Texas Ed Tech Solutions, LLC v. Authentica Solutions, LLC et al
OPINION and ORDER granting in part and denying in part 77 Texas Ed's Motion to Dismiss Defendant Authentica's Counterclaims. Counterclaim Count I is DISMISSED. Authentica may proceed with Counterclaim Counts II and III. Signed by Judge Steven D. Grimberg on 04/01/2021. (bdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
TEXAS ED TECH SOLUTIONS, LLC,
AUTHENTICA SOLUTIONS, LLC and
Civil Action No.
OPINION AND ORDER
This matter is before the Court on Plaintiff Texas Ed Tech Solutions, LLC’s
(Texas Ed) motion to dismiss counterclaims asserted by Defendant Authentica
Solutions, LLC (Authentica) [ECF 77]. For the following reasons, Texas Ed’s
motion is GRANTED IN PART and DENIED IN PART.
The facts alleged in Texas Ed’s Amended Complaint are more thoroughly
set forth in the Court’s September 20, 2020 Order denying a motion to dismiss filed
by Authentica and Defendant BrightBytes, Inc.1 On October 19, Authentica filed
its Answer and asserted three counterclaims against Texas Ed for (1) breach of
contract, (2) money had and received, and (3) unjust enrichment.2 On November
9, Texas Ed filed the instant motion to dismiss those counterclaims.3
Authentica filed its response in opposition to Texas Ed’s motion to dismiss on
November 23; Texas Ed filed its reply on December 7.4
The Court evaluates a motion to dismiss a counterclaim pursuant to Federal
Rule of Civil Procedure 12(b)(6) in the same manner as a motion to dismiss a
complaint. United States v. Zak, 481 F. Supp. 3d 1305, 1307 (N.D. Ga. 2020).
To survive a motion to dismiss under Rule 12(b)(6), “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) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible if “the plaintiff
pleads factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at
556). At this juncture, “all well-pleaded facts are accepted as true, and the
reasonable inferences therefrom are construed in the light most favorable to the
ECF 81; ECF 86.
plaintiff.” FindWhat Inv’r Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011).
Although the “plausibility standard is not akin to a probability requirement at the
pleading stage,” it demands “enough fact[s] to raise a reasonable expectation that
discovery will reveal evidence of the claim.” Am. Dental Ass’n v. Cigna Corp.,
605 F.3d 1283, 1289 (11th Cir. 2010) (citing Twombly, 550 U.S. at 556).
Texas Ed seeks the dismissal of each counterclaim asserted by Authentica.
The Court addresses each in turn.
Breach of Contract (Counterclaim Count I)
Authentica alleges Texas Ed breached the sales referral agreement
(Referral Agreement) between the parties by initiating this suit in the United States
District Court for the Western District of Texas. The Referral Agreement contains
a forum selection provision mandating that “Atlanta, GA shall be the venue for
any and all litigation arising by or under this Agreement.”5 On August 16, 2019,
Texas Ed initiated this case in the Texas court.6 On January 10, 2020, the Texas
court granted Defendants’ motion to transfer, finding the forum selection
ECF 16-1, at 5 § VII.
provision valid and enforceable.7 Authentica alleges Texas Ed’s incorrect choice of
forum constituted a breach of the Referral Agreement, which caused it damages
in the form of the attorneys’ fees and litigation costs it had to expend enforcing the
forum selection provision. Texas Ed, conversely, contends Authentica’s breach
counterclaim must be dismissed pursuant to Texas’s election of remedies
The elements of a breach of contract claim are “(1) the existence of a valid
contract; (2) the plaintiff performed or tendered performance; (3) the defendant
breached the contract; and (4) the plaintiff was damaged as a result of the breach.”
Bank of Texas v. VR Elec., Inc., 276 S.W.3d 671, 677 (Tex. App. 2008). Texas Ed
invokes the election of remedies doctrine, which “is an affirmative defense that,
under certain circumstances, bars a claimant from pursuing two inconsistent
remedies” and “may constitute a bar to relief when one successfully exercises an
informed choice between two or more remedies, rights, or facts that are so
inconsistent as to constitute manifest injustice.” Stephens v. Dallas Area Rapid
Transit, 50 S.W.3d 621, 628 (Tex. App. 2001).
