Discovery Communications, LLC v. Computer Sciences Corporation

Filing 13

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 7/8/13. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
DISCOVERY COMMUNICATIONS, LLC
:
v.

:

Civil Action No. DKC 12-2894

:
COMPUTER SCIENCES CORPORATION
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this tortious
interference with a contract case is a motion to dismiss filed
by Defendant Computer Science Corporation (“CSC”).

(ECF No. 5).

The issues are fully briefed and the court now rules pursuant to
Local Rule 105.6, no hearing being deemed necessary.

For the

reasons that follow, Defendant’s motion will be granted.
I.

Background
A. Factual Background
The following facts are taken from the complaint (ECF No.

1) and are construed in the light most favorable to Plaintiff
Discovery
party.

Communications,
Discovery

LLC

entered

into

(“Discovery”),
an

the

employment

Thomas R. Colan (“Mr. Colan”) on February 8, 2008.
6).

In

this

“Discovery’s
Officer.”

agreement,

Executive

(Id.).

Vice

Mr.

Colan

President

agreed
[and]

non-moving

contract

with

(ECF No. 1 ¶
to

Chief

serve

as

Accounting

The contract “called for a term of employment

beginning on March 17, 2008 and ending on March 16, 2011.”
¶ 7).

(Id.

Subsequently, Discovery and Mr. Colan entered into two

amendments to the original employment contract.

(Id. ¶ 6).

The

second amendment to the employment contract, entered into on
January

20,

2011,

“extended

the

conclusion

of

the

employment from March 16, 2011 to March 16, 2013.”
7).

term

of

(Id. ¶¶ 6,

The amended employment contract also specified that early

termination by Mr. Colan would constitute a material breach.
(Id. ¶ 11).1
On August 17, 2012, Mr. Colan resigned from Discovery by
way of email.

(ECF No. 1-1).

The email indicated that he

accepted a job offer from another company.

(Id.).

Mr. Colan’s

resignation stated that August 30, 2012, would be his final day
with Discovery.
On

August

executives,
contract

and

(Id.).
21,

each
that

2012,

of

whom

Mr.

Colan

told

Discovery

met

with

him

that

he

would

1

not

release

two

Discovery

remained
him

under

from

the

The employment contract allowed Mr. Colan to terminate
his employment for “Good Reason” which was limited to:
(1) a
material breach of the contract by Discovery; (2) a material
reduction in Mr. Colan’s title, duties, and compensation; (3) a
material change in the location of employment; or (4) a failure
by
Discovery to provide Mr. Colan the agreed upon units of
stock. (ECF No. 1-1, at 6).
2

employment contract.

(ECF No. 1 ¶ 14).

Two days after meeting

with Discovery leadership, Mr. Colan notified Discovery that he
intended to breach his contract and accept employment elsewhere.
(Id. ¶ 15).
Discovery learned that Defendant CSC intended to employ Mr.
Colan through a Form 8-K filed by CSC with the United States
Securities and Exchange Commission on August 23, 2012.
16).

(Id. ¶

The following day, August 24, 2012, Discovery told CSC of

Mr. Colan’s employment contract and his continuing obligations
under that contract.

(Id. ¶ 17).

That same day, Discovery sent

a letter informing CSC that Mr. Colan was “currently a party to
an Employment Agreement with Discovery, with a term that does
not expire until March 16, 2013” and that “Discovery has not
authorized Mr. Colan to provide services to any third party.”
(Id. ¶ 18) (quoting ECF No. 1-1).

CSC did not respond.

(Id. ¶

19).
On August 27, 2012, Discovery sent another letter to both
Mr. Colan and CSC, reiterating that the employment contract did
not

terminate

until

March

16,

resignation was not accepted.
stated

that

Mr.

Colan’s

2013

and

(Id. ¶ 20).

August

2012

Mr.

Colan’s

The letter also
resignation

date

constituted a material breach of the employment contract.

(ECF

3

30,

that

No. 1-1).

In the same letter, Discovery provided Mr. Colan with

“written notice of [Mr. Colan’s] opportunity to cure the breach
that [Mr. Colan’s] resignation . . . would cause” and provided
him a 10 day cure period.
letter.

(Id.).

(ECF No. 1 ¶ 21).

August 31, 2012.

CSC did not respond to the

Mr. Colan began work at CSC on

(Id. ¶ 22).

B. Procedural Background
On

September

28,

2012,

Discovery

filed

a

complaint

containing a single claim against CSC for tortious interference
with the employment contract between itself and Mr. Colan.
No. 1).

(ECF

On October 29, 2012, CSC filed a motion to dismiss for

failure to state a claim upon which relief can be granted under
Federal
Discovery

Rule
has

of

Civil

opposed

Procedure

this

motion

12(b)(6).
(ECF

No.

