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 OPINION

Sabre International Security ("Sabre") brings this case

against its former business partner, Torres Advanced Enterprise

Solutions, LLC ( "TAES") and several current and former TAES

officers, for breach of contract, tortious interference with

prospective economic advantage, fraud, and related torts.

This matter is before the Court on TAES's Motion to Dismiss

Counts 15-18 and 20-22 of the First Amended Complaint [Dkt. No.

253] . Upon consideration of the Motion, Opposition [Dkt. No.

262], and Reply _[Dkt. No. 269], and the entire record herein,

and for the reasons set forth below, the Motion to Dismiss shall

be granted in part and denied in part. I . BACKGROUND

A. Factual Background1

Sabre is an Iraqi limited liability company with its

principal place of business in Baghdad, Iraq. TAES is a limited

liability company organized under the laws of Virginia. Both

companies provide security services internationally to private

and governmental entities.

Between approximately 2007 and 2010, Sabre and TAES worked

together to perform security contracts at United States military

installations in Iraq. They did so pursuant to two Multiple

Award Task Order Contracts ("MATOCs") issued by the United

States Government: the Theater-Wide Internal Security Services

("TWISS") MATOC, number W91GDW-07-D-4026 ("TWISS I MATOC"), and

its successor, TWISS MATOC number W91DGW-09-D-4030 ("TWISS II

MATOC").

Sabre was awarded the TWISS I MATOC on September 27, 2007,

and thereby became eligible to compete for specific TWISS I

"task orders," which covered specific projects put out for bid

by the Government. To aid it in competing for such task orders,

on November 8, 2007, Sabre entered into a subcontractor

agreement with TAES, under which TAES agreed to provide

1 The facts set forth herein are taken from the First Amended Complaint ( "FAC") [Dkt. No. 242] and the undisputed facts set forth in the parties' briefs. -2- personnel holding valid United States Government security

clearances to work on task orders awarded to Sabre under the

TWISS I MATOC. The Sctbre-TAES team bid for and was awarded

several TWISS I Task Orders, which it performed with Sabre

acting as prime contractor and TAES acting as subcontractor.

In 2009, the United States amended its policies to require

that prime contractors, like Sabre, possess a valid Defense

Department Industrial Security Program Facility Security

Clearance ("FCL"). Sabre, as a foreign company, was not

eligible to obtain an FCL. Conversely, TAES was not eligible to

perform TWISS I work without Sabre, because only Sabre, and not

TAES, possessed a Private Security Company ("PSC") license

issued by the Ministry of the Interior of the Republic of Iraq,

which was required to perform private security services in Iraq.

Consequently, on December 30, 2009, the parties entered into an

Asset Purchase Agreement ( "APA") and novation of their

subcontractor agreement by which TAES became the prime

contractor and Sabre became the subcontractor for TWISS I work.

This modification allowed the Team to avoid termination of the

TWISS I MATOC.

Under .the APA, TAES became responsible for submitting

invoices to the Government and for compensating Sabre once it

received payment from the Government. The APA also included a -3- form lease agreement, pursuant to which Sabre would lease to

TAES equipment necessary to perform TWISS I work. The APA

otherwise adopted the parties' original obligations under the

TWISS I subcontractor agreement, including its compensation

scheme.

On August 6, 2009, Sabre and TAES entered into a separate

Teaming Agreement to govern work under the TWISS II MATOC. As

with the APA, the Teaming Agreement designated TAES as the prime

contractor and Sabre as the subcontractor. It required, inter

alia, that: (1) Sabre and TAES compete exclusively as a team for

any TWISS II proposal submitted; (2) both parties approve any

such proposal; ( 3) TAES offer Sabre any TWISS II work awarded

within Sabre's Scope of Work, as defined under the Agreement;

(4) TAES manage the team's affairs and protect Sabre's rights

with respect to the Government; and (5) TAES pay Sabre's

invoices within 15 working days after receiving payment from the

Government.

Sabre alleges that TAES breached the Teaming Agreement, and

committed fraud and various other torts, by, inter alia, (1)

unilaterally reducing Sabre's prices in TWISS II proposals and

refusing to pay Sabre in accordance with previously agreed-upon

pricing schemes; (2) bidding on TWISS II task orders without

Sabre's consent or knowledge, and thereafter performing such -4- work without Sabre's participation; (3) failing to make timely

payment of Sabre's TWISS II invoices; ( 4) failing to return

leased equipment to Sabre and, instead, selling it to one or

more third parties; and ( 5) failing to protect Sabre's legal

rights in relation to certain disputes with the Government.

