II MATOC.
with the APA,

As

the Teaming Agreement designated TAES as the prime

contractor and

Sabre

alia,

Sabre and TAES compete exclusively as a team for

that:

any TWISS

(1)
II

as

proposal

the

subcontractor.

submitted;

such proposal;

( 3)

within Sabre's

Scope of Work,

(4)
with

TAES manage
respect

to

(2)

It

required,

both parties

TAES offer Sabre any TWISS

the

team's

the

as

II

inter

approve

any

work awarded

defined under the Agreement;

affairs

and protect

Government;

and

(5)

Sabre's

TAES

pay

rights
Sabre's

invoices within 15 working days after receiving payment from the
Government.
Sabre alleges that TAES breached the Teaming Agreement, and
committed

fraud

and various

other

torts,

unilaterally reducing Sabre's prices

by,

in TWISS

inter

alia,

(1)

II proposals and

refusing to pay Sabre in accordance with previously agreed-upon
pricing

schemes;

Sabre's

consent

(2)
or

bidding
knowledge,

on

TWISS

and
-4-

II

task

thereafter

orders

without

performing

such

work without
payment
leased
more

of

Sabre's participation;
Sabre's

equipment

third

to

TWISS
Sabre

parties;

rights

in

relation

Sabre

also

alleges

fully

compensate

II

and
to

Sabre

failing

invoices;

and,
( 5)

failing

TAES
for

( 4)

instead,

certain

that

(3)

to

return

it

protect

Sabre's

disputes

work

failing

selling

to

breached

to make timely

with
the

the

APA

performed

to

or

legal

Government.

by

on

one

failing

TWISS

I

to

task

orders.

Sabre further alleges that TAES made a secret internal

decision

in

Agreement

the

and

spring of
the

APA

2010
and

to

cease

instead

honoring

enter

to

the

Teaming

into

direct

competition with Sabre.

B.

Procedural Background

Sabre filed its original Complaint on April 29,
July 5,

2013,

approximately three and a

close of fact discovery,

half months

2011.

On

after the

Sabre moved to amend its Complaint to

add claims of fraud against TAES and several of its officers in
light

of

information

obtained

during

granted Sabre's Motion to Amend on October 3,
filed its FAC on October 10, 2013
On

November

14,

2013,

TAES

Dismiss Counts 15-18 and 2 0-22
December 6,

The

discovery.
2013,

and Sabre

[Dkt. No. 242]
filed

the

of the FAC

2013, Sabre filed its Opposition

instant

Motion

to

2 53] .

On

[Dkt. No. 262].

On

[Dkt.

No.

December 20, 2013, TAES filed its Reply [Dkt. No. 269].
-5-

Court

II.

STANDARD OF REVIEW

To

survive

plaintiff

need

a

motion

to

Bell

Atlantic

Corp.

v.

line

from

Twombly,

state

a

[his or

the

to

12(b) (6),

relief that is plausible on its face" and to "nudge [
across

facts

Rule

claim to

claims

"enough

under

a

her]

only plead

dismips

conceivable
550

U.S.

"[O]nce a claim has been stated adequately,

to

544,

plausible."
570

(2007).

it may be supported

by showing any set of facts consistent with the allegations in
the complaint."

Id. at 563.

Under the Twombly standard,

a

"court deciding a motion to

dismiss must not make any judgment about the probability of the
[,] must assume all the allegations in

plaintiffs' success .
the complaint are true

[, and]

(even if doubtful in fact)

must give the plaintiff the benefit of all reasonable inferences
derived from the facts alleged."
2001

v.

Fame

Jeans

Inc.,

525

Aktieselskabet AF 21. November
F.3d

8,

17

(D.C.

(internal quotation marks and citations omitted) .
will not suffice,
devoid of

'further

however,
factual

129 S. Ct. 1937, 1949

(2009)

if it

"tenders

enhancement. '"

-6-

2008)

A complaint

'naked assertion[s]'
Ashcroft v.

