Court Opinion

ID: 2968616
Source: CourtListenerOpinion
Date Created: 2015-09-22 07:41:12.462695+00
Date Added: 2024-06-11T09:16:59.173319
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 11-1380

CBX TECHNOLOGIES, INCORPORATED,

                Plaintiff - Appellant,

          v.

GCC    TECHNOLOGIES,    LLC,     f/k/a     Government    Contract
Consultants, LP,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.      James K. Bredar, District Judge.
(1:10-cv-02112-JKB)

Submitted:   November 23, 2011            Decided:   December 13, 2011

Before DUNCAN, KEENAN, and DIAZ, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion.

John Christopher Belcher, Oxon Hill, Maryland, for Appellant.
Keith Leon Baker, BARTON, BAKER, THOMAS & TOLLEE, McLean,
Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

            CBX      Technologies,            Inc.      (“CBX”),        a         California

corporation, brought this one-count breach of contract action

against GCC Technologies, LLC (“GCC”), a Maryland corporation,

pursuant to 28 U.S.C. § 1332 (2006).                   The district court granted

GCC’s motion to dismiss for lack of subject matter jurisdiction,

and, alternatively, for failure to state a claim.                       CBX appeals.

            In early 2009, CBX became interested in pursuing a

government        contract    with      the        United    States     Department        of

Education’s Federal Student Aid (“FSA”) program.                         CBX, however,

was not eligible to enter a bid as a primary contractor, so it

sought out an eligible contractor with whom it could jointly

bid, eventually contacting GCC.                    On September 3, 2009, CBX and

GCC entered        into   a   teaming    agreement          pursuant    to    which      they

submitted a bid (the Teaming Agreement).                       CBX alleges that the

Teaming Agreement provided that GCC would provide 51% of the

full-time employees and receive 51% of the contract’s value,

while CBX was to provide 49% of the full-time employees and

receive 49% of its value.               The Teaming Agreement provided that

it was to “automatically expire upon . . . [t]he execution of a

subcontract agreement between GCC and CBX pursuant to a Prime

Contract     by    the    [Department         of    Education]     to       GCC    for   the

Project.”     (J.A. 24).

                                              2
            In late September 2009, GCC was awarded the contract,

which had a value of $2,401,494.40.                       On approximately October 1,

2009,    five     CBX    employees       were       in    place      to     work    on    the    FSA

contract, though it is not clear when work began.

            In     June     2010,    CBX      and        GCC    executed       a     subcontract

agreement with a retroactive effective date of November 9, 2009

(the Subcontract Agreement).               The Subcontract Agreement provides

that it “supersedes all previous written or oral representation

or   agreements         between    GCC    and       [CBX],      if    any,     including        any

[T]eaming       [A]greement,         . . .          and        constitutes          the       entire

agreement    between       GCC     and   [CBX]       with       respect      to     the   subject

matter    hereof.”         (J.A.    53).        The       Subcontract         Agreement         also

specifies    that       CBX’s     employees         working         under    the     subcontract

were to remain under CBX’s direction and control.                                  CBX asserted,

however, that “starting almost immediately after” the parties

began work on the contract, GCC President James Bailey attempted

to supervise the employees in a manner they found offensive,

causing    four     of    the     five    employees            to    quit    by     early     2010.

Bailey also is alleged to have interfered with CBX’s attempts to

replace     the    employees.            After       some       initial       communications,

Bailey sent a letter to CBX on July 15, 2010, terminating the

parties’ agreement.

             CBX    claims        that   it     should         have       received       at    least

$1,176,000 from its work in the FSA contract.                               As of the filing

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of its complaint, however, CBX had been paid less than $200,000.

Accordingly, CBX seeks $976,000 in compensatory damages.                                  CBX’s

specific      allegation        is    that        “GCC     has   . . .      breached          the

[T]eaming [A]greement with CBX as subsequently incorporated into

the written [S]ubcontract [A]greement by” GCC’s interfering with

CBX’s employees’ work and retention, by refusing to allow CBX to

hire    new    employees       to    work     under       the    subcontract,           and    by

terminating the agreement without just cause.                         (J.A. 7).

