Maaraba v. Stanley Convergent Security Solutions, Inc.

Filing 20

MEMORANDUM OPINION in re 13 Motion to Dismiss. Signed by District Judge Claude M. Hilton on 03/25/2014. (jlan)

f
IN THE UNITED

FOR THE

MAR 2 5 2014

STATES DISTRICT COURT

EASTERN DISTRICT OF VIRGINIA

CLERK, U.S. DISTRICT COURT
ALEXANDRIA, VIRGINIA

Alexandria Division

TAREK MAARABA,

Plaintiff,
Civil Action No.

v,

l:13-cv-1564

STANLEY CONVERGENT SECURITY

SOLUTIONS,

INC.
Defendant

MEMORANDUM OPINION

This matter comes before the Court on Defendant Stanley
Convergent Solution Inc.'s ("Defendant's" or "Stanley's") Motion
to

Dismiss.

Plaintiff Tarek Maaraba

("Plaintiff" or "Mr. Maaraba")

was

employed by Stanley as an Executive Security Consultant from May
2012 to August 1,

2013. As an employee of Stanley, Mr. Maaraba

initiated contact with TechnoSource,

LLC in order to form a

business relationship between Stanley and TechnoSource. Stanley
and TechnoSource entered into a Teaming Agreement for federal

contracting work on March 19, 2013. Mr. Maaraba's role regarding
the contracts with Stanley and TechnoSource diminished beginning
in April 2013.

By May 2013,

Mr.

Maaraba had been removed from

all contracts with Stanley and TechnoSource and received no
further commissions from these contracts.

Mr. Maaraba was placed

on a Performance Improvement Plan in June of 2013 for failure to
meet his sales quota. Mr. Maaraba's employment with Stanley was

terminated on August 1, 2013.
Based on these facts,

Plaintiff filed a Complaint against

Defendant in the Circuit Court of Fairfax County. The case was
removed to the United States District Court for the Eastern

District of Virginia, Alexandria Division, on December 20, 2013
on the basis of diversity jurisdiction. This Court granted
Defendant's Motion to Dismiss on January 24,

2014 on grounds

that Plaintiff's claim for fraud was not pled with sufficient

particularity under Federal Rule of Civil Procedure 9(b).
Plaintiff was given 14 days to file an amended complaint, which
he did on February 7, 2014.

In his Amended Complaint,

Plaintiff alleges claims for

actual fraud and constructive fraud,

asserting that Plaintiff

was fraudulently induced by Defendant to work to obtain the
Teaming Agreement with TechnoSource and secure the federal
contracting work for the benefit of Defendant.

Plaintiff alleges

that Defendant delayed its decision to terminate his employment
and made certain promises of work and commissions in order to
induce Plaintiff to secure the Teaming Agreement with
TechnoSource.

In order

to survive a

12(b)(6) motion to dismiss,

Federal

Rule of Civil

Procedure

Rule

a complaint must set forth "a claim

for relief that is plausible on its face." Bell Atl.
Twombly,

550 U.S.

544,

547

Corp. v.

(2007). A claim is facially plausible

"when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant

for the misconduct alleged."
1937,

1949 (2009); Twombly,

Ashcroft v. Iqbal, 129 S. Ct.
550 U.S.

offers labels and conclusions or a

at 556.

at 1949; Twombly,

"A pleading that

formulaic recitation of the

elements of a cause of action will not do."
129 S. Ct.

is liable

550 U.S.

at

555.

Ashcroft v. Iqbal,
Further,

"conclusory allegations regarding the legal effect of the facts

alleged" need not be accepted.
921

(4th Cir.

Labram v. Havel, 43 F.3d 918,

1995).

In order to plead his fraud claim,
a false representation;

Plaintiff must plead (1)

(2) of material fact;

intentionally and knowingly;

(3) made

(4) with intent to mislead;

reasonable reliance by the party misled; and (6)
damage to the misled party.
Bershader,

258 Va.

75

(1999).

Prospect Dev. Co.,
Additionally,

(5)

resulting
Inc. v.

Plaintiff "must

state with particularity the circumstances constituting fraud or

mistake."

Fed. R. Civ. P. 9(b).

Plaintiff needs to allege with

particularity, "the time, place, and contents of the false
representations,

as well as the identity of the person making

the misrepresentation and what he obtained thereby." Harrison v.