(quoting Twombly,

(alteration in Iqbal) .

Cir.

Iqbal,

550 U.S. at 557)

III. ANALYSIS
A.

Count 15 Fails to State a Claim for Fraud

In Count 15,

Sabre brings a claim for "Fraud with Respect

to TAES Pricing of and Payment to Sabre for Sabre TWISS II Scope
~~

of Work."

FAC

officers

Rebekah

Torres

pretended,

representations
price

terms

Dyer,

Kathy

Jones,

through

and

for

The crux of this

265-438.

several

Scott

II

and

to

Jerry

affirmative

of

omissions,

TWISS

is that TAES

Torres,

series

a

misleading

cl~im

accept

task orders,

Sabre's

while

secretly

reducing these price terms in proposals to the Government and
intending not to honor them once Sabre had performed the work.
Sabre

alleges

that

TAES'

apparent

acceptance

of

its

pricing

induced it to perform several TWISS II task orders that it would
not have performed had it known of TAES'

true intent to reduce

its prices.
To make out a
law,

a

claim for fraud under District of Columbia

plaintiff must

false representation,
a material fact,
( 4)

allege

that:

( 1)

251 F.

made

a

(3) the defendant had knowledge of its falsity,

in reliance on the misrepresentation,

Litig.,

defendant

(2) the representation was in reference to

the defendant intended to deceive,

reasonable.

the

See,

e.g.,

Supp.

In

re

2d 77,

100
-7-

U.S.

( 5)
and

the plaintiff acted
(6)

Office

(D.D.C.

2003)

the reliance was
Prods.

Co.

Sec.

(citing R · & A,

Inc.

v.

Kozy Korner,

Hercules

Co.

&

v.

Inc.,

672

Shama Rest.

A.2d

1062,

Corp.,

1066

(D.C.

613 A.2d 916,

1996);

923

(D.C.

1992)). 2
Because
"should

disputes

generally

be

relating
addressed

contractual

to
within

the

obligations

principles

of

law

relating to contracts," the D.C. Court of Appeals has held that
"conduct occurring during the course of a contract dispute may
be

the

subject of

a

fraud[]

[claim]"

only if

(1)

"there are

facts separable from the terms of the contract upon which the
tort

may

independently

rest,"

and

"there

(2)

is

a

duty

independent of that arising out of the contract itself, so that
an action for breach of contract would reach none of the damages
suffered by the tort."
961

A.2d

Const.,

1080,

LLC v.

1089

Choharis v. State Farm and Casualty Co.,
(D.C.

2008);

see

Emerson Process Mgmt.

also

Power

&

Ulliman

Schutte

Water Solutions,

No. 02 Civ. 1987 (RMC), 2006 WL 1102838, at *14 (D.D.C. Mar. 31,
2006)

(emphasizing "the conceptual distinction between breach of

contract claims and tort claims
from

recasting

claims")

ordinary

breach

[which]
of

preclud [es]

contract

claims

plaintiffs
into

tort

(citation and punctuation omitted).

2

Both parties cite District of Columbia law and thus appear to
agree that such law applies.
-8-

TAES

argues

"impermissibly
claims

into

contract.'"
The

that

seeks

Count
to

claims

15

transform

Def.'s Mem. at 1.
in

be

dismissed

Sabre's

'fraud

for

allegations

must

in

because

breach

the

of

it

contract

performance

of

a

The Court agrees.

Count

15

basically

claim

that

TAES

falsely assured Sabre it would pay Sabre's invoices

(at specific

prices)

the

for

subcontracting

work

performed

under

Teaming

Agreement, thereby inducing Sabre to perform such subcontracting
work.