The Court previously found that Texas law governs all substantive claims
related to the Referral Agreement [ECF 63, at 7–10].
The parties do not cite a case discussing whether a party may seek damages
under a breach of contract theory for its opponent filing a lawsuit in an incorrect
forum in the face of a valid forum selection clause. Texas Ed points to Tribble &
Stephens Co. v. RGM Constructors, L.P., in which the Texas Court of Appeals held
that “[t]he election of remedies doctrine precludes [defendant/counterclaim
plaintiff] from attempting to sustain a cause of action for money damages for the
breach of the venue provision.” 154 S.W.3d 639, 659 (Tex. App. 2004)
(emphasis added). In Tribble, the plaintiff/counterclaim defendant originally filed
suit in Travis County, Texas in derogation of a choice of venue clause that
mandated all suits involving the at-issue contract be resolved in Harris County,
Texas. Id. at 658. Defendant/counterclaim plaintiff filed a motion to transfer
venue, which the trial court granted. Id. Defendant/counterclaim plaintiff
plaintiff/counterclaim defendant’s failure to sue in the correct county in
conformity with the choice of venue provision. Id. The trial court granted
plaintiff/counterclaim defendant’s motion for summary judgment on the breach
of contract claim and the Texas Court of Appeals affirmed, holding:
[W]e decline to hold that [plaintiff/counterclaim
defendant’s] breach of the venue provision was a
material breach sufficient to sustain a separate cause of
action. [Defendant/counterclaim plaintiff] does not cite,
and we have not found, any authority to support its
claim that a separate cause of action exists for the breach
of this venue provision. Importantly, to the extent the
counterclaim plaintiff] sought specific performance of
that provision by filing its motion to transfer venue, and
the motion was granted. Therefore, [defendant/
counterclaim plaintiff] received a remedy for any breach
of the venue provision when the suit was transferred.
Accordingly, the trial court did not grant [plaintiff/
counterclaim defendant] more relief than requested
concerning [defendant/counterclaim plaintiff’s] venue
Id. (internal citations and punctuation omitted).
Authentica, conversely, points to the Northern District of Texas’s decision
in Vianet Group PLC v. Tap Acquisition, Inc., which found that the plaintiff may seek
attorneys’ fees as damages in a breach of contract action premised on the
defendant’s noncompliance with a forum selection clause when it initiated a prior
case in state court. No. 3:14-cv-3601-B, 2016 WL 4368302, at *4 (N.D. Tex. Aug. 16,
2016). The Vianet court expressly limited its decision to whether a party may
recover its attorneys’ fees as damages for a breach of contract claim. Id. at *4, *7–
*9. See also In re Nalle Plastics Family Ltd. P’ship, 406 S.W.3d 168, 175 (Tex. 2013)
(“While attorney’s fees incurred in prosecuting this claim are not compensatory
damages, the fees comprising the breach-of-contract damages are. If the
underlying suit concerns a claim for attorney’s fees as an element of damages . . .
then those fees may properly be included in a judge or jury’s compensatory
Crucial to this case, the Vianet court specifically noted: “Defendants do not
raise an important predicate issue: whether, under Texas law, a damages remedy
is available to a party whose forum selection clause has been breached, but who
possibly could obtain other traditional remedies for such a breach. The Court
assumes without deciding that such a remedy is available.” Id. at *4 n.6 (citing
Phoenix Network Techs. (Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605, 610
(Tex. App. 2005) (“A motion to dismiss is the proper procedural mechanism for
enforcing a forum-selection clause that a party to the agreement has violated in
filing suit.”); MPVF Lexington Partners, LLC v. W/P/V/C, LLC, 148 F. Supp. 3d 1169,
1182 (D. Colo. 2015) (predicting that, under Colorado law, the Colorado Supreme
Court would permit a damages remedy to party whose forum selection clause was
breached because no other remedy was available)).