Westinqhouse Savannah River Co.,

176 F.3d 776,

784

(4th Cir.

1999).

Plaintiff's Complaint fails to plead both the requisite
intent to mislead and reasonable reliance by the party misled
and thus fails to state a plausible claim of action for fraud
under Virginia law.

First,

in regards to the "intent"

requirement, a fraud claim "must relate to a present or pre
existing fact, and cannot ordinarily be predicated on
unfulfilled promises or statements as to future events." Enomoto
v. Space Adventures, Ltd.,

2009)

624 F.Supp.2d 443,

(quoting McMillion v. Dryvit Sys.,

Inc.,

454 (E.D. Va.

262 Va. 463

(2001)); Patrick v. Summers, 235 Va. 452, 454 (1988)
Soble v. Herman,

175 Va.

489,

500 (1940)).

(quoting

"[T]he mere

expression of an opinion, however strong and positive the
language may be,

is not a statement of present fact." Enomoto v.

Space Adventures, Ltd., 624 F.Supp.2d at 454 (quoting Mortarino
v. Consultant Eng'g Servs., Inc., 251 Va. 289 (1996)
Saxby v.

S. Land Co.,

109 Va.

196 (1909))).

(citing

"While

circumstantial evidence may be used to support a reasonable

inference of fraud, mere failure to perform is generally not
evidence of a lack of intent to perform at the time the contract
was formed." Cyberlock Consulting Inc.
876 F.Supp.2d 672,

681 (E.D.

Va.

v. Information Experts,

2012). "The reason for this

rule is that a ^mere promise to perform an act in the future is

not, in a legal sense, a representation,

and a failure to

perform it does not change its character.'" Cyberlock Consulting
Inc. v. Information Experts, 876 F.Supp.2d at 681 (citing
Enomoto v. Space Adventures,
the rule otherwise,

Ltd.,

624 F.Supp.2d at 454). "Were

every breach of contract could be made the

basis of an action in tort for fraud." Enomoto v. Space
Adventures, Ltd.,
Inc.

624 F.Supp.2d at 454

v. Weatherford,

253 Va.

(quoting Blair Const.,

343 (1997)).

Here, Mr. Maaraba bases his claim on an unfulfilled promise
as to future events. Mr. Maaraba maintains that Stanley made
promises of future work on contracts and commissions in order to
induce him to secure the Teaming Agreement with TechnoSource.

Mr. Maaraba has not offered any facts evidencing a lack of

intent to fulfill these employment promises at the time they
were made.

Plaintiff bases his claim on conclusory allegations

of intent not to perform relating to unfulfilled promises of
future events. Thus,

he has failed to satisfy the "intent"

requirement and has failed to state a plausible claim for fraud.
Furthermore,

Plaintiff has failed to plead that his

reliance was reasonable.

"In order to prove reliance,

a

plaintiff must demonstrate that its reliance upon the
representation was reasonable and justified." Hitachi Credit
America Corp.

v. Signet Bank,

166 F.3d 614,

(quoting Meridian Title Ins. Co.

628

v. Lily Homes,

(4th Cir.

Inc.,

735

1999)

F.Supp.

182,

185 (E.D. Va.

1990)). As an "at-will" employee, Mr.

Maaraba's reliance on prospective performance-based commissions

cannot form the basis of reasonable reliance. "In Virginia, an
employment relationship is presumed to be at-will, which means
that the employment term extends for an indefinite period and
may be terminated by the employer or employee for any reason

upon reasonable notice." County of Giles v. Wines,
72 (2001) . As an "at-will" employee,

Maaraba's employment at any time,

262 Va. 68,

Stanley could terminate Mr.

for any reason. Such

termination would preclude Mr. Maaraba's right to recover any

potential commissions on prospective contracts. Thus, Mr.
Maaraba's reliance to be paid commissions for prospective
contracts is unreasonable,

and he has failed to allege

reasonable reliance as is necessary to state a fraud claim under
Virginia law.
For the aforementioned reasons,

this Court finds that

Defendant's Motion to Dismiss should be granted. An appropriate
order shall issue.

M.
Claude M. Hilton

United States District Judge

Alexandria,

Virginia

March %ST , 2014