Communications Unlimited Contracting Services, Inc. v. COMDATA INC.

Filing 36

MEMORANDUM AND ORDER: Pending before the court is a Motion to Dismiss Counterclaim (Docket No. 34 ), filed by the plaintiff/counter-defendant, Communications Unlimited Contracting Services, Inc. ("CUI"), to which the defendant/counter-pl aintiff, Comdata, Inc. ("Comdata"), has filed a Response (Docket No. 35 ). For the reasons discussed herein, the motion will be denied. CUI's Motion 34 to Dismiss Counterclaim is hereby DENIED. Signed by District Judge Aleta A. Trauger on 5/18/2018. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(mg)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
COMMUNICATIONS UNLIMITED
CONTRACTING SERVICES, INC.,

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Plaintiff/Counter-Defendant,
v.
COMDATA, INC.,
Defendant/Counter-Plaintiff.

Case No. 3:17-cv-01158
Judge Aleta A. Trauger

MEMORANDUM AND ORDER
Pending before the court is a Motion to Dismiss Counterclaim (Docket No. 34), filed by
the plaintiff/counter-defendant, Communications Unlimited Contracting Services, Inc. (“CUI”),
to which the defendant/counter-plaintiff, Comdata, Inc. (“Comdata”), has filed a Response
(Docket No. 35). For the reasons discussed herein, the motion will be denied.
BACKGROUND1
CUI, a telecommunications company, employs technicians who perform cable
installation services. Comdata is a payment processing company. The parties entered into a
contract, pursuant to which Comdata would issue fleet fuel cards with which CUI could prepay
for its technicians’ gas expenses incurred traveling to installations. Comdata would then invoice
CUI on a bi-monthly basis for its services and expenses incurred on the fuel cards. The parties
agreed that CUI, using Comdata’s web-based platform, would set limits on the amounts that
could be spent on each card. (Docket No. 14 ¶ 11–12.) Comdata configured the limits for the
cards to be applied daily. (Id. at ¶ 14.) Within a month, CUI contacted Comdata to protest the
configuration, claiming that the limits were supposed to be applied weekly. (Id.) Comdata

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The facts are viewed in the light most favorable to the counter-plaintiff.
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changed the configuration to weekly limits, but the parties could not reach an agreement on how
to further rectify the dispute. (Id. at ¶ 15.) CUI brought a suit in state court alleging several
causes of action, including breach of contract. (Docket No. 1.) On August 16, 2017, the case
was removed to this court (id.) and, on September 12, 2017, CUI filed an Amended Complaint
(Docket No. 14). On January 29, 2018, Comdata filed an Answer to Amended Complaint and
Counterclaim, seeking declaratory judgment that it did not violate any provisions of the parties’
contract. (Id.) Comdata claims that, if granted such judgment, it is entitled to costs, fees, and
expenses incurred in defending against CUI’s causes of action.2 (Id.) Comdata further seeks
declaratory judgment that, pursuant to the parties’ contract, it is not liable for damages caused by
any negligent conduct of CUI’s employees.3
LEGAL STANDARD
In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court
will “construe the complaint in the light most favorable to the plaintiff, accept its allegations as
true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487
F.3d 471, 476 (6th Cir. 2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). The
Federal Rules of Civil Procedure require only that a plaintiff provide “a short and plain statement
of the claim that will give the defendant fair notice of what the plaintiff’s claim is and the
grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957). The court must