Authentica focuses on the precise question answered in Nalle Plastics and
Vianet; i.e., whether it may properly seek its attorneys’ fees and costs as damages
for Texas Ed’s alleged breach of the forum selection clause. However, the Court
must first answer the threshold question not reached by the Vianet court;
can Authentica seek redress through a breach of contract action when it has
already sought and obtained a transfer to the correct forum? Although the Texas
Supreme Court has not yet weighed in, the Tribble decision—relying on the
election of remedies doctrine—prevents Authentica from doing so. The Court
agrees with the Tribble court’s reasoning and conclusion. Pursuant to the election
of remedies doctrine, “[r]emedies are inconsistent when one of the remedies
results from affirming the transaction and the other results from disaffirming the
transaction.” Calstar Props., L.L.C. v. City of Fort Worth, 139 S.W.3d 433, 440 (Tex.
App. 2004) (“A party is entitled to sue and seek damages on alternative theories
but is not entitled to recover on both theories; to do so is considered equivalent to
a ‘double recovery.’”). See also Fina Supply, Inc. v. Abilene Nat. Bank, 726 S.W.2d 537,
541 (Tex. 1987) (“The doctrine is designed to prevent a party who has obtained a
specific form of remedy from obtaining a different and inconsistent remedy for the
Here, Authentica has already chosen its remedy; the Texas court enforced
the forum selection clause—pursuant to Authentica’s motion—and transferred the
case to this district. Put another way, Authentica has received specific performance
of the forum selection provision. It would be inconsistent to allow Authentica to
also pursue a breach claim premised on the same contractual provision. Therefore,
like Tribble, Authentica’s counterclaim must be dismissed. However, this Order
does not prevent Authentica from seeking its attorneys’ fees and costs—if
appropriate—at a later stage of this litigation.
Money Had and Received and Unjust Enrichment (Counterclaim
Counts II and III)
In Counterclaim Counts II and III, Authentica alleges Texas Ed
impermissibly sought and obtained certain sums of money that it is not entitled to
retain.9 Texas Ed argues these claims must be dismissed because (1) Authentica
did not plead them with the requisite specificity under Rule 9(b), and (2) they are
barred by the voluntary payment doctrine.
According to Rule 9(b), “[i]n alleging fraud or mistake, a party must state
with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P.
9(b)). “When the Rule 9(b) pleading standard applies, the complaint must contain
Under Texas law, unjust enrichment is not an independent cause of action;
instead, it is “a theory of liability that a plaintiff can pursue through several
equitable causes of action, including money had and received.” Metro. Life Ins.
Co. v. Battle, No. 3:16-cv-2524-D, 2018 WL 3438913, at *2 (N.D. Tex. July 17,
2018) (collecting cases); Hancock v. Chicago Title Ins. Co., 635 F. Supp. 2d 539,
560 (N.D. Tex. 2009) (stating that, although “the Supreme Court of Texas and
other courts still occasionally refer to an ‘unjust enrichment claim’ . . . [t]hese
opinions do not [ ] characterize unjust enrichment as a separate cause of action
from money had and received; they consider it to be a general theory of
recovery for an equitable action seeking restitution.”). At this stage, the Court
will address both claims cumulatively without addressing the ultimate
validity of the unjust enrichment claim as a stand-alone tort.
factual allegations stating the time, place, and contents of the false representations,
as well as the identity of the person making the misrepresentation and what that
person obtained thereby.” Matter of Life Partners Holdings, Inc., 926 F.3d 103, 117
(5th Cir. 2019) (“In other words, to properly allege fraud under Rule 9(b), the
plaintiff must plead the who, what, when, where, and why as to the fraudulent
conduct.”). “Rule 9(b) is an exception to the liberal federal court pleading
requirements embodied in Rule 8(a)”; thus its “stringent pleading requirements
should not be extended to causes of actions not enumerated therein.” Am. Realty
Tr., Inc. v. Hamilton Lane Advisors, Inc., 115 F. App’x 662, 668 (5th Cir. 2004).
