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Tribalco, LLC v. Liteye Systems, Inc.

United States District Court, D. Maryland

May 16, 2018

TRIBALCO, LLC, Plaintiff
v.
LITEYE SYSTEMS, INC., Defendant.

          MEMORANDUM OPINION

          Charles B. Day, United States Magistrate Judge

         Before this Court is Defendant Liteye Systems, Inc.'s Motion to Dismiss Tribalco, LLC's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Defendant's Motion”)(ECF No. 22). The Court has reviewed Defendant's Motion, and the opposition and reply thereto. No. hearing is deemed necessary. See Local Rule 105.6 (D. Md.). For the reasons presented below, the Court hereby GRANTS Defendant's Motion.

         I. Factual Background

         Plaintiff brings suit alleging several causes of action, namely: breach of contract; constructive fraud; and restraint of trade. Plaintiff also seeks relief by way of declaratory judgment and a permanent injunction. Attached to the Complaint is a document which the parties view as central to this dispute, titled “Exclusive Teaming and Distributorship Agreement” (“ETDA”). Id. The parties have competing views of the breadth, scope and duration of the ETDA.

         Plaintiff is a “telecommunications and global integrated technology services and solutions company.” Compl. ¶ 7. Defendant is a “producer of surveillance systems for the protection of critical military infrastructure, whose products include . . . Anti-UAV Defense Systems (“AUDS”).” Compl. ¶ 8. “On June 15, 2016, the Joint Improvised Threat Defense Agency of the United States Department of Defense (“JIDA”)” was seeking to purchase “ten to fifteen AUDS.” Compl. ¶ 9. The parties agreed this was an “opportunity” for them to pursue. Compl. ¶ 10. “On July 22, 2016, JIDA directed the U.S. Air Force Cycle Management Center (“AFLCMC”) to issue a Letter of Intent” to Plaintiff for the purchase of the first four AUDS. Compl. ¶ 11. Five days later, the parties signed the ETDA. Compl. ¶ 12.

         On August 30, 2016, AFLCMC awarded a contract to Plaintiff for the production of three AUDS, and two spare units. Compl. ¶ 19. On September 6, 2016, the parties entered into a subcontract (“Subcontract”) by which D would produce and provide the AUDS and spare parts. Compl. ¶ 20. Plaintiff contends that the “ETDA was broader in scope, time and subject matter than the Subcontract.” Compl. ¶ 21. The Subcontract expired on December 31, 2016. Compl. ¶ 23.

         While Defendant was the producer of AUDS, the ETDA made Plaintiff the “exclusive distributor of AUDS to the AFLCMC.” Compl. ¶ 15. In 2017, Plaintiff contends that it took various measures to advance the parties' relationship and to obtain additional contracts however, Defendant effectively refused to cooperate. Compl. ¶¶ 27-30. On February 27, 2017, Defendant sent Plaintiff a “cease and desist” letter disavowing “the ETDA, asserting that the ETDA had been superseded by the Subcontract, ” and demanded that Plaintiff “cease any communications with third parties concerning the procurement of AUDS supplied” by Defendant. Compl. ¶ 31. In August 2017, when a new opportunity arose for the production and sale of AUDS, Defendant refused to cooperate with Plaintiff to pursue the proposal. Compl. ¶¶ 33-34.

         II. Standard of Review

         “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint.” McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010) (citation omitted). “To survive a motion to dismiss, a 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, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A court decides whether this standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to relief. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011). Dismissal “is inappropriate unless, accepting as true the well-pled facts in the complaint and viewing them in the light most favorable to the plaintiff, the plaintiff is unable to ‘state a claim to relief.'” Brockington v. Boykins, 637 F.3d 503, 505-06 (4th Cir. 2011) (citation omitted).

         When ruling on a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the Court “should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff”; the motion “should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief.” Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The court “also may consider documents attached to the complaint and the motion to dismiss if they are authentic and central to the complaint.” Guzman v. D & S Capital, LLC, Civ. No. MAB 14-CV-01799, 2015 WL 772797, at *2 (D. Md. Feb. 20, 2015) (citing Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (citations omitted)).

         III. Analysis

         A. The Breach of Contract Claim

         Plaintiff's first cause of action rests exclusively on the alleged breach of the ETDA. Compl. ¶ 48. Since the Court is considering a motion to dismiss, it “may also consider documents attached to the complaint, see Fed.R.Civ.P. 10(c), as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic.” Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). There is no dispute but that the Subcontract expired by its terms on December 31, 2016. Compl. ¶ 23. The opening issue is whether the ETDA was clear in its terms, imposing upon the parties an obligation to conduct their affairs in accordance with said terms. The ETDA contains a provision choosing Maryland law for its application. “This Agreement shall be governed by and subject to the jurisdiction of the laws of the State of Maryland without regard to any of its choice of law provisions.” ETDA, ¶ 13. Accordingly, the substantive contract law of Maryland applies.

         Longstanding Maryland law sets forth the pleading standard for a breach of contract claim. Such a claim “must of necessity allege with certainty and definiteness facts showing a contractual obligation owed by the defendant to the plaintiff and a breach of that obligation by defendant.” Polek v. J.P. Morgan Chase Bank, N.A., 424 Md. 333, 416 (2012) (quoting Cont'l Masonry Co. v. Verdel Constr. Co., 279 Md. 476, 480 (1977). The “contractual obligation” of Defendant is expressed in the ETDA. For purposes of Plaintiff's breach of contract claim, the Complaint references the ETDA in paragraphs 12-17, 21, 31-32, and 40-48. The only paragraphs in the Complaint that provide factual texture about the ETDA (as opposed to argument or conclusions) are paragraphs 12-16, and 40. As to these paragraphs, Defendant really takes issue with only two, paragraphs 14 and 40, set forth below:

14. The purpose of the ETDA was to pursue the award of contracts to Tribalco for the procurement of AUDS by the ...

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