Such

duplicative,

a
of

claim

is

Sabre's

entirely
claim that

intertwined,
TAES

if

breached

not
the

wholly
Teaming

Agreement by reducing Sabre's prices in Government proposals and
failing to pay Sabre's invoices in full.
111-116.
Appeals'

See FAC

~~

105, 108,

Count 15 thus falls squarely within the D.C. Court of
admonition that "even a

breach of
fraud."

a

contract

Choharis,

'willful, wanton or malicious'

to pay money cannot

961

A. 2d at

1089

support

a

claim of

(citing Bragdon v.

2512

Assocs. Ltd. P'ship, 856 A.2d 1165, 1173 (D.C. 2004)).
Sabre

now

argues,

in

its

Opposition brief,

that

it

has

stated a claim for fraud in the inducement, rather than fraud in
the execution of a contract, such that Count 15 is not barred by
the rule stated in Choharis.
argument.
in

the

There are two problems with this

First, as TAES correctly points out,
inducement"

barely

appears
-9-

in

the

the term "fraud

113-page

FAC,

and

Def. 's Reply

certainly not in the lengthy title of this Count.
at 4.

Although this fact is not dispositive of whether Sabre

states such a claim,

it does indicate that Sabre's reference to

a fraudulent inducement theory in its Opposition brief is merely
a last-minute effort to avoid the rule of Choharis.
More
does

importantly,

recite the phrase

claims

to

obligations

have

been

under

the

in

the

single

instance

"fraudulently induced"
"fraudulently
Teaming

induced"

Agreement,

in which Sabre
in Count 15,
to

perform

rather

something it was not contractually required to do.
436

("As a

Sabre

was

result

[of TAES'

fraudulently

than

it
its

to

See FAC

do
~

representations regarding prices]

deprived

of

the

right

to

refuse

to

perform and was fraudulently induced into spending millions of
dollars

[to perform] . ") . 3

injured

solely

by

virtue

Further,
of

Sabre purports to have been

TAES'

failure

to

perform

an

obligation it was contractually obligated to perform under the
Teaming Agreement.

3

Sabre now argues that TAES'
representations fraudulently
induced it to enter specific task orders.
This attempt to
recast the parties' relationship as a series of small contracts
rather than the overarching Teaming Agreement is contradicted by
the allegations of the FAC. As Sabre points out numerous times,
the Teaming Agreement required Sabre to perform TWISS II subtask
orders.
See FAC ~ 77 ("'[Sabre] shall provide the Team with all
personnel and provide all services required by .
any TWISS
TOR awarded to the Team, excepting Leading Members Scope of
Work.'") (emphasis added) (quoting Teaming Agreement§ 1.2.C).
-10-

As

such,

the

allegations

of

fraud

in

Count

15

are

completely intertwined with TAES' performance of its obligations
under the Teaming Agreement,
not

a

fraud,

remedy.

and Sabre's remedy is a contract,
See

Choharis,

961

A.2d

(independent claim for fraud is cognizable only if
facts

at

1089

"there are

separable from the terms of the contract upon which the

tort may independently rest," and "there is a duty independent
of that arising out of the contract itself so that an action for
breach of contract would reach none of the damages suffered by
the tort.")

(emphasis added).

For the foregoing reasons, Count 15 shall be dismissed. 4
B.

Count 16 Fails to State a Claim for Fraud

In Count 16, Sabre alleges that on September 5, and October
18, 2010, it notified the Government that TAES had "breached the
Teaming Agreement and owed Sabre millions of dollars on unpaid
[]

invoices."

Letter

of

Concern

and/or remedial
not

been

FAC

paid.

~

to

440.
TAES

The Government,
threatening

action against TAES
In

response,

on

if

to

in turn,
take

issued a

administrative

its subcontractors had

October

24,

2010,

TAES

represented to the Government that it had paid all amounts due

4

Having concluded that Sabre is limited to a contract remedy,
the Court does not reach TAES' alternative argument that the
economic loss doctrine independently bars Sabre's Count 15.
-11-

to Sabre.
was

Sabre contends this response was knowingly false and

intended

"to deceive

the

U.S.