Here, Authentica’s counterclaims are not premised on allegations or
theories of fraud. To the contrary, “[a] cause of action for money had and received
is not premised on wrongdoing, but looks only to the justice of the case and
inquires whether the defendant has received money which rightfully belongs to
another.” Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 302
(Tex. 2015) (“To prove a claim for money had and received, a plaintiff must show
that a defendant holds money which in equity and good conscience belongs to
him.”). Texas Ed does not point to a single case applying the heightened
requirements of Rule 9(b) to such claims. In fact, at least one Texas federal court
has expressly rejected this precise argument. Merrill Lynch, Pierce, Fenner & Smith,
P.C. v. Greystone Servicing Corp., No. 3:06-cv-0575-P, 2007 WL 2729935, at *14
(N.D. Tex. Sept. 18, 2007). Although Authentica uses the word “mistake” in
pleadings its counterclaims—i.e., “Authentica employees mistakenly paid some of
the Texas Ed invoices submitted for the Second Contract to the detriment of
Authentica”10—the Court does not believe it carries talismanic legal significance.
Put another way, Authentica’s colloquial use of the word “mistake” does not
automatically transmute these claims into fraud-based causes of action. Therefore,
the Court finds Rule 9(b) does not apply. Since Authentica must only satisfy the
more liberal pleading requirements of Rule 8(a)—which Texas Ed does not
contend that Authentica has failed to satisfy—the motion to dismiss is denied as
to this issue.
Second, Texas Ed argues Authentica’s counterclaims are barred based on
“[m]oney voluntarily paid on a claim of right, with full knowledge of all the facts,
in the absence of fraud, deception, duress, or compulsion, cannot be recovered
back merely because the party at the time of payment was ignorant of or mistook
the law as to his liability.” BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 768
ECF 71, at 47 ¶ 66.
(Tex. 2005). The rule constitutes an affirmative defense to unjust enrichment and
restitution-based claims. Miga v. Jensen, 299 S.W.3d 98, 103 (Tex. 2009). Put another
way, “[t]he voluntary payment rule precludes a party from paying out his money,
leading the other party to act as though the matter were closed, and then be in the
position to change his mind and invoke the aid of the courts to get it back.” Id.
(punctuation omitted). As noted by the Texas Supreme Court, the doctrine
“has diminished in scope, as the rule’s equitable policy concerns have been
addressed through statutory or other legal remedies.” Id. (noting the Texas
Supreme Court had only affirmatively applied the doctrine in two cases during
the previous 40 years).
Here, the crux of Authentica’s counterclaims is its allegation that it
mistakenly paid to Texas Ed money on invoices to which the latter was not
entitled. Authentica does not argue the payments were involuntary; rather, it
alleges it “was unaware of several key facts about the payments that Texas Ed
alleged it was owed.”11 Although these payments could certainly fall within the
ambit of those barred by the voluntary payment doctrine, the Court believes such
a finding is inappropriate at this preliminary stage. As stated, the rule is an
ECF 71, at 45 ¶ 57.
affirmative defense. Texas Ed will bear the ultimate burden of proving its
applicability. The key inquiry of “whether or not a consumer had full knowledge
of all the facts in any given case will depend upon the specific circumstances
presented” and “may require balancing competing interests depending upon the
parties’ circumstances.” BMG, 178 S.W.3d at 776. See also Williams v. Lakeview Loan
Servicing LLC, No. 4:20-cv-01900, 2020 WL 7632257, at *5 (S.D. Tex. Dec. 22, 2020)
(“[A]s a defensive matter, [the voluntary payment] doctrine involves factual issues
that are inappropriate for resolution in a Rule 12(b)(6) context.”).
In sum, the Court believes this is a fact intensive inquiry the parties should
have the opportunity to develop during discovery. Therefore, Texas Ed is not
entitled to dismissal at this stage; however, it may—if appropriate—reassert its
argument on a motion for summary judgment.
Texas Ed’s motion to dismiss [ECF 77] is GRANTED IN PART and
DENIED IN PART. Counterclaim Count I is DISMISSED. Authentica may
proceed with Counterclaim Counts II and III.
SO ORDERED this the 1st day of April 2021.
Steven D. Grimberg
United States District Court Judge
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