              GCC    filed     an    answer,       asserting       that    CBX    failed        to

state a claim upon which relief could be granted.                            Subsequently,

GCC moved to dismiss under Fed. R. Civ. P. 12(b)(1) for lack of

subject matter jurisdiction and, alternatively, under Fed. R.

Civ. P. 12(b)(6) for failure to state a claim.

              The    district       court    granted       GCC’s    motion,       dismissing

the    case   with    prejudice.            The    court    observed       that    the        suit

alleged a breach only of the Teaming Agreement, yet the Teaming

and    Subcontract      Agreements          made     it    “beyond        clear    that       the

[T]eaming       [A]greement           was         not      incorporated           into         the

[S]ubcontract         [A]greement.”               (J.A.     63).          Because        “CBX’s

allegations about GCC’s actionable conduct appear to relate to

the    time    after    the     teaming           agreement      expired,”        the    court

concluded      that    the     amount-in-controversy             requirement        was       not

satisfied.      (Id.).       The district court went on to explain that

even    if    the    teaming    agreement          had    been   in    effect      and        been

                                              4
breached by GCC, jurisdiction still would be lacking because the

Teaming Agreement “expresses . . . only an intent that CBX would

receive 49 percent under the contract that the parties hoped

would be awarded in the future,” and as such, the court had no

way to calculate damages.

               The    district      court    also         ruled,    in    the    alternative,

that CBX failed to state a claim.                          In this regard, the court

reiterated that the Teaming Agreement was not in effect at the

time of the alleged breach and that, even if it had been in

effect,    the       Teaming     Agreement           has    no     provision      to    measure

damages.

               We    are    constrained      to          vacate    the    district      court’s

order and remand this action for further proceedings.                                 We begin,

as we must, with subject matter jurisdiction.                             See Steel Co. v.

Citizens       for   a     Better   Env’t,       523       U.S.    83,   94     (1998).       The

relevant principles of the amount-in-controversy requirement, 28

U.S.C. § 1332 (2006), are well settled.                             Generally, “the sum

claimed    by       the    plaintiff   controls”            the    determination        of   the

amount    in    controversy,        and     if       a   plaintiff       seeks    a    sum   that

satisfies the statutory minimum, “a federal court may dismiss

only if it is apparent, to a legal certainty, that the plaintiff

cannot recover the amount claimed.”                        JTH Tax, Inc. v. Frashier,

624 F.3d 635, 638 (4th Cir. 2010) (internal quotation marks and

emphasis omitted).

                                                 5
             Where, as here, a defendant “challenges the existence

of subject matter jurisdiction in fact, the plaintiff bears the

burden of proving the truth of such facts by a preponderance of

the evidence.”            United States ex rel. Vuyyuru v. Jadhav, 555

F.3d 337, 347 (4th Cir. 2009).                    Where “the jurisdictional facts

are so intertwined with the facts upon which the ultimate issues

on the merits must be resolved, the entire factual dispute is

appropriately resolved only by a proceeding on the merits.”                              Id.

at 348 (internal citations and quotation marks omitted).

             Here,        the     jurisdictional        and       merits      facts      are

intertwined because both the jurisdictional and merits inquiries

turn on whether the Teaming Agreement was in effect at the time

of the alleged breach.             As to jurisdiction, whether the Teaming

Agreement was in effect is dispositive because the complaint

alleges breach only of the Teaming, and not the Subcontract,

Agreement.         If the Teaming Agreement was not in effect at the

time   of    the    alleged       breach,     it    would    be   clear       to   a   legal

certainty      that       CBX   did     not   meet     the     amount-in-controversy

requirement.            As to the merits, whether the Teaming Agreement

was    still       in    effect    is    dispositive         because       the     contract

allegedly breached was the Teaming Agreement.                           Cf. Jadhav, 555

F.3d   at    349-50       (concluding     jurisdictional          and   merits      factual

issues      were    not    intertwined        because       elements     of      respective

inquiries differed).            The district court’s reliance on the same

                                              6
reasons to dismiss the action on both jurisdictional and merits

grounds further indicates that the facts relating to the two

issues are intertwined.

