Accuvant, Inc. v. Megadata Technology, LLC

Filing 9

MEMORANDUM OPINION. Signed by Judge Alexander Williams, Jr on 12/13/2012. (kns, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOUTHERN DIVISION

ACCUVANT, INC.,
Plaintiff,
v.
Civil Action No. 8:12-cv-01647-AW
MEGADATA TECHNOLOGY, LLC,
Defendant.

MEMORANDUM OPINION
Plaintiff Accuvant, Inc. brings this action against Defendant Megadata Technology, LLC.
Plaintiff’s Complaint sounds in breach of contract. Pending before the Court is Defendant’s
Motion to Dismiss. The Court has reviewed the record and deems no hearing necessary. For the
following reasons, the Court DENIES Defendant’s Motion to Dismiss.
I.

FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Accuvant, Inc. (Accuvant) is a Delaware corporation whose principal place of

business is Colorado. Accuvant has an office in Hanover, Maryland. Defendant Megadata
Technology, LLC is a Maryland company whose principal office is located in Fort Washington,
Maryland. Accuvant is a research-based cybersecurity consulting company. Megadata provides
consulting and subcontracting IT services to its clients and resells technology products to its
customers.
One of Accuvant’s customers is TriWest Healthcare Alliance (TriWest). Accuvant
engaged Megadata to serve as an intermediary reseller for certain TriWest orders of Accuvant’s
products and services. Under this arrangement, TriWest placed its orders with Megadata for
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Accuvant’s products or services. In turn, Megadata placed TriWest’s order with Accuvant
pursuant to its own purchase order. Then, Accuvant shipped the products directly to TriWest in
accordance with Megadata’s purchase order and invoice. Finally, Accuvant invoiced the
products to Megadata who, in turn, invoiced the products back to TriWest.
In contrast to this arrangement, TriWest purchased other products directly from Accuvant
time to time. According to Plaintiff, these direct orders did not relate to TriWest’s arrangement
with Megadata.
Between November 2010 and April 2011, Megadata issued a number of purchase orders
to Accuvant pursuant to requests Megadata received from TriWest. Accuvant alleges that, even
though it shipped the products to TriWest and submitted corresponding invoices to Megadata,
the latter failed to pay some invoices either completely or partially.
Accuvant engaged in a series of communications with Megadata’s CEO, Rob
Stringfellow, whereby it demanded payment on all outstanding invoices. According to Accuvant,
Stringfellow initially promised to pay all outstanding invoices. Subsequently, Stringfellow
contended that the amount Megadata owed was less than the amount for which Accuvant had
billed it. To date, Accuvant alleges that Megadata has failed to satisfy the overdue invoices.
On June 5, 2012, Accuvant filed its Complaint. Doc. No. 1. Accuvant’s Complaint
contains three Counts. Counts I and II are breach of contract claims for, respectively, a March
25, 2011 invoice and a December 3, 2010 invoice. Count III is for unjust enrichment.
Aggregating Counts I and II, exclusive of interest and costs, Accuvant alleges that
Megadata owes it $70,484.56. Under Count III, by contrast, Accuvant prays for damages
“believed to exceed $100,000.” Id. ¶ 57.

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On July 24, 2012, Megadata moved to dismiss. Doc. No. 5. Megadata argues that the
Court lacks jurisdiction because the amount in controversy is only $70,484.56. Alternatively,
Megadata asserts that Accuvant has failed to state a facially plausible breach of contract claim.
Briefing is complete on Megadata’s Motion to Dismiss.
II.

STANDARD OF REVIEW

A.

Motion to Dismiss—12(b)(1)
“There are two critically different ways in which to present a motion to dismiss for lack

of subject matter jurisdiction.” Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). “First, it
may be contended that a complaint simply fails to allege facts upon which subject matter
jurisdiction can be based.” Id. Where the defendant contends that the complaint fails to allege
facts sufficient to establish subject matter jurisdiction, “all the facts alleged in the complaint are
assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he
would receive under a Rule 12(b)(6) consideration.” Id. “Second, it may be contended that the
jurisdictional allegations of the complaint [are] not true.” Adams, 697 F.2d at 1219. In such
cases, “the court is free to consider exhibits outside the pleadings to resolve factual disputes
concerning jurisdiction.” Zander v. United States, 843 F. Supp. 2d 598, 603 (D. Md. 2012)
(internal quotation marks omitted) (quoting Smith v. Wash. Metro. Area Transit Auth., 290 F.3d
201, 205 (2002)).
B.

