People, Technology and Processes, LLC v. Science Applications International Corporation et al
Filing
24
ORDER: Defendants' Dispositive Motion to Dismiss Plaintiff's Complaint (Dkt. 20) is denied. Defendants shall file an answer to the complaint within fourteen (14) days of this Order. Signed by Judge James S. Moody, Jr on 8/7/2014. (LN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
PEOPLE, TECHNOLOGY AND
PROCESSES, LLC,
Plaintiff,
v.
Case No. 8:14-cv-1356-T-30EAJ
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION AND
LEIDOS, INC.,
Defendants.
_____________________________________/
ORDER
THIS CAUSE comes before the Court upon Defendants’ Dispositive Motion to
Dismiss Plaintiff’s Complaint (Dkt. 20) and Plaintiff’s Memorandum of Law in Opposition
(Dkt. 21). The Court, having reviewed the motion, response, and being otherwise advised
in the premises, concludes that the motion should be denied.
BACKGROUND
This is a one-count breach of contract case involving government contracts. Plaintiff
People, Technology and Processes, Inc. (“PTP”), prior to its relationship with Defendants
Science Applications International Corporation and Leidos, Inc. (collectively, “SAIC”),
provided modeling and simulation tools to the U.S. Army Space and Missile Defense
Command / Army Forces Strategic Command in support of U.S. and Coalition Forces in
Afghanistan. To continue providing services to the U.S. Army Space and Missile Defense
Command / Army Forces Strategic Command, PTP entered into an exclusive teaming
arrangement with SAIC to provide services on a Warfighter Modeling, Simulation, Analysis,
and Support Indefinite Delivery, Indefinite Quantity Contract.
The breach of contract claim relates to Subcontract Task Order 0006 (“TO 0006”).
Specifically, PTP alleges that SAIC breached its obligations under TO 0006. On or about
May 22, 2013, PTP began to deploy PTP Personnel in Afghanistan to fill 49 Full Time
Equivalent positions ordered under TO 0006. At the outset of TO 0006, SAIC delayed PTP
from deploying the 49 Full Time Equivalent positions. The complaint alleges:
SAIC breached TO 0006 and therefore the Subcontract by (i) failing to
permit PTP to deploy the 49 Full Time Equivalent positions (ii)
prematurely commencing the drawdown of PTP Personnel, and (iii)
prematurely terminating TO 0006 all of which prevented PTP from
realizing the benefit that was the basis for the Volume Discount. Over
the course of performance of TO 0006, SAIC limited PTP Personnel to
a maximum of 32 Full Time Equivalents during the Base Period, which
is far below the 49 Full Time Equivalents bargained for under TO 0006.
(Dkt. 1 at ¶31).
SAIC’s breach damaged PTP because the Volume Discount was based on spreading
overhead, general, and administrative costs over a larger number of Full Time Equivalents.
Without the Volume Discount, the Modeling and Simulation Services under TO 0006
resulted in $16,987,266.71 in billing for PTP Personnel instead of $12,006,815.28, a loss to
PTP in the amount of at least $4,980,451.43.
SAIC moves to dismiss the breach of contract claim under Fed. R. Civ. P. 12(b)(6).
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STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) allows a complaint to be dismissed for
failure to state a claim upon which relief can be granted. When reviewing a motion to
dismiss, a court must accept all factual allegations contained in the complaint as true, and
view the facts in a light most favorable to the plaintiff. See Erickson v. Pardus, 551 U.S. 89,
93-94 (2007).
However, unlike factual allegations, conclusions in a pleading “are not
entitled to the assumption of truth.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). On the
contrary, legal conclusions “must be supported by factual allegations.” Id. Indeed,
“conclusory allegations, unwarranted factual deductions or legal conclusions masquerading
as facts will not prevent dismissal.” Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185
(11th Cir. 2003).
Under Federal Rule of Civil Procedure 10(c), exhibits attached to a complaint are
considered a part of the complaint for all purposes, including a Rule 12(b)(6) motion.
DISCUSSION
PTP’s complaint contains one breach of contract claim. The parties agree that the
relevant contract must be construed under Virginia law. Under Virginia law, the “elements
of a breach of contract action are (1) a legally enforceable obligation of a defendant to a
plaintiff; (2) the defendant’s violation or breach of that obligation; and injury or damage to
the plaintiff caused by the breach of obligation.” Squire v. Virginia Housing Dev. Authority,
758 S.E.2d 55, 60 (Va. 2014) (quoting Filak v. George, 594 S.E.2d 610, 614 (2004)). The
Court concludes that PTP’s complaint sufficiently alleges these elements.
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SAIC’s motion to dismiss reads like a motion for summary judgment. It also focuses
on arguments that are irrelevant at this point. For example, SAIC argues that PTP cannot
allege a breach of contract claim against SAIC for SAIC’s decision to decline to exercise an
option to renew. As PTP points out in its response, PTP is not asserting such a claim. Thus,
this argument is without merit.
SAIC also argues that SAIC was not required to authorize PTP to utilize 49 Full Time
Equivalents. This is a factual argument that is more appropriate on a motion for summary
judgment, after the parties have conducted discovery on the relevant issues. At this stage,
PTP adequately alleges that SAIC breached TO 0006 and therefore the Subcontract when it
prevented PTP from deploying the 49 Full Time Equivalent positions, prematurely
commenced the drawdown of PTP Personnel, and prematurely terminated TO 0006. SAIC’s
legal obligation to order the 49 Full Time Equivalent positions is established by the contract
documents incorporated by reference into the complaint. The allegations of the complaint
identify the dates and actions leading up to SAIC’s acceptance and delivery of TO 0006.
SAIC’s argument about the parole evidence rule is inappropriate at this stage. First,
it appears that the parol evidence rule is inapplicable because the documents relied upon by
PTP are incorporated into and are part of the contract. Moreover, the Court, at this stage,
cannot determine the parties’ intent and whether the relevant contracts are ambiguous.
Finally, SAIC moves to dismiss PTP’s breach of contract claim to the extent that PTP
alleges in paragraph 40 of the complaint that: “SAIC has failed and refused to enter into good
faith negotiations to resolve the Demand for Adjustment, which refusal constitutes an
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independent breach.” SAIC asserts that this purported breach amounts to a breach of an
“agreement to agree” that is not recognized under Virginia law. At this stage, the Court
disagrees. SAIC does not recognize the distinction between a duty to negotiate a dispute in
good faith pursuant to an enforceable contract (which is alleged here) and a duty to negotiate
in good faith to enter into an enforceable contract (referred to as an “agreement to agree”).
Here, PTP has alleged an obligation on SAIC’s part to negotiate a dispute in good faith under
a specific term contained in the contract between the parties. Thus, this independent breach
is sufficiently alleged at this stage.
It is therefore ORDERED AND ADJUDGED that:
1.
Defendants’ Dispositive Motion to Dismiss Plaintiff’s Complaint (Dkt. 20) is
denied.
2.
Defendants shall file an answer to the complaint within fourteen (14) days of
this Order.
DONE and ORDERED in Tampa, Florida on August 7, 2014.
Copies furnished to:
Counsel/Parties of Record
S:\Even\2014\14-cv-1356.mtdismiss-deny20.frm
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