Court Opinion

ID: 2720135
Source: CourtListenerOpinion
Date Created: 2014-08-22 12:00:38.399169+00
Date Added: 2024-06-11T09:15:58.086399
License: Public Domain

UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA

SABRE INTERNATIONAL SECURITY,

                 Plaintiff,

          v.                                        Civil Action No. 11-806 {GK)

TORRES ADVANCED ENTERPRISE
SOLUTIONS, LLC, et al.,

                 Defendants.

                                   MEMORANDUM ORDER

          Individual    Defendants Jerry Torres,            Scott Torres,     Rebekah

Dyer,          and    Kathryn     Jones         (collectively,     the   "Individual

Defendants"),          have     filed     two    Motions    for    Judgment   on    the

Pleadings pursuant to Rule 12(c)                  of the Federal Rules of Civil

Procedure        [Dkt. Nos. 363 & 366].             On July 17, 2015, Sabre filed

a   single       omnibus   Opposition       [Dkt.    No.   368],   and on July      28,

2014,      the Individual Defendants filed their Replies                  [Dkt.    Nos.

369   &    370] . 1

          The Motions shall be granted in part and denied in part for

the following reasons.

1
  Jerry Torres filed a Motion ("Jerry Torres Mot.") [Dkt. No.
363], and Rebekah Dyer, Kathryn Jones, and Scott Torres jointly
filed an almost identical Motion ("Jt. Mot.") [Dkt. No. 366].
Because the Motions make exactly the same arguments, often word
for word, the Court shall cite only to Jerry Torres' Motion.
         1.         The factual and procedural background in this case has

been      set        forth      in    great        detail     in     the        Court's    Memorandum

Opinions of January 30,                     2014     [Dkt.    No.    288]       and June 16,        2014

[Dkt .        No.    3 59] .         See    generally        Sabre     Int'l       Sec.    v.     Torres

Advanced            Enter.      Solutions,         LLC,      No.    11-806,        2014    WL     341071

(D.D.C. Jan.           30,      2014)      ("Sabre III"),          appeal dismissed, No. 14-

7026, 2014 WL 1378771 (D.C. Cir. Apr. 3, 2014); Sabre Int'l Sec.

v.    Torres Advanced Enter.                  Solutions,           LLC,    No.     11-806,      2014 WL

3859164         (D.D.C.        June 16,      2014)     ("Sabre IV").              Familiarity with

these prior decisions is assumed.

         2.         Sabre      International         Security          ("Sabre")      is     an    Iraqi

private security company.                     Torres Advanced Enterprise Solutions,

LLC ("Torres")              is an American private security company, of which

the      Individual            Defendants       are        current        and     former     officers.

Between         2007     and     2010,       Sabre     and     Torres       partnered        as    prime

contractor and subcontractor to perform security contracts for

the United States Government at military installations in Iraq.

         3.         On April      29,      2011,     Sabre     filed       this    lawsuit against

Torres        for breach of contract                  and related torts.                   In October

2013,     Sabre obtained permission to file,                              and did file,         a First

Amended Complaint                ( "FAC")     [Dkt. No.       242] .       The FAC included all

                                                     -2-
of the claims alleged in the original Complaint                              (Counts 1-14) 2

and     seven       new     claims       against          Torres    and    the    Individual

Defendants          for     fraud,       misappropriation,           and    conversion      of

property (Counts 15-21) .

        4.      Torres then filed a Motion Pursuant to Fed. R. Civ. P.

12 (b) (6)     to Dismiss Counts 15-18 and 20-22 of the FAC [Dkt. No.

253]. 3       On January 3 0,         2 014,      the Court partially granted that

Motion        and   dismissed      all    of      the     FAC' s   newly   asserted   Counts

other        than   Count    18,     which     it    concluded       adequately    stated    a

claim for conversion of property.                       See generally Sabre III, 2014

WL 341071, at *3-9 (D.D.C. Jan. 30, 2014).

        5.      Relying      on    many      of     the     same    arguments     underlying

Torres'       Motion to Dismiss,             the    Individual Defendants now seek

Judgment on the Pleadings as to Counts 15-20 of the FAC. 4

2
  Some of these Counts were dismissed by the Court's Memorandum
Opinion of October 27, 2011 [Dkt. No. 39] . See generally Sabre
Int '1 Sec. v. Torres Advanced Enter. Solutions, Inc., 820 F.
Supp. 2d 62 (D.D.C. 2011) ("Sabre I").
3
   Sabre's Motion to Amend its Complaint attached a Proposed FAC
that included Counts 15-22 [Dkt. No. 197-1].     When the Court
granted that Motion, Sabre withdrew the previously proposed
Count 21 and renumbered its counts so that the actual FAC
included only Counts 15-21 [Dkt. No. 242]       Torres, however,
based its Motion to Dismiss on the 22-Count Proposed FAC, rather
than the actual FAC.
4
  Like Torres, the Individual Defendants also appear to have
based their Motion on the 22-Count Proposed FAC rather than the
actual FAC.   As a result, their Motions request judgment on
                                               -3-
        6.      The standard governing a                           motion for              judgment on the

pleadings under Fed.                    R.     Civ.    P.    12 (c)       "is essentially the same

as    the     standard           for    a     motion to            dismiss      brought           pursuant    to

Federal        Rule        of     Civil        Procedure           12(b) (6) "              Longwood      Vill.