Sabre also alleges that TAES breached the APA by failing to

fully compensate Sabre for work performed on TWISS I task

orders. Sabre further alleges that TAES made a secret internal

decision in the spring of 2010 to cease honoring the Teaming

Agreement and the APA and instead enter to into direct

competition with Sabre.

B. Procedural Background

Sabre filed its original Complaint on April 29, 2011. On

July 5, 2013, approximately three and a half months after the

close of fact discovery, Sabre moved to amend its Complaint to

add claims of fraud against TAES and several of its officers in

light of information obtained during discovery. The Court

granted Sabre's Motion to Amend on October 3, 2013, and Sabre

filed its FAC on October 10, 2013 [Dkt. No. 242]

On November 14, 2013, TAES filed the instant Motion to

Dismiss Counts 15-18 and 2 0-22 of the FAC [Dkt. No. 2 53] . On

December 6, 2013, Sabre filed its Opposition [Dkt. No. 262]. On

December 20, 2013, TAES filed its Reply [Dkt. No. 269].

-5- II. STANDARD OF REVIEW

To survive a motion to dismips under Rule 12(b) (6), a

plaintiff need only plead "enough facts to state a claim to

relief that is plausible on its face" and to "nudge [ [his or

her] claims across the line from conceivable to plausible."

Bell Atlantic Corp. v. Twombly,

(2007).

"[O]nce a claim has been stated adequately, it may be supported

by showing any set of facts consistent with the allegations in

the complaint."

.

Under the Twombly standard, a "court deciding a motion to

dismiss must not make any judgment about the probability of the

plaintiffs' success . [,] must assume all the allegations in

the complaint are true (even if doubtful in fact) [, and]

must give the plaintiff the benefit of all reasonable inferences

derived from the facts alleged." Aktieselskabet AF 21. November

2001 v. Fame Jeans Inc.,

(D.C. Cir. 2008)

(internal quotation marks and citations omitted) . A complaint

will not suffice, however, if it "tenders 'naked assertion[s]'

devoid of 'further factual enhancement. '" Ashcroft v. Iqbal,

(2009) (quoting Twombly,

)

(alteration in Iqbal) .

-6- III. ANALYSIS

A. Count 15 Fails to State a Claim for Fraud

In Count 15, Sabre brings a claim for "Fraud with Respect

to TAES Pricing of and Payment to Sabre for Sabre TWISS II Scope

of Work." FAC ~~ 265-438. The crux of this cl~im is that TAES

officers Rebekah Dyer, Kathy Jones, Scott Torres, and Jerry

Torres pretended, through a series of affirmative

representations and misleading omissions, to accept Sabre's

price terms for several TWISS II task orders, while secretly

reducing these price terms in proposals to the Government and

intending not to honor them once Sabre had performed the work.

Sabre alleges that TAES' apparent acceptance of its pricing

induced it to perform several TWISS II task orders that it would

not have performed had it known of TAES' true intent to reduce

its prices.

To make out a claim for fraud under District of Columbia

law, a plaintiff must allege that: ( 1) the defendant made a

false representation, (2) the representation was in reference to

a material fact, (3) the defendant had knowledge of its falsity,

( 4) the defendant intended to deceive, ( 5) the plaintiff acted

in reliance on the misrepresentation, and (6) the reliance was

reasonable. See, e.g., In re U.S. Office Prods. Co. Sec.

Litig.,

(D.D.C. 2003) (citing R · & A, -7- Inc. v. Kozy Korner, Inc.,

(D.C. 1996);

Hercules & Co. v. Shama Rest. Corp.,

(D.C.