Motion to Dismiss—12(b)(6)
The purpose of a 12(b)(6) motion to dismiss is to test the sufficiency of the plaintiff’s

complaint. See Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). In two recent
cases, the U.S. Supreme Court has clarified the standard applicable to Rule 12(b)(6) motions.
Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).

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These cases make clear that Rule 8 “requires a ‘showing,’ rather than a blanket assertion, of
entitlement to relief.” Twombly, 550 U.S. at 556 n.3 (quoting Fed. R. Civ. P. 8(a)(2)). This
showing must consist of at least “enough facts to state a claim to relief that is plausible on its
face.” Id. at 570.
In deciding a motion to dismiss, the court should first review the complaint to determine
which pleadings are entitled to the assumption of truth. See Iqbal, 129 S. Ct. at 1949–50. “When
there are well-pleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.” Id. at 1950. In so doing,
the court must construe all factual allegations in the light most favorable to the plaintiff. See
Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999). The Court
need not, however, accept unsupported legal allegations, Revene v. Charles County
Commissioners, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual
allegations, Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations
devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847
(4th Cir. 1979).
III.

LEGAL ANALYSIS

A.

Subject Matter Jurisdiction
District courts have original jurisdiction of civil actions between citizens of different

states in which the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). In most cases,
“the sum claimed by the plaintiff controls the amount in controversy determination.” JTH Tax,
Inc. v. Frashier, 624 F.3d 635, 638 (4th Cir. 2010) (internal quotation marks omitted) (citing St.
Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)). “If the plaintiff claims a
sum sufficient to satisfy the statutory requirement, a federal court may dismiss only if it is

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apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed.” Id. (internal
quotation marks omitted) (citing St. Paul, 303 U.S. at 289).
“Defendants, seeking dismissal of diversity actions for lack of a sufficient amount in
controversy, must therefore shoulder a heavy burden.” Id. “They must show the legal
impossibility of recovery to be so certain as virtually to negative the plaintiff’s good faith in
asserting the claim.” Id. (internal quotation marks omitted) (citing Wiggins v. N. Am. Equitable
Life Assur. Co., 644 F.2d 1014, 1017 (4th Cir.1981)).
In this case, Megadata has failed to carry its “heavy burden” of showing that it is legally
impossible for Accuvant to recover more than $75,000. Accuvant alleges that it believes
damages on its unjust enrichment claim exceed $100,000. Under Maryland law, “the relief
available for unjust enrichment is not compensatory damages but restitution—the disgorgement
of the benefits that it would be unjust for the defendant to keep.” Boyd v. Bell Atlantic-Maryland,
Inc., 887 A.2d 637, 650 (Md. 2005). Accuvant argues that Megadata’s benefit for receiving
Accuvant’s goods and services without paying for them for over a year is measured by more than
the value of the goods at the time of sale, and implies that it needs discovery and/or trial to
determine this amount. Although Accuvant’s reasoning is no model of clarity, it suffices, in
conjunction with the Complaint’s allegations and Accuvant’s documentary evidence, to make it
legally possible that Accuvant could recover this amount (or, alternatively, an amount more than
$75,000). Accordingly, at least at this time, this Court has subject matter jurisdiction over this
action.
B.

Motion to Dismiss
Megadata argues, in the alternative, that Accuvant has failed to state a facially plausible

breach of contract claim. The Court disagrees. Accuvant’s allegations are reasonably detailed

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and create a plausible inference that the Parties had, minimally, an implied contract. Indeed,
Megadata concedes in its reply brief that Accuvant’s allegations create a plausible inference that
the Parties had an implied-in-fact contract. Furthermore, Megadata has not moved to dismiss
Accuvant’s unjust enrichment claim. Therefore, the Court denies Megadata’s Motion to Dismiss
as to Accuvant’s breach of contract claims.
IV.

CONCLUSION
For the foregoing reasons, the Court DENIES Megadata’s Motion to Dismiss. A separate

Order follows. The Court will issue a Scheduling Order.
December 13, 2012
Date

/s/
Alexander Williams, Jr.
United States District Judge

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