(ECF
8),

and

No.

5).

CSC

has

replied (ECF No. 9).
II.

Standard of Review
In considering a motion to dismiss under Rule 12(b)(6), a

court

“‘must

accept

as

true

all

of

the

factual

allegations

contained in the complaint,’” and must “‘draw all reasonable
inferences [from those facts] in favor of the plaintiff.’”

E.I.

du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435,
440 (4th Cir. 2011) (quoting Erickson v. Pardus, 551 U.S. 89, 94
4

(2007); Nemet Chevrolet, Ltd. v. Consumerafairs.com, Inc., 591
F.3d 250, 253 (4th Cir. 2009)).
A complaint must set forth “enough factual matter (taken as
true) to suggest” a cognizable cause of action, “even if . . .
[the]

actual

recovery

is

proof
very

of

those

remote

facts

and

is

unlikely.”

Twombly, 550 U.S. 544, 555–56 (2007).
no

more

recitation

than
of

“labels
the

and

improbable
Bell

of

a

Atl.

.

Corp.

.

.
v.

A complaint that provides

conclusions,”

elements

and

cause

insufficient under the Rule. Id. at 555.

or
of

“a

formulaic

action,”

is

So, if the “well-

pleaded facts do not permit the court to infer more than the
mere possibility of misconduct,” the complaint has not shown
that “‘the pleader is entitled to relief.’”

Ashcroft v. Iqbal,

556 U.S. 662, 679 (2009) (citation omitted).
A

motion

pursuant

to

Rule

12(b)(6)

“does

not

resolve

contests surrounding the facts, the merits of a claim, or the
applicability of defenses.”

Edwards v. City of Goldsboro, 178

F.3d 231, 243 (4th Cir. 1999) (internal quotation marks omitted).
Moreover, in resolving a Rule 12(b)(6) motion, the court is not
required to accept legal conclusions drawn from the facts.

See

Papasan v. Allain, 478 U.S. 265, 286 (1986); Monroe v. City of

5

Charlottesville, Va., 579 F.3d 380, 385–86 (4th Cir. 2009), cert.
denied, 559 U.S. 992 (2010).
III. Analysis
In order to state a claim for tortious interference with a
contract under Maryland law, Discovery must sufficiently allege
the

following

elements:

(1)

a

contract

existed

between

Discovery and Mr. Colan; (2) CSC had knowledge of that contract;
(3) CSC intentionally interfered with that contract; (4) Mr.
Colan breached that contract; and (5) Discovery suffered damages
as a result of Mr. Colan’s breach.

See Sensormatic Sec. Corp.

v. Sensormatic Elecs. Corp., 249 F.Supp.2d 703, 710 (D.Md. 2003)
(citing

Fowler

v.

Printers

II,

Inc.,

89

Md.App.

448,

466

(1991)).
In
contract

Maryland,
largely

the

law

follows

for

the

tortious

Restatement

interference
(Second)

of

with

a

Torts.

Daugherty v. Kessler, 264 Md. 281, 287-88 (1972) (demonstrating
that Maryland has adopted Restatement (Second) of Torts § 766);
Stannard v. McCool, 198 Md. 609, 617-18 (1951) (same); see also
Sensormatic

Sec.

Corp.

v.

Sensormatic

Elecs.

Corp.,

455

F.Supp.2d 399, 426-27 (D.Md. 2006) (emphasizing the Restatement
(Second) of Torts § 766 requirement that the defendant have

6

knowledge

that

it

is

interfering

with

the

performance

of

a

contract).
Section 766 of the Restatement provides that to establish
the second element of a tortious interference claim, “the actor
must have knowledge of the contract with which he is interfering
and of the fact that he is interfering with the performance of
the contract.”
Maryland,

for

Restatement (Second) of Torts § 766 cmt. i.
a

party

to

know

it

is

interfering

with

In
the

performance of a contract, the actor must have knowledge of the
contractual duty with which he is interfering.

Md. Jockey Club

v. ODS Techs., L.P., No. WMN-03-2124, 2005 WL 1200181, at *10
(D.Md. May 20, 2005) (citing Stannard v. McCool, 198 Md. at 618)
(also noting that to be liable for tortious interference with a
contract

“the

actor

must

have

knowledge

of

the

business

expectation with which he is interfering . . . But it is not
necessary that the actor appreciate the legal significance of
the facts which give rise to the contractual duty. If he knows
those

facts,

he

is

subject

to

liability

even

though

he

is

mistaken as to their legal significance and believes that there
is no contract or that the contract means something other than
what it is judicially held to mean.”); see also N. Shipping
Funds I, L.L.C. v. Icon Capital Corp., No. 12-3584, 2013 WL
7

1500333,

at

*3-4

(S.D.N.Y.