1992)). 2

Because disputes relating to contractual obligations

"should generally be addressed within the principles of law

relating to contracts," the D.C. Court of Appeals has held that

"conduct occurring during the course of a contract dispute may

be the subject of a fraud[] [claim]" only if (1) "there are

facts separable from the terms of the contract upon which the

tort may independently rest," and (2) "there is a duty

independent of that arising out of the contract itself, so that

an action for breach of contract would reach none of the damages

suffered by the tort." Choharis v. State Farm and Casualty Co.,

(D.C. 2008); see also Ulliman Schutte

Const., LLC v. Emerson Process Mgmt. Power & Water Solutions,

No. 02 Civ. 1987 (RMC),

, at *14 (D.D.C. Mar. 31,

2006) (emphasizing "the conceptual distinction between breach of

contract claims and tort claims [which] preclud [es] plaintiffs

from recasting ordinary breach of contract claims into tort

claims") (citation and punctuation omitted).

2 Both parties cite District of Columbia law and thus appear to agree that such law applies. -8- TAES argues that Count 15 must be dismissed because it

"impermissibly seeks to transform Sabre's breach of contract

claims into claims for 'fraud in the performance of a

contract.'" Def.'s Mem. at 1. The Court agrees.

The allegations in Count 15 basically claim that TAES

falsely assured Sabre it would pay Sabre's invoices (at specific

prices) for subcontracting work performed under the Teaming

Agreement, thereby inducing Sabre to perform such subcontracting

work. Such a claim is entirely intertwined, if not wholly

duplicative, of Sabre's claim that TAES breached the Teaming

Agreement by reducing Sabre's prices in Government proposals and

failing to pay Sabre's invoices in full. See FAC ~~ 105, 108,

111-116. Count 15 thus falls squarely within the D.C. Court of

Appeals' admonition that "even a 'willful, wanton or malicious'

breach of a contract to pay money cannot support a claim of

fraud." Choharis,

(citing Bragdon v. 2512

Assocs. Ltd. P'ship,

, 1173 (D.C. 2004)).

Sabre now argues, in its Opposition brief, that it has

stated a claim for fraud in the inducement, rather than fraud in

the execution of a contract, such that Count 15 is not barred by

the rule stated in Choharis. There are two problems with this

argument. First, as TAES correctly points out, the term "fraud

in the inducement" barely appears in the 113-page FAC, and -9- certainly not in the lengthy title of this Count. Def. 's Reply

at 4. Although this fact is not dispositive of whether Sabre

states such a claim, it does indicate that Sabre's reference to

a fraudulent inducement theory in its Opposition brief is merely

a last-minute effort to avoid the rule of Choharis.

More importantly, in the single instance in which Sabre

does recite the phrase "fraudulently induced" in Count 15, it

claims to have been "fraudulently induced" to perform its

obligations under the Teaming Agreement, rather than to do

something it was not contractually required to do. See FAC ~

436 ("As a result [of TAES' representations regarding prices]

Sabre was fraudulently deprived of the right to refuse to

perform and was fraudulently induced into spending millions of

dollars [to perform] . ") . 3 Further, Sabre purports to have been

injured solely by virtue of TAES' failure to perform an

obligation it was contractually obligated to perform under the

Teaming Agreement.

3 Sabre now argues that TAES' representations fraudulently induced it to enter specific task orders. This attempt to recast the parties' relationship as a series of small contracts rather than the overarching Teaming Agreement is contradicted by the allegations of the FAC. As Sabre points out numerous times, the Teaming Agreement required Sabre to perform TWISS II subtask orders. See FAC ~ 77 ("'[Sabre] shall provide the Team with all personnel and provide all services required by . any TWISS TOR awarded to the Team, excepting Leading Members Scope of Work.'") (emphasis added) (quoting Teaming Agreement§ 1.2.C). -10- As such, the allegations of fraud in Count 15 are

completely intertwined with TAES' performance of its obligations

under the Teaming Agreement, and Sabre's remedy is a contract,

not a fraud, remedy. See Choharis,

(independent claim for fraud is cognizable only if "there are

facts separable from the terms of the contract upon which the

tort may independently rest," and "there is a duty independent

of that arising out of the contract itself so that an action for

breach of contract would reach none of the damages suffered by

the tort.") (emphasis added).