Government

TAES was current on its payments,
Government
FAC

~

from

442-44.

requiring

so as to

[TAES]

to

pay

into

believing"

"prevent the U.S.

Sabre's

invoices [.]"

Sabre claims that these circumstances amount to

fraud.
As

set

forth

above,

the

element

prerequisite to recovery in fraud.

It

that the Government relied on TAES'
show

that

suffered

it

justifiably

loss

as

a

relied

of

(D.C. 2005)

a

representations; Sabre must

on

such
Va.

Psychologists v. Grp. Hosp. & Med. Servs.,
1238

is

is not enough to show

See

result.

reliance

representations
of

Acad.
Inc.,

and

Clinical

878 A:2d 1226,

("[T]he maker of a fraudulent misrepresentation

is subject to liability for pecuniary loss suffered by one who
justifiably relies upon the truth of the matter misrepresented,
if his
the

[or her]

course

of

reliance is a substantial factor in determining
conduct

that

results

in

his

[or

her]

loss.")

(citing Restatement (Second) of Torts§ 546 (1977)).
Sabre

does

not

purport

representations to the Government.

to

have
In fact,

relied

on

TAES'

it clearly states

that it believed its invoices had not been paid and continued to

-12-

believe as much notwithstanding TAES'

representations otherwise.

See FAC ~440. 5
Sabre
requirement
fulfill

its

Government,
taking

argues

because
"duty"
which

further"

Government.

that
it

it

nevertheless

was

entitled to

not

to

make

purportedly
action

in

P 1 . ' s Opp' n at 13 .

satisfies
assume

inaccurate

that

reliance

TAES would

statements

to

the

(Sabre)

into

"not

communications

with

the

induced
its

the

it

This argument shows only that

Sabre relied on its own assumptions regarding what TAES would do
or say 1

not on what TAES actually did or said.

has not alleged that it relied on TAES'

Because Sabre

representations to the

Government, Sabre does not state a claim for fraud.

6

5

Sabre. cites Nader v. Allegheny Airlines, Inc., 512 F.2d 527,
547-49 (D.C. Cir. 1975) rev'd on other grounds, 426 U.S. 290
(1976), apparently for the proposition that it may recover in
fraud based on the Government's reliance on TAES' statements.
Nader does not support such a proposition.
The Court of Appeals
in
Nader
held
merely
that
a
party
who
relies
on
a
misrepresentation can sometimes recover against its maker even
if that party, referred to in the decision as a "third party,"
is not. the intended or direct recipient of the misstatement.
See id. at 548; accord Armstrong v. Accrediting Council for
Continuing Educ. & Training, Inc., 961 F. Supp. 305, 309 (D.D.C.
1997) .
The Court of Appeals did not suggest that a plaintiff,
such as Sabre,· who has not relied on a misrepresentation, can
recover for fraud.
6

Sabre also does not identify any independent harm flowing from
TAES' .statements.
It asserts vaguely that the statements
prevented the Government from taking remedial action to cure the
underlying breach of contract.
FAC ~ 442-44; see also Pl. 's
Opp' n at 12.
Sabre cannot spin a fraud claim out of conduct
-13-

Having
instance,

failed

Sabre

also

abetting fraud.
Al Baraka Inv.
2003)
a

to

state

claim

for

not

does

a

state

a

Pl.'s Opp'n at 11,
&

Dev.

Corp.,

274 F.

14.

fraud

claim

cause

of

the

for

Supp.

aiding

2d 86,

105

and

(D.D.C.

must be tied to

Consequently,

action[.]").

first

See, e.g., Burnett v.

("Liability for aiding and abetting .

substantive

in

Count

16

shall be dismissed.
C.