Apr.

12,

2013)

law)2

(N.Y.

(the

“defendant need not be aware of all the details of a contract,
[but] must have actual knowledge of the specific contract.”)
(citation

omitted);

F.Supp.2d

778,

Medtech

796-97

Prods.

(S.D.N.Y.

Inc.

2008)

v.

Ranir,

(N.Y.

law)

LLC,

596

(dismissing

tortious interference claim because complaint failed to allege
defendants
contract

were

aware

imposed

which

of

limitations

created

the

that

third

the
party’s

employment
breach);

Leadsinger, Inc. v. Cole, No. 05-5606, 2006 WL 2320544, at *12
(S.D.N.Y. Aug. 10, 2006) (N.Y. law) (tortious interference claim
dismissed

for

failure

to

allege

defendant’s

knowledge

of

relevant terms at the time of purported interference); Granite
Partners, L.P. v. Bear, Stearns & Co., 58 F.Supp.2d 228, 267
n.21 (S.D.N.Y. 1999) (N.Y. law) (dismissing

claim of tortious

interference with a contract for failure to allege defendant’s
knowledge of the specific contract provision that third party
breached); Pitcock v. Kasowitz, Benson, Torres & Friedman, LLP,

2

Like Maryland, New York courts have relied upon the
Restatement (Second) of Torts § 766 when deciding claims of
tortious interference with a contract. See, e.g., White Plains
Coat & Apron Co., Inc. v. Cintas Corp., 8 N.Y.3d 422 (2007);
Guard-Life Corp. v. Parker Hardware Mfg. Corp., 50 N.Y.2d 183
(1980); V. Marangi Carting Corp. v. Judex Enters., Inc., 655
N.Y.S.2d 832 (N.Y.Sup.Ct. 1997).
8

915 N.Y.S.2d 239, 241 (N.Y.App.Div. 2011) (N.Y. law) (finding
plaintiff failed to state a claim for tortious interference with
contract because it did not allege, in even conclusory language,
the specific provisions of the contract that created liability).
Under Maryland law, a defendant cannot tortiously interfere
with

an

at-will

employment

contract.

A

party

that

“intentionally causes a third person not to continue an existing
contract terminable at will does not improperly interfere with
the contractual relation.”

Macklin v. Robert Logan Assocs., 334

Md. 287, 304-05 (1994); see also Restatement (Second) of Torts §
766 cmt. g. (providing that any interference with a contract
terminable at will cannot be improper); Fowler v. Printers II,
Inc., 89 Md.App. 448, 468 (1991) (“[I]f a contract is terminable
at will . . . a competitor who induces breach of it . . . does
not interfere improperly.”).
Conversely,

“where

there

is

an

existing

contract,

not

terminable at will, between a plaintiff and a third party, acts
by a defendant to induce the third party to breach that contract
are . . .
The

improper and wrongful.”
complaint

does

not

Macklin, 334 Md. at 304.

explicitly

specify

when

CSC

committed the tort or its state of knowledge at a particular
time.

While Discovery conclusorily alleges that CSC “was and is
9

aware of the existence of the Employment Agreement,” the only
facts alleged are that Discovery verbally notified CSC’s vice
president on August 24, 2012 and sent a letter to that effect on
the same day.

The alleged interference is the inducement of Mr.

Colan to breach the agreement “by employing Mr. Colan.”
In

its

opposition

to

the

motion

to

dismiss,

Discovery

posits somewhat conflicting views of its allegations, suggesting
that CSC interfered with Mr. Colan’s employment contract when it
first

offered

him

employed him.

a

job

and

again

later

when

it

actually

CSC responds that the complaint has failed to

allege sufficiently that CSC had knowledge of the employment
contract between Mr. Colan and Discovery when it extended an
offer of employment to Mr. Colan sometime before August 17 and
that there is no allegation in the complaint that Discovery
notified

CSC

of

the

contract

prior

detailing the employment contract.

to

the

August

24

letter

With regard to the later

date, CSC argues that there was no contract in existence by the
time it employed Mr. Colan on August 31, 2012.
First of all, Discovery’s allegation that “CSC was and is
aware

of

sufficient

the
to

existence”
establish

of
the

the

employment

knowledge

10

contract

element.

Nor

is

not

is

its

contention that “the extent of [the defendant’s] knowledge . . .
[is] a matter[] of evidence, not pleading” availing.
Nowhere does the complaint allege that before August 17,
CSC was aware that Mr. Colan’s employment contract was a term of
years

contract

and

not

an

at-will

employment

contract.

To

survive a motion to dismiss, Discovery must have alleged that
CSC knew of the contract at the time of interference and that
the contract was not at will.