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Comdata cites Section 21(n) of the contract, which states: “In the event that the Account is
turned over to a collection agency or an attorney for collection of unpaid amounts or otherwise to
enforce this Agreement, Customer agrees to pay all costs, fees, and expenses of such agency or
attorney, including, without limitation, court costs and out-of-pocket expenses.” (Docket No. 12 at 4.)
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Comdata cites Section 12 of the contract, which states: “Customer agrees to hold Comdata
harmless from any liability resulting from the acts of any employees or agents of Customer,
which acts shall include but are not limited to negligent acts and willful misconduct of such
persons, or from the breach by Customer of its obligations under this Agreement.” (Docket No.
1-2 at 3.)
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determine only whether “the claimant is entitled to offer evidence to support the claims,” not
whether the plaintiff can ultimately prove the facts alleged. Swierkiewicz v. Sorema N.A., 534
U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).  
The complaint’s allegations, however, “must be enough to raise a right to relief above the
speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To establish the
“facial plausibility” required to “unlock the doors of discovery,” the plaintiff cannot rely on
“legal conclusions” or “[t]hreadbare recitals of the elements of a cause of action,” but, instead,
the plaintiff must plead “factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678–79
(2009). “[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.”
Id. at 679; Twombly, 550 U.S. at 556. According to the Supreme Court, “plausibility” occupies
that wide space between “possibility” and “probability.” Iqbal, 556 U.S. at 678. If a reasonable
court can draw the necessary inference from the factual material stated in the complaint, the
plausibility standard has been satisfied. 
ANALYSIS
CUI argues that Comdata’s counterclaim is redundant and should be dismissed because
the issues raised in the counterclaim will be resolved via CUI’s pending causes of action. The
only legal authority CUI cites in support of its proposition that redundant counterclaims cannot
be brought is Federal Rule of Civil Procedure 13. Rule 13 provides, inter alia, that a party must
bring as a compulsory counterclaim any claim that the pleader has against an opposing party
when certain conditions are met. Fed. R. Civ. P. 13(a)(1)(A). A counterclaim is compulsory if
“the issues of law and fact raised by the claims [and counterclaims] are largely the same” and
would involve “substantially the same evidence.” Sanders v. First Nat’l Bank & Trust Co. in

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Great Bend, 936 F.2d 273, 277 (6th Cir. 1991). “It is well established that an opposing party’s
failure to plead a compulsory counterclaim forever bars that party from raising the claim in
another action.” Id. Rule 13(a)(2) governs exceptions to the compulsory requirements of Rule
13(a)(1):
(2) Exceptions. The pleader need not state the claim if:
(A) when the action was commenced, the claim was the
subject of another pending action;
Fed. R. Civ. P. 13(a)(2).
CUI argues that Comdata’s counterclaim should be dismissed pursuant to Rule
13(a)(2)(A) because Comdata will necessarily be granted the legal relief it seeks, should it
prevail on CUI’s breach of contract claim. CUI explains:
Pursuant to Fed. R. Civ. P. Rule 13(a)(2), compulsory
counterclaim exceptions state that the pleader [Comdata] of a
counterclaim need not state the claim if: (A) when the action was
commenced, the claim was the subject of another pending action.
(Docket No. 34 at 2.) CUI misunderstands the permissive nature of Rule 13(a)(2)(A). That
exception’s function is to categorically exclude certain types of counterclaims from Rule
13(a)(1)’s compulsory requirements. In other words, Rule 13(a)(2) describes what types of
counterclaims may be brought, as opposed to the claims described in Rule 13(a)(1), which must
be brought, lest they be lost forever. The Ninth Circuit has elaborated on the purpose of the
exception set forth in Rule 13(a)(2)(A):
The purpose of this exception is seemingly to prevent one party
from compelling another to try his cause of action in a court not of
the latter’s choosing when the same cause of action is already the
subject of pending litigation in another forum, one which was
probably chosen by the owner of the cause of action concerned.
The language of the exception clause in Rule 13(a)—‘such a claim
need not be so stated (as a counterclaim) if at the time the action
was commenced the claim was the subject of another pending
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action’—seems clearly permissive. The exception enables a party
to escape the waiver rule if he has already begun his action in
another forum of his own choosing. It does not preclude him
from electing instead to counterclaim his cause of action in the
instant case.
Union Paving Co. v. Downer Corp., 276 F.2d 468, 470 (9th Cir. 1960) (emphasis added).
Comdata contends that its counterclaim is in fact compulsory, but the court need not make that
determination. Absent any legal authority endorsing its position, CUI cannot justify dismissal of
Comdata’s counterclaim.
CONCLUSION
For the foregoing reasons, CUI’s Motion to Dismiss Counterclaim is hereby DENIED.
It is so ORDERED.
______________________________
ALETA A. TRAUGER
United States District Judge

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