Rest.,        Ltd.     v.       Ashcroft,        157        F.     Supp.       2d    61,     66-67       (D.D.C.

2001).          To     survive          the     motion,           the     "complaint          must      contain

sufficient factual matter,                        accepted as true,                   to    'state a claim

to relief that is plausible on its face.'"                                           Ashcroft v.         Iqbal,

556 U.S.        662,        678       (2009)     (quoting Bell Atl.                   Corp.       v.   Twombly,

550   u.s. 544 (2007)).                       A claim is facially plausible when the

pleaded factual content "allows the court to draw the reasonable

inference           that        the     defendant           is     liable           for    the     misconduct

alleged."           Id. at 678.

        7.      In      Count           15,      Sabre           claims        that        the     Individual

Defendants fraudulently concealed their intent not to pay Sabre

in accordance with previously agreed-upon pricing schemes.                                                    In

Sabre        III,    the        Court        concluded           that    this       Count     is       "entirely

intertwined           [with],           if     not    wholly            duplicative          of[,]      Sabre's

claim that           [Torres]         breached the Teaming Agreement." Id. at *3.

Consequently,              the     Court        held        that        this    claim        is    barred     by

District        of    Columbia           case     law holding that- "even a                            'willful,

Counts 15-21 of the Proposed FAC but only Counts 15-20 of the
actual FAC.
                                                       -4-
wanton or malicious' breach of a contract .                                 cannot support a

claim       of    fraud"    because     "disputes          relating          to     contractual

obligations 'should generally be addressed within the principles

of law relating to contracts[.]'"                   Id. at *3         (citing Choharis v.

State Farm and Casualty Co.,                961 A.2d 1080,            1089        (D.C.    2008)).

This    holding         applies    equally     to    the    Individual             Defendants. 5

Therefore, the Motions shall therefore be granted on Count 15.

       8.        In Count 16, Sabre asserts a claim for fraud based on

representations           Torres    allegedly        made    to       the     Government          in

October 2010 as to whether Sabre had been paid.                                  In Sabre III,

the Court held that               Sabre relied only on its own assumptions

regarding        what    Torres     could    do     or   say,     not       on     what     Torres

actually did or said, and therefore, that Count 16 did not state

a claim for fraud. Id. at *4-5.                   This holding applies equally to

the    Individual        Defendants.         Therefore,         the     Motions           shall   be

granted on Count 16.

5
  Sabre argues, as it did in its Opposition to Torres' Motion,
that it has asserted a claim for fraudulent inducement, as to
which Choharis does not apply.    See Pl.'s Opp'n at 6-19.   The
Court already rejected this argument in Sabre III, however, and
that ruling is "law of the case."    See, e.g., Coal. for Common
Sense in Gov't Procurement v. United States, 707 F.3d 311, 318
(D.C. Cir. 2013)    (explaining that under the law-of-the-case
doctrine, "the same issue presented a second time in the same
case in the same court should lead to the same result" (citing
LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996)).
                                             -5-
        9.     In    Count      17,       Sabre    claims      that    Torres        fraudulently

misappropriated its Private Security Company ("PSC")                                  license and

engaged in unfair competition by bidding on certain contracts

without informing Sabre.                   In Sabre III, the Court held that this

Count      failed     to    state     a    claim of       fraud,      misappropriation,          or

unfair competition, id. at *6, a holding that applies equally to

the   Individual           Defendants.            Therefore,        the     Motions     shall    be

granted on Count 17.

        10.    In     Count     18,       Sabre     claims      that        Torres     unlawfully

converted its PSC license and certain life support equipment it

owned at one of the Team's sites in Iraq.                                   In Sabre III,       the

Court held that Sabre failed to state a claim for conversion of

the PSC license but did state a claim for conversion of the life

support       equipment.         Sabre       III,       2014   WL     341071,    at    *7.      The

Court's       holding      as   to    conversion of            the     PSC    license     applies

equally       to    the     Individual        Defendants,           which     Sabre     does    not

contest.