For the foregoing reasons, Count 15 shall be dismissed. 4

B. Count 16 Fails to State a Claim for Fraud

In Count 16, Sabre alleges that on September 5, and October

18, 2010, it notified the Government that TAES had "breached the

Teaming Agreement and owed Sabre millions of dollars on unpaid

[] invoices." FAC ~ 440. The Government, in turn, issued a

Letter of Concern to TAES threatening to take administrative

and/or remedial action against TAES if its subcontractors had

not been paid. In response, on October 24, 2010, TAES

represented to the Government that it had paid all amounts due

4 Having concluded that Sabre is limited to a contract remedy, the Court does not reach TAES' alternative argument that the economic loss doctrine independently bars Sabre's Count 15.

-11- to Sabre. Sabre contends this response was knowingly false and

was intended "to deceive the U.S. Government into believing"

TAES was current on its payments, so as to "prevent the U.S.

Government from requiring [TAES] to pay Sabre's invoices [.]"

FAC ~ 442-44. Sabre claims that these circumstances amount to

fraud.

As set forth above, the element of reliance is a

prerequisite to recovery in fraud. It is not enough to show

that the Government relied on TAES' representations; Sabre must

show that it justifiably relied on such representations and

suffered loss as a result. See Va. Acad. of Clinical

Psychologists v. Grp. Hosp. & Med. Servs., Inc., 878 A:2d 1226,

1238 (D.C. 2005) ("[T]he maker of a fraudulent misrepresentation

is subject to liability for pecuniary loss suffered by one who

justifiably relies upon the truth of the matter misrepresented,

if his [or her] reliance is a substantial factor in determining

the course of conduct that results in his [or her] loss.")

(citing Restatement (Second) of Torts§ 546 (1977)).

Sabre does not purport to have relied on TAES'

representations to the Government. In fact, it clearly states

that it believed its invoices had not been paid and continued to

-12- believe as much notwithstanding TAES' representations otherwise.

See FAC ~440. 5

Sabre argues that it nevertheless satisfies the reliance

requirement because it was entitled to assume that TAES would

fulfill its "duty" not to make inaccurate statements to the

Government, which purportedly induced it (Sabre) into "not

taking further" action in its communications with the

Government. P 1 . ' s Opp' n at 13 . This argument shows only that

Sabre relied on its own assumptions regarding what TAES would do

or say 1 not on what TAES actually did or said. Because Sabre

has not alleged that it relied on TAES' representations to the 6 Government, Sabre does not state a claim for fraud.

5 Sabre. cites Nader v. Allegheny Airlines, Inc.,

(D.C. Cir. 1975) rev'd on other grounds,

(1976), apparently for the proposition that it may recover in fraud based on the Government's reliance on TAES' statements. Nader does not support such a proposition. The Court of Appeals in Nader held merely that a party who relies on a misrepresentation can sometimes recover against its maker even if that party, referred to in the decision as a "third party," is not. the intended or direct recipient of the misstatement. See id. at 548; accord Armstrong v. Accrediting Council for Continuing Educ. & Training, Inc.,

(D.D.C. 1997) . The Court of Appeals did not suggest that a plaintiff, such as Sabre,· who has not relied on a misrepresentation, can recover for fraud. 6 Sabre also does not identify any independent harm flowing from TAES' .statements. It asserts vaguely that the statements prevented the Government from taking remedial action to cure the underlying breach of contract. FAC ~ 442-44; see also Pl. 's Opp' n at 12. Sabre cannot spin a fraud claim out of conduct -13- Having failed to state a claim for fraud in the first

instance, Sabre also does not state a claim for aiding and

abetting fraud. Pl.'s Opp'n at 11, 14. See, e.g., Burnett v.

Al Baraka Inv. & Dev. Corp.,

(D.D.C.

2003) ("Liability for aiding and abetting . must be tied to

a substantive cause of action[.]"). Consequently, Count 16

shall be dismissed.

C. Count 17 Fails to State a Claim for Misappropriation

In Count 17, Sabre alleges that TAES secretly used its PSC

license in a proposal to the Government for work at First

Operating Base ("FOB") Cruz Morris, and never informed Sabre

that it was submitting such a proposal. Sabre further asserts

that, after TAES was awarded the Cruz Morris task order, TAES

concealed the award from Sabre and declined to allocate Sabre

its rightful share of the work. Such conduct, Sabre maintains,

amounts to "fraudulent misappropriation and use of Sabre's PSC

license" and entitles it to "lost profits for its scope of the

work" at FOB Cruz Morris. FAC ~~ 450-51.

that merely caused a known contract dispute to remain unresolved. See Choharis,

(observing that "the mere disappointment of plaintiff's hope to receive his contracted-for benefit" would not support fraud claim even in the presence of bad faith) .