Count 17 Fails to State a Claim for Misappropriation

In Count 17, Sabre alleges that TAES secretly used its PSC
license

in

a

Operating Base

proposal
("FOB")

to

the

Cruz

Government

Morris,

and never

that it was submitting such a proposal.
that,

for

work

at

First

informed

Sabre

Sabre further asserts

after TAES was awarded the Cruz Morris task order,

TAES

concealed the award from Sabre and declined to allocate Sabre
Such conduct, Sabre maintains,

its rightful share of the work.

amounts to "fraudulent misappropriation and use of Sabre's PSC
license" and entitles it to "lost profits for its scope of the
work" at FOB Cruz Morris.

FAC

~~

450-51.

that
merely
caused
a
known
contract
dispute
to
remain
unresolved.
See Choharis, 961 A.2d at 1089 (observing that "the
mere
disappointment
of
plaintiff's
hope
to
receive
his
contracted-for benefit" would not support fraud claim even in
the presence of bad faith) .
-14-

As TAES rightly points out,

Sabre identifies no authority

in the District of Columbia recognizing a claim for "fraudulent
misappropriation" of a license.

Def.'s Mot. at 16. In response,

Sabre maintains that it has stated a claim either for fraud or
unfair competition.

See Pl.'s Opp'n at 14-16.

The fraud theory is easily disposed of.
TAES,

Sabre reasons that

by including a photocopy of Sabre's

PSC license in the

Cruz Morris

proposal,

defrauded

the

Government

into believing

its use of the permit was authorized when it was not.
450;

Pl.'s

recover

Opp'n

for

Government

at

14.

fraudulent

unless

it

As

explained

above,

representations

demonstrates

that

it

FAC

Sabre

~

cannot

directed

at

the

was

of

such

aware

representations and relied on them, which Sabre does not allege.
As a result, Count 17 does not state a claim for fraud.
The

unfair

competition

theory

also

"Unfair

fails.

competition is not defined in terms of specific elements, but by
various acts that would constitute the tort if they resulted in
damages."
147, 153

Hanley-Wood LLC v. Hanley Wood LLC,
(D.D.C. 2011)

(emphasis added)

783 F. Supp.

(citing Furash

&

2d

Co. v.

McClave, 130 F. Supp. 2d 48, 57 (D.D.C. 2001)) . 7

7

Activities that may give rise to a claim for unfair competition
include "defamation, disparagement of a competitor's goods or
business methods,
intimidation of
customers or employees,
interference with access to the business, threats of groundless
-15-

Sabre has not described any way in which its business was
damaged by TAES'
proposal.
conduct

use

of

the

is

no

indication,

There
injured

Sabre's

PSC

license

business

for

in

the

Cruz

example,

Morris

that

TAES'

impaired

reputation,

its

ability to compete for any opportunity, resulted in any loss of
good will between Sabre and the Government, or caused any other
competitive injury.

Sabre alleges only that TAES'

use of the

license without

Sabre's participation violated the exclusivity

provisions

the

of

"unlawfully
obtained

reap[]

without

Teaming

Agreement
that

profits
Sabre."

and

~~

FAC

446,

allowed

could

not

TAES
have

While

451.

to
been

these

allegations may support a claim for breach of contract or unjust
enrichment,
therefore

they
do

do

not

not

identify any competitive

support

a

cause

of

action

injury,
for

and

unfair

competition.
In its Opposition brief, Sabre argues that it did suffer a
competitive
"time,

injury

labor

and

because
talent

TAES'

conduct

deprived

expended

to

it

of

the

obtain

and

s Opp' n at 16 ,

successfully use the PSC license in Iraq."

p1 . '

This argument finds no support in the FAC.