            Because      the     jurisdictional             facts      and      the    facts

relating    to   the   merits        of   CBX’s       claim     are    intertwined,      the

district   court   erred       in    basing         dismissal     on   lack     of    subject

matter jurisdiction.           See Adams v. Bain, 697 F.2d 1213, 1220

(4th Cir. 1982).         Rather, the factual dispute -- whether the

Teaming    Agreement     was    in    effect         at   the   time     of    the    alleged

breach -- must be assessed in a proceeding on the merits.                              As to

the merits, GCC argues that, under Rule 12(b)(6), CBX failed to

state a claim on which relief could be granted.                               To survive a

Rule 12(b)(6) motion, CBX’s complaint “must contain sufficient

factual matter, accepted as true, to state a claim to relief

that is plausible on its face.”                     Francis v. Giacomelli, 588 F.3d

186, 193 (4th Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S. Ct.

1937, 1949 (2009)) (emphasis omitted).                          A court may consider

documents a defendant attaches to its Rule 12(b)(6) motion if

the documents “w[ere] integral to and explicitly relied on in

the   complaint    and    if        the    plaintiff[]          do[es]    not    challenge

[their]    authenticity.”                 Am.       Chiropractic       Ass’n    v.     Trigon

Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) (internal

quotation marks and alteration omitted).

                                                7
               In evaluating the Rule 12(b)(6) motion, the district

court     properly          considered        the       copies      of     the       Teaming         and

Subcontract Agreements GCC attached to its motion.                                   However, the

record    does       not    reveal      whether        the    Teaming      Agreement           was    in

effect at the time of the alleged breach.                                GCC was awarded the

FSA    contract       in    late       September        2009,      and    CBX       had    its    five

employees      in     place       on    approximately           October        1,    2009.           CBX

alleges that Bailey began acting in a way the employees found

offensive       “[s]tarting            almost      immediately           after      GCC    and       CBX

started work” on the project; that conduct forms the basis for

the claim of breach.               The Subcontract Agreement did not go into

effect,       and    thereby       terminate           the    Teaming       Agreement,           until

November 9, 2009.             It is not clear from the record exactly when

work     began,       and     when      the     alleged         breach      occurred.                The

dispositive         factual       issues      --    issues      that      were      not    properly

resolved on the face of the pleadings – are (1) whether work

began before the November 9, 2009 retroactive effective date of

the    Subcontract          Agreement,        and      if    so,   (2)     whether         a    breach

occurred      before       November      9,     2009.         Thus,      the     district        court

erred    in    finding       on    the     record       before      it     that      the       Teaming

Agreement was no longer in effect at the time of the alleged

breach, and in finding a lack of jurisdiction on this basis.

               The     district          court’s            alternative          rationale           for

dismissal -- that CBX did not state a claim even if the Teaming

                                                   8
Agreement had been in effect at the time of the alleged breach -

- is also unpersuasive.              First, the district court’s analysis

appears    to    rest    on   its   own     characterization      of    the     Teaming

Agreement as manifesting “only an intent” that CBX would receive

49% of the contract’s value, and as providing “no mechanism for

payment.”        Second,      the   court    does    not     explain    why    CBX   was

obliged to show a precise measure of damages in order to survive

GCC’s Rule 12(b)(6) motion.                 Accordingly, we are not able to

uphold the dismissal on this alternate basis.

            For    the     foregoing        reasons,    we     conclude       that   the

district        court      erred     in         dismissing      CBX’s     complaint.

Accordingly, we vacate the court’s order and remand for further

proceedings consistent with this opinion.                    We dispense with oral

argument because the facts and legal contentions are adequately

presented in the materials before the court and argument would

not aid the decisional process.

                                                              VACATED AND REMANDED

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