      As      to    the    conversion of            equipment       claim,      the    Individual

Defendants         argue     that     they    are       entitled       to    judgment     on    the

pleadings because Sabre alleges only that Torres sold the life

support equipment and retained the proceeds,                                not that they did

so in their personal capacities.                        Jerry Torres Mot. at 21.                The

law in the District of                    Columbia is well-established,                  however,
                                                  -6-
that       u[c]orporate          officers          'are        personally         liable       for     torts

which they commit,               participate in,                or inspire,            even though the

acts are performed in the name of the corporation.'"                                             Lawlor v.

Dist.       of    Columbia,          758    A.2d       964,        974-75    (D.C.       2000)        (citing

Vuitch v.          Furr,       482    A.2d    811,        821       (D.C.    1984)).            urn other

words,      corporate officers                           cannot avoid personal liability

for     wrongs         committed        [by   the       corporation]                           with     their

knowledge         and with           their    consent          or approval [.]"            Vuitch,        482

A.2d       at    821     (internal         quotations           omitted).              Liability       must,

however,          ube    premised          upon    a     corporate          officer•s          meaningful

participation in the wrongful acts."                               Lawlor, 758 A.2d at 977.

        Sabre has alleged that that uJerry Torres, Rebekah Dyer and

Kathryn Jones                         willfully and maliciously authorized and

implemented the sale of [its] property at JSS Shield [one of the

Team's          security       sites]                     [while]       fully          aware     that     the

property and proceeds belonged to Sabre."                                   FAC    ~    469.      The high

level positions of these individuals,                                as well as their alleged

close      involvement          in     the    events          at    issue,    raise        a     plausible

inference that they umeaningful[ly]                             participat[ed]" in the sale

of     Sabre's          life    support       equipment              with    knowledge            that     it

belonged to Sabre.               Lawlor, 758 A.2d at 977.                      This is sufficient

to survive a motion under Rule 12(c) because the precise extent

of    an    officer's          uparticipation             in    and    responsibility             for     the
                                                    -7-
alleged       [conversion is]       a quintessential question of fact that

    [can]not be answered at the pleading stage."                     Luna v. A.E. Eng'g

Servs.,       LLC,    938 A.2d 744,         748    (D.C.   2007)       Thus,    Sabre has

adequately alleged that Jerry Torres, Dyer, and Jones are liable

in     their     individual        capacities        for    Torres'     conversion         of

equipment. 6

        Sabre has not,           however,     alleged any basis          to hold Scott

Torres liable for conversion of property.                          Furthermore,       in its

Opposition brief, it argues only that "the Individual Defendants

    (other than Scott Torres)" participated in Torres' conversion of

property.        Pl.'s Opp'n at 21           (emphasis added).          Therefore,         the

conversion claim against Scott Torres shall be dismissed.

        For    the     foregoing    reasons,        the    Motions    shall     be    denied

insofar as Sabre seeks to hold Jerry Torres,                         Rebekah Dyer,         and

Kathryn       Jones     liable     for   conversion        of   equipment       and    shall

otherwise be granted.

        11.    In Count 19,        Sabre alleges again that the Individual

Defendants       are    liable     for   fraud,     unauthorized use           of    its   PSC

license,       and conversion of property.                 These are precisely the

6
   Sabre has also alleged that Jerry Torres, Dyer, and Jones
"aided and abetted" Torres' conversion of equipment.        Pl.'s
Opp'n at 20-22.    The Court need not reach the sufficiency of
such allegations given its conclusion that Sabre has adequately
alleged a claim of direct liability against these Defendants.
                                             -8-
same allegations asserted in Counts 15-18 and,                                 therefore,           they

shall be dismissed as duplicative.

     Count 19 also asserts a claim for unjust enrichment.                                         Under

District of Columbia law,                  the elements of a                  claim for unjust

enrichment    are:       (1)       the plaintiff           conferred a         benefit           on the

defendant;     (2)    the defendant retains the benefit; and (3) under

the circumstances,             the defendant's retention of the benefit is

unjust."     News World Commc'ns, Inc. v. Thompsen, 878 A.2d 1218,

1222 (D.C. 2005).

     Sabre claims that the Individual Defendants were unjustly

enriched     by:      ( 1)     their      alleged      misrepresentations                   to     Sabre

regarding payment            and prices;         (2)       Torres'       use   of    Sabre's         PSC

license;      (3)     Torres'          alleged         misrepresentations                   to       the

Government      regarding            payments         to        Sabre;     and       ( 4)        Torres'

conversion of property.                   See FAC          ~~    467-70.       Sabre has            not,

however,    alleged that,            as a    result of these circumstances,                           it

conferred     any     benefit        on   the    Individual           Defendants            directly.