There are no facts

suits, commercial bribery, inducing employees to sabotage, [and]
false advertising or deceptive packaging likely to mislead
customers into believing goods are those of a competitor."
Hanley-Wood LLC, 783 F. Supp. 2d at 153 (citing B & W Mgmt.,
Inc. v. Tasea Inv. Co., 451 A.2d 879, 881 n.3 (D.C. 1982)).
-16-

suggesting

that

TAES'

use

of

the

license

in the

Cruz Morris

proposal hindered Sabre's ability to use the license in other
contexts, threatened its ability to maintain the license, or in
any way deprived Sabre of the general benefits of the license.
Because

Sabre

has

not

identified

resulting fror(l the Cruz Morris
claim for unfair competition.
Co.,

70

F.3d

524,

529

any

incident,

competitive

it

does not

injury
state a

See Pac. Grp. v. First State Ins.
(9th

Cir.

1995)

(finding

unfair

competition theory deficient because, inter alia, plaintiff "did
not allege that the false advertising
(emphasis added);

Yantha v.

CV-1948

2013

2013)

ARR JMA,
(dismissing

failed

to

"stat [e]

WL

unfair
a

caused its injury")

Omni Childhood Ctr.,
5327516,

at

competition

competitive

*7

(E.D.N.Y.

claim

injury

Inc.,

as

because
a

No.

13-

Sept.

20,

complaint

result

of

any

unfair competition by defendants").
For the foregoing reasons, Count 17 shall be dismissed.
D.

In

Count 18 States a Claim for Conversion of Equipment

Count

18,

Sabre

brings

a

claim

Sabre's property and unjust enrichment."

for

"conversion

of

Although styled as a

single claim, Count 18 is based on two separate incidents, which
require independent analysis.
First,

Sabre alleges that it temporarily loaned or leased

to TAES more than $1 million worth of equipment so TAES could
-17-

perform

the

Team's

work

at

Joint

Security

Station

("JSS")

Shield.

According to Sabre, at the conclusion of the JSS Shield

job, TAES failed to return the equipment, and instead, sold the
property to one or more third parties without Sabre's knowledge
or consent.

~

FAC

455. Sabre contends that these circumstances

constitute conversion.
"The
wrongful

essence

of

retention

Shehyn v.

Dist.

The Court agrees.
a

of

conversion

of Columbia,

a

wrongful

taking or a

after

property

is

a

rightful

possession."

392 A.2d 1008,

1012

(D.C.

1978).

To state a claim for conversion under District of Columbia law,
the

plaintiff

must

ownership, dominion,
of another,
thereto."

allege

"(1)

an

unlawful

exercise,

(2)

of

or control,

(3)

over the personal property

(4) in denial or repudiation of that person's rights
Xereas v. Heiss,

933 F.

Supp.

2d 1,

6

(D.D.C.

2013)

(citing cases); see also Baltimore v. Dist. of Columbia, 10 A.3d
1141,

1155

(D.C.

2011).

Each

of

these

elements

is

met

by

Sabre's allegations that TAES sold equipment belonging to Sabre
to third parties without Sabre's consent.
TAES

argues

that

where,

as

in

this

initial possession of property was lawful,

case,

a

defendant's

a plaintiff may not

recover under a conversion theory unless it establishes that it
first made a demand for the property, which Sabre has not done.
See Def. 's Mem.

at

17. (citing

Poullard v.

-18-

Smithkline Beecham

Corp., No.
Nov.

30,

02 Civ.

1590

2005)).

observed

that

(CKK),

However,

"[a]

demand

2005 WL 3244192,
the

for

D.C.
the

Court

at *12
of

return

of

(D.D.C.

Appeals

has

property

'is

necessary only when there are no other facts and circumstances
independently establishing a conversion.'"
Co. v.

Pub. Serv. Comm'n of D.C.,

(emphasis added)
(D.C. 1989)).
or

more

61 A.3d 662,

(citing Bowler v.

Joyner,

678

(D.C. 2013)

562 A. 2d 1210,

1212

TAES' purported sale of Sabre's equipment to one

third

parties

"independently establish"
rights.