-14- As TAES rightly points out, Sabre identifies no authority

in the District of Columbia recognizing a claim for "fraudulent

misappropriation" of a license. Def.'s Mot. at 16. In response,

Sabre maintains that it has stated a claim either for fraud or

unfair competition. See Pl.'s Opp'n at 14-16.

The fraud theory is easily disposed of. Sabre reasons that

TAES, by including a photocopy of Sabre's PSC license in the

Cruz Morris proposal, defrauded the Government into believing

its use of the permit was authorized when it was not. FAC ~

450; Pl.'s Opp'n at 14. As explained above, Sabre cannot

recover for fraudulent representations directed at the

Government unless it demonstrates that it was aware of such

representations and relied on them, which Sabre does not allege.

As a result, Count 17 does not state a claim for fraud.

The unfair competition theory also fails. "Unfair

competition is not defined in terms of specific elements, but by

various acts that would constitute the tort if they resulted in

damages." Hanley-Wood LLC v. Hanley Wood LLC,

(D.D.C. 2011) (emphasis added) (citing Furash & Co. v.

McClave,

(D.D.C. 2001)) . 7

7 Activities that may give rise to a claim for unfair competition include "defamation, disparagement of a competitor's goods or business methods, intimidation of customers or employees, interference with access to the business, threats of groundless -15- Sabre has not described any way in which its business was

damaged by TAES' use of the PSC license in the Cruz Morris

proposal. There is no indication, for example, that TAES'

conduct injured Sabre's business reputation, impaired its

ability to compete for any opportunity, resulted in any loss of

good will between Sabre and the Government, or caused any other

competitive injury. Sabre alleges only that TAES' use of the

license without Sabre's participation violated the exclusivity

provisions of the Teaming Agreement and allowed TAES to

"unlawfully reap[] profits that could not have been

obtained without Sabre." FAC ~~ 446, 451. While these

allegations may support a claim for breach of contract or unjust

enrichment, they do not identify any competitive injury, and

therefore do not support a cause of action for unfair

competition.

In its Opposition brief, Sabre argues that it did suffer a

competitive injury because TAES' conduct deprived it of the

"time, labor and talent expended to obtain and

successfully use the PSC license in Iraq." p1 . ' s Opp' n at 16 ,

This argument finds no support in the FAC. There are no facts

suits, commercial bribery, inducing employees to sabotage, [and] false advertising or deceptive packaging likely to mislead customers into believing goods are those of a competitor." Hanley-Wood LLC,

(citing B & W Mgmt., Inc. v. Tasea Inv. Co.,

, 881 n.3 (D.C. 1982)). -16- suggesting that TAES' use of the license in the Cruz Morris

proposal hindered Sabre's ability to use the license in other

contexts, threatened its ability to maintain the license, or in

any way deprived Sabre of the general benefits of the license.

Because Sabre has not identified any competitive injury

resulting fror(l the Cruz Morris incident, it does not state a

claim for unfair competition. See Pac. Grp. v. First State Ins.

Co.,

(9th Cir. 1995) (finding unfair

competition theory deficient because, inter alia, plaintiff "did

not allege that the false advertising caused its injury")

(emphasis added); Yantha v. Omni Childhood Ctr., Inc., No. 13-

CV-1948 ARR JMA,

, at *7 (E.D.N.Y. Sept. 20,

2013) (dismissing unfair competition claim because complaint

failed to "stat [e] a competitive injury as a result of any

unfair competition by defendants").

For the foregoing reasons, Count 17 shall be dismissed.

D. Count 18 States a Claim for Conversion of Equipment

In Count 18, Sabre brings a claim for "conversion of

Sabre's property and unjust enrichment." Although styled as a

single claim, Count 18 is based on two separate incidents, which

require independent analysis.

First, Sabre alleges that it temporarily loaned or leased

to TAES more than $1 million worth of equipment so TAES could -17- perform the Team's work at Joint Security Station ("JSS")

Shield. According to Sabre, at the conclusion of the JSS Shield

job, TAES failed to return the equipment, and instead, sold the

property to one or more third parties without Sabre's knowledge

or consent. FAC ~ 455. Sabre contends that these circumstances

constitute conversion. The Court agrees.

