Source: http://ks.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180305_0000339.DKS.htm/qx
Timestamp: 2019-04-20 02:37:27+00:00

Document:
PACE ANALYTICAL SERVICES, LLC, Defendant.
Plaintiff Twin Creek Environmental Services, LLC entered into an oral contract with defendant Pace Analytical Services, LLC to perform environmental testing. Plaintiff alleges that defendant made errors during its testing, which caused the Kansas Department of Health and Environment (“KDHE”) to initiate an enforcement action and levy monitoring fees and financial penalties against plaintiff. Plaintiff filed this action in the District Court of Johnson County, Kansas, which defendant subsequently removed to this court. The matter is now before the court on defendant's motion to dismiss for failure to state a claim, pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6) (Dkt. 5). Defendant also contends that plaintiff's claims are barred by the applicable statute of limitations. For the reasons stated below, defendant's motion to dismiss is granted, however, plaintiff is granted leave to amend its complaint.
In June 2014, plaintiff contracted with defendant to perform testing on various samples collected from plaintiff's property. Defendant was to determine whether plaintiff's samples contained harmful chemicals, and if so, the quantities of the harmful chemicals.
On or about June 21, 2014, plaintiff provided the samples to defendant. Defendant performed laboratory analytical testing and determined that plaintiff's samples tested positive for acetone in amounts greater than allowed. Defendant reported its findings to plaintiff, who in turn asked defendant to re-test the samples for the presence of acetone and methylene chloride. Upon re-test, defendant discovered that laboratory contaminants from its facilities resulted in false positives or results showing a higher concentration of certain hazardous chemicals than initially reported. Defendant notified plaintiff of the erroneous test results by letter dated August 5, 2014. Defendant's letter reported that the presence of methylene chloride was accurate in three samples, but the other results showing the presence of methylene chloride were false. The presence of acetone could not be explained.
Defendant did not request payment from plaintiff for the testing; nor did it communicate further with plaintiff. However, defendant-without plaintiff's permission or knowledge-forwarded the first batch of test results to KDHE. Plaintiff alleges that KDHE used these flawed tests to prosecute plaintiff. Plaintiff alleges that defendant changed its position, and informed KDHE that the original results were correct to gain business from the State of Kansas.
Defendant's actions, plaintiff alleges, were beyond the scope of their agreement and its representations were fraudulent. Plaintiff asserts that it relied on defendant's misrepresentations to its detriment, and seeks relief for breach of contract, violation of defendant's duty of good faith and fair dealing, and fraud.
“To survive a motion to dismiss, a complaint must contain ‘enough facts to state a claim to relief that is plausible on its face.'” The Estate of Lockett by & through Lockett v. Fallin, 841 F.3d 1098, 1106-07 (10th Cir. 2016), cert. denied sub nom. Lockett v. Fallin, 137 S.Ct. 2298 (2017) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible if it pleads 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 (2009). In reviewing a motion to dismiss, the court must accept as true all well-pleaded allegations and view those allegations in the light most favorable to the non-moving party. See Dias v. City & Cty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009).
The plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Iqbal, 556 U.S. at 678. Mere “labels and conclusions” and “a formulaic recitation of the elements of a cause of action” are insufficient. Twombly, 550 U.S. at 555. Moreover, “[t]he tenet that a court must accept as true all of the allegations contained a complaint is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678.
With respect to fraud, plaintiff must plead its claim with particularity. Fed.R.Civ.P. 9(b) (the rule requires a party when “alleging fraud or mistake [to] state with particularity the circumstances constituting fraud or mistake”). The rule's purpose “is ‘to ensure that the complaint provides the minimum degree of detail necessary to begin a competent defense.'” Fulghum v. Embarq Corp., 785 F.3d 395, 416 (10th Cir. 2015) (quoting McCarthy v. Ameritech Pub., Inc., 763 F.3d 469, 478 n.2 (6th Cir. 2014)).

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