Washington Gas Light

without
its

Sabre's

repudiation

of

would

consent
Sabre's

property

Therefore, no demand was required. 8

Sabre's second theory is that TAES' use of its PSC license
in

the

discussed,

Cruz

Morris

proposal

constituted

conversion.

As

there are no facts indicating that Sabre lost any of

the benefits of its license because of TAES'
PSC license in the Cruz Morris proposal.

inclusion of the

Consequently,

has not stated a claim for conversion of its PSC license.

8

Sabre
See

TAES also claims that it had a lease agreement with Sabre,
which limits Sabre to a contract remedy because a plaintiff "may
not
cloak a breach of contract claim in the dress of
conversion."
Def. 's Mem. at 17.
Sabre is not recasting a
contract claim as one for conversion; its allegations give rise
to a claim for conversion independent of any contract remedies
it may also have. See Sloan ex rel. Juergens v. Urban Title
Servs., Inc., No. 06 Civ. 1524 (CKK), 2011 WL 1137297, at *7
(D.D.C. Mar. 27, 2011).
-19-

Kaempe v.

Myers,

367

F.3d

958,

964

(D.C.

Cir.

2004)

("Where

there has been no dispossession of property rights, there can be
no action for conversion.") . 9
For

the

foregoing

reasons,

Count

18

shall

be

dismissed

insofar as it alleges conversion of Sabre's PSC license, but not
insofar as it alleges conversion of Sabre's equipment.
E.

TAES' Motion to Dismiss Count 20 is Moot

Count

20

is

styled

as

a

Sabre's Past Performance."

claim

However,

for

"Misappropriation of

in Sabre's Reply brief in

support of its Motion to Amend the Complaint, Sabre voluntarily
withdrew this count.

See Pl.'s Reply ISO Mot. to Amend at 2 n.l

[Dkt .

further

No.

2 3 9]

withdrawing

("On

Count

20,

lAC

~~

reflection,

Sabre

470-77[.]").

is

TAES'

voluntarily
Motion

to

Dismiss Count 2 0 is therefore moot. 10
F.

Count 21 Is Duplicative of Count 3

In Count 21, Sabre brings a claim for "lost [] revenues and
delay damages" resulting from TAES'

inability to timely perform

the task order at JSS Shield in early 2010.

9

Sabre acknowledges

Sabre argues, in the alternative, that TAES was unjustly
enriched by virtue of having used the PSC license to win the
task order at FOB Cruz Morris.
Because Count 8 of the FAC
already alleges unjust enrichment with respect to the Cruz
Morris job, any assertion of such theory in Count 17 is merely
duplicative. See FAC ~ 222(B).
10
It is unclear why Sabre did not remove this claim from its FAC
prior to filing it.
-20-

that this count is based on the same facts and the same legal
theory as the breach of contract claim alleged at Count 3.
Opp' n

at

21.

different

At best, . Counts

theory

contract.

of

harm

resulting

Consequently,

duplicative

of

Count

and 21 articulate a

3

Count
Cf.

3.

from

21

Fed.

the

shall
R.

Civ.

same

be
P.

Pl's

slightly

breach

dismissed

of
as

(~[E]ach

10(b)

claim founded on a separate transaction or occurrence .

. must

be stated in a separate count[.]").
G.

Count 22 Fails to State a Claim for Fraud

Finally,
~fraud,"

in

Count

22,

Sabre

which relates, not to the

brings

another

claim

of

performance of TWISS

~arties'

work under the relevant agreements, but to TAES' conduct in this
litigation.

In particular,

Sabre contends that TAES,

assistance of its prior counsel,
by

concealing

declarations,

material
fabricating

defrauded Sabre in this action

evidence,

filing

evidence,

and

Sabre

claims

it

was

devoted substantial resources,
of

attorneys

fees)

to

alleged

the

outset,

in

Count

22

the
is

defenses

See FAC ~~ 499,
virtue

of

it
501,

having

time and money (including payment

defend

fraudulent claims and defenses.
At

~by

damaged

false

knowingly

mounting

knew were not supported by the evidence:
506.

with the

Court

FAC

~

505.

emphasizes

extremely
-21-

assertedly

TAES'

against"

that

serious,

the

and

misconduct

the

Court's

disposition of this count is not intended to suggest that Sabre
is without recourse in other venues for such misconduct should
it

be

proven.