See Pitcock, 915 N.Y.S.2d at 241

(concluding that plaintiff “has not alleged, in nonconclusory
language,

the

including

the

essential
specific

terms

of

provisions

the
upon

parties’
which

contract,

liability

is

predicated”).
In opposition to this motion, Discovery cites Sensormatic
Security

Corporation

v.

Sensormatic

Electronics

Corporation

which notes that in the context of the knowledge element of a
tortious interference with contract claim in that case, “the
extent

of

[the

defendant’s]

knowledge

and

proof

of

wrongful

intent are matters of evidence, not pleading,” and “[a]t the
pleading stage, a plaintiff’s burden is merely to allege facts,
not to allege evidence.”
at

710.

Sensormatic

Decided

in

decision

Sensormatic Sec. Corp., 249 F.Supp.2d

2003,
is

of

prior
limited
11

to

Twombly

relevance.

and

Iqbal,

the

Moreover,

in

Sensormatic, the material before the court included a provision
in

the

allegedly

application

interfering

because

of

party’s

the

contract

potential

limiting

existence

of

its
other

contracts, thus implying knowledge of the existence of those
contracts.

Sensormatic

Sec.

Corp.,

249

F.Supp.2d

at

709

(“Wallace asserts that its license agreement with Sensormatic
limits its nationwide distribution rights to the extent those
rights

conflict

parties.”).

As

with

previously

noted

above,

granted

Discovery’s

rights
far

of

more

third
general

allegations of CSC’s knowledge of the contract are inadequate to
state a claim of tortious interference with a contract.

Because

Discovery’s claim is predicated on Mr. Colan’s breach of the
term of years provisions of the employment contract, rather than
the breach of an at-will employment contract, Discovery must
allege

that

CSC

had

knowledge

of

these

specific

provisions.

Discovery has made no such factual allegation, and has failed to
set forth facts that plausibly suggest that CSC knew before
August 24 of the provisions that they purportedly caused Mr.
Colan to breach.

See Architects Collective v. Gardner Tanenbaum

Grp., L.L.C., No. 08-1354, 2010 WL 2721401, at *3 (W.D.Okla.
July 6, 2010) (applying Restatement (Second) of Torts § 766 and
dismissing tortious interference with a contract claim because
12

allegation that defendant “knew . . . of the existence of [third
party’s] contract with [p]laintiff” was insufficient to support
tortious interference claim).
Discovery cannot save the complaint by arguing the alleged
interference was CSC’s act of employing Mr. Colan on August 31,
because this date is after his employment with Discovery ended.
The complaint alleges that a valid employment contract existed
between

it

and

Mr.

Colan

until

August

30,

when

Mr.

Colan

terminated the contract, and that Discovery advised him in a
letter dated August 27, 2012, that he had 10 days to cure his
breach.

Discovery argues that the issuance of a ten day cure

period unilaterally extended the period of employment beyond the
August 30, 2012 termination date.

(ECF No. 8, at 6).

CSC

argues that “Discovery simply did not have the right to use the
cure period to prevent Mr. Colan from electing to resign from
Discovery.”

(ECF No. 9, at 6).

It is true that there is a general rule that “once a cure
period has been granted, a contract may not be terminated until
that period has expired.”

Bell BCI Co. v. HRGM Corp., No. JFM-

03-1357, 2004 WL 3222885, at *5 (D.Md. Aug. 6, 2004) (citations
omitted).
of

a

The exception to the general rule is that termination

contract

prior

to

the

end
13

of

a

cure

period

may

be

appropriate when a party provides no assurance of performance
and takes no action towards effectuating a cure.
circumstances there are not analogous.

Id.

The

Under the general rule,

the party extending the opportunity to cure to the other party
may not thereafter terminate the contract until the cure period
expires.

Here, the opposite happened. The party now claiming

there was a breach is claiming that the other party could not
terminate the contract before the expiration of the offered, but
unaccepted, cure period.
Had Mr. Colan made an effort to cure his breach during the
cure

period,

contract.
Discovery

the

parties

might

have

remained

bound

by

the

But because he made no such effort, the cure that
offered

contract.

had

no

effect

on

the

termination

of

the

Accordingly, CSC’s employment of Mr. Colan on August

31 cannot constitute interference with the contract because no
contract existed between Discovery and Mr. Colan on that date.
IV.

Conclusion
Because Discovery has not sufficiently alleged either that

CSC knew of the nature of Mr. Colan’s employment contract with
Discovery before August 24, or that the contract extended beyond
August

30,

dismissed.

its

claim

for

tortious

interference

must

be

Discovery has not sought leave to amend, and nothing
14

in

the

papers

deficiencies.

indicates

that

it

could

cure

the

pleading

A separate Order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

15