Instead,    it alleges that it conferred a benefit on Torres,                                        who

subsequently         paid      salaries         and    bonuses           to    the       Individual

Defendants.          Not       a    single      factual          allegation         in      the     FAC,

however,     connects          the     Individual               Defendants'      salaries            and

bonuses to Torres' alleged reductions of Sabre's prices, use of

its PSC license, sale of its equipment, or misrepresentations to
                                                -9-
the Government.             Accordingly, even if salaries and bonuses might

theoretically constitute                  a     benefit    for    purposes     of    an unjust

enrichment claim,              Sabre has not plausibly alleged that                     it had

any     role       in     conferring          these      benefits     on     the     Individual

Defendants          or,      relatedly,          that     the     Individual        Defendants'

retention of such benefits was unjust.                           Therefore, Sabre has not

stated        a   claim     for    unjust       enrichment        against    the     Individual

Defendants and the Motions shall be granted on Count 19.

        12.       Finally,        Sabre       does       not     oppose     the      Individual

Defendants' Motions for judgment on Count 20, which is entitled

"Lost     Sabre           Revenues        and     Delay        Damages      through     Torres'

Breaches."              Consequently,           the     Motions    shall     be     granted   as

unopposed on that Count. 7

        For the reasons set forth above, it is hereby

        ORDERED,        that the Motions for Judgment on the Pleadings are

granted in part and denied in part; and it is further

        ORDERED,        that      judgment       is     granted     for    Scott     Torres   on

Counts 15-20 of the FAC and he is dismissed from the case in its

entirety; and it is further

7
  The Individual Defendants also seek judgment in their favor as
to Count 20 of the Proposed FAC (entitled "Misappropriation of
Sabre's Past Performance") , but that request is moot because
Sabre voluntarily withdrew that claim in its actual FAC.     See
Jerry Torres Mot. at 23.

                                                 -10-
     ORDERED, that judgment is granted for Jerry Torres, Rebekah

Dyer, and Kathryn Jones on Counts 15-17 and 19-20 of the FAC.

     The   current   status   of   the   claims   against   the   Individual

Defendants is as follows:

       •   Count 15: Motions   for  Judgment   on   the            Pleadings
           granted and claim dismissed in its entirety.

       •   Count 16: Motions   for  Judgment   on  the             Pleadings
           granted and claim dismissed in its entirety

       •   Count 17: Motions   for  Judgment   on  the             Pleadings
           granted and claim dismissed in its entirety

       •   Count 18: As  to Defendant Scott Torres, Motion for
           Judgment on the Pleadings granted and claim dismissed
           in its entirety; as to Jerry Torres, Rebekah Dyer, and
           Kathryn Jones, Motions for Judgment on the Pleadings
           denied as to conversion of equipment; Motions granted
           as to all other theories.

       •   Count 19: Motions for Judgment on the                   Pleadings
           granted and claim dismissed in its entirety

       •   Count 2 0: Motions  for  Judgment   on   the            Pleadings
           granted and claim dismissed in its entirety

       •   Count 21: Claim dismissed by Court Order dated January
           30, 2014 [Dkt. No. 287] 8

8
   The Individual Defendants have not sought Judgment on the
Pleadings as to this Count (Count 22 in the Proposed FAC) , which
asserts a claim against Torres, Jerry Torres, and Rebekah Dyer
for alleged fraud arising out of events in this litigation.
However, it should be noted that the Court previously granted
Torres' Motion to Dismiss this claim on three bases: ( 1) Sabre
has not alleged any detrimental reliance on the alleged fraud;
(2) Sabre has not cited any authority holding that bad faith
conduct in litigation gives rise to an independent cause of
action and the weight of binding authority is contrary; and (3)
Sabre has alternative remedies under Rule 37 of the Federal
                                   -11-
     Therefore,   as   of   August    21,    2014,   Count   18   is   awaiting

trial against Jerry Torres, Rebekah Dyer and Kathryn Jones.

August 21, 2014
                                            Gladys Ke sler
                                            United States District Judge

Copies to: attorneys on record via ECF

Rules of Civil Procedure.   See Sabre III, 2014 WL 341071, at *8-
9 (citing Russell v. Principi, 257 F.3d 815, 821 (D.C. Cir.
2 0 01) ("Plaintiff's] effort to pursue an independent cause of
action for bad faith litigation abuse against [defendant] fails.
        [T]o date no circuit court has held that a federal cause
of action exists") ; Interstate Fire & Cas. Co., Inc. v. 1218
Wisconsin, Inc., 136 F. 3d 830, 836 (D.C. Cir. 1998) (rejecting
tort claim for "fraud on the court" because "[a]lthough the act
complained of is styled a 'fraud,' the remedy lies within the
court's equitable discretion") (citations omitted)).

                                     -12-