The

narrow

question

presented,

however,

is

whether Sabre's allegations state a claim for fraud or any other
cause of action.

The Court concludes that they do not.

First, as with the fraud claims in Counts 16 and 17, there
is no allegation that Sabre relied, to its detriment, on any of
the allegedly false representations and omissions made by TAES
in

this

lawsuit.

contested

the

steadfastly

To

factual

adhered

the

underpinnings

to

its

Sabre

contrary,

version

of
of

has

TAES'
the

vigorously

defenses

facts

and

throughout.

Sabre also persisted in its attempts to obtain discovery from
TAES

when

appears

documents

now

to

were.

have

previously produced.

not

immediately

obtained
Thus,

the

forthcoming,

documents

that

were

and
not

it is clear Sabre did not rely on

the truth of any of the alleged misrepresentations, and without
such reliance,

Sabre does

not

state a

claim for

fraud.

Cf.

Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 71 (2d Cir. 1990)
(justifiable

reliance

is

essential

element

of

an

"ordinary

common-law fraud action" even where plaintiff alleges bad faith
litigation)
Second,

and

more

broadly,

Sabre

cites

no

authority

suggesting that it may maintain any independent cause of action
-22-

for the misconduct alleged in Count 22.

Sabre relies on Jemison

v. Nat'l Baptist Convention, USA, Inc., 720 A.2d 275 (D.C. 1998)
and Chambers v.

NASCO,

Inc.,

501 U.S.

32,

50

(1991)).

These

cases merely affirm a court's inherent power to sanction a party
for misconduct during the course of the litigation; they do not
hold,

or

even

intimate,

such

that

behavior

independent cause of action for damages.
at 43-55; Jemison,
its

72 0 A. 2d at 2 82

supports

See Chambers, 501 U.S.

(a court "may

safe~y

inherent power to sanction those who engage

conduct in the course of litigation")

an

rely on

in bad faith

(citing Chambers, 501 U.S.

at 50).
Nor

has

the

Court

discovered

any

case

holding

that

bad

faith conduct in litigation gives rise to an independent cause
of action for damages.
See

Russell

v.

("Plaintiff's]

The weight of the authority is contrary.

Principi,

257

F.3d

815,

date

action

(D.C.

Cir.

2001)

effort to pursue an independent cause of action

for bad faith litigation abuse against
[T] o

821

no circuit

exists");

court

has

Interstate

[defendant]

held that

Fire

Wisconsin, Inc., 136 F. 3d 830, 836

& Cas.

a

fails.

federal

Co.,

Inc.

(D.C. Cir. 1998)

cause of
v.

1218

(rejecting a

tort claim for "fraud on the court" because "[a]lthough the act
complained of is styled a
court's

equitable

'fraud,'

discretion")

the remedy lies within the

(citations

-23-

omitted) ;

see

also

Ortega v. City of New York,

9 N.Y.3d 69, 83

recognize

for

independent

tort

(2007)

spoliation of

(declining to

evidence

because

such conduct is adequately addressed through range of remedial
options available to court) .
Given that Sabre may seek relief for the misconduct alleged
in Count 22 pursuant to Rule 37 of the Federal Rules of Civil
Procedure

and

the

Court's

inherent

powers,

Count

22

shall

be

dismissed.
IV. CONCLUSION
For the foregoing reasons, TAES' Motion to Dismiss shall be
gran ted in part and denied in part.

this Memorandum Opinion.

January 30, 2014

Copies to: attorneys on record via ECF

-24-

An Order shall accompany