"The essence of a conversion is a wrongful taking or a

wrongful retention of property after a rightful possession."

Shehyn v. Dist. of Columbia,

(D.C. 1978).

To state a claim for conversion under District of Columbia law,

the plaintiff must allege "(1) an unlawful exercise, (2) of

ownership, dominion, or control, (3) over the personal property

of another, (4) in denial or repudiation of that person's rights

thereto." Xereas v. Heiss,

(D.D.C. 2013)

(citing cases); see also Baltimore v. Dist. of Columbia,

(D.C. 2011). Each of these elements is met by

Sabre's allegations that TAES sold equipment belonging to Sabre

to third parties without Sabre's consent.

TAES argues that where, as in this case, a defendant's

initial possession of property was lawful, a plaintiff may not

recover under a conversion theory unless it establishes that it

first made a demand for the property, which Sabre has not done.

See Def. 's Mem. at 17. (citing Poullard v. Smithkline Beecham -18- Corp., No. 02 Civ. 1590 (CKK),

, at *12 (D.D.C.

Nov. 30, 2005)). However, the D.C. Court of Appeals has

observed that "[a] demand for the return of property 'is

necessary only when there are no other facts and circumstances

independently establishing a conversion.'" Washington Gas Light

Co. v. Pub. Serv. Comm'n of D.C.,

(D.C. 2013)

(emphasis added) (citing Bowler v. Joyner,

(D.C. 1989)). TAES' purported sale of Sabre's equipment to one

or more third parties without Sabre's consent would

"independently establish" its repudiation of Sabre's property

rights. Therefore, no demand was required. 8

Sabre's second theory is that TAES' use of its PSC license

in the Cruz Morris proposal constituted conversion. As

discussed, there are no facts indicating that Sabre lost any of

the benefits of its license because of TAES' inclusion of the

PSC license in the Cruz Morris proposal. Consequently, Sabre

has not stated a claim for conversion of its PSC license. See

8 TAES also claims that it had a lease agreement with Sabre, which limits Sabre to a contract remedy because a plaintiff "may not cloak a breach of contract claim in the dress of conversion." Def. 's Mem. at 17. Sabre is not recasting a contract claim as one for conversion; its allegations give rise to a claim for conversion independent of any contract remedies it may also have. See Sloan ex rel. Juergens v. Urban Title Servs., Inc., No. 06 Civ. 1524 (CKK),

, at *7 (D.D.C. Mar. 27, 2011).

-19- Kaempe v. Myers,

(D.C. Cir. 2004) ("Where

there has been no dispossession of property rights, there can be

no action for conversion.") . 9

For the foregoing reasons, Count 18 shall be dismissed

insofar as it alleges conversion of Sabre's PSC license, but not

insofar as it alleges conversion of Sabre's equipment.

E. TAES' Motion to Dismiss Count 20 is Moot

Count 20 is styled as a claim for "Misappropriation of

Sabre's Past Performance." However, in Sabre's Reply brief in

support of its Motion to Amend the Complaint, Sabre voluntarily

withdrew this count. See Pl.'s Reply ISO Mot. to Amend at 2 n.l

[Dkt . No. 2 3 9] ("On further reflection, Sabre is voluntarily

withdrawing Count 20, lAC ~~ 470-77[.]"). TAES' Motion to

Dismiss Count 2 0 is therefore moot. 10

F. Count 21 Is Duplicative of Count 3

In Count 21, Sabre brings a claim for "lost [] revenues and

delay damages" resulting from TAES' inability to timely perform

the task order at JSS Shield in early 2010. Sabre acknowledges

9 Sabre argues, in the alternative, that TAES was unjustly enriched by virtue of having used the PSC license to win the task order at FOB Cruz Morris. Because Count 8 of the FAC already alleges unjust enrichment with respect to the Cruz Morris job, any assertion of such theory in Count 17 is merely duplicative. See FAC ~ 222(B). 10 It is unclear why Sabre did not remove this claim from its FAC prior to filing it. -20- that this count is based on the same facts and the same legal

theory as the breach of contract claim alleged at Count 3. Pl's

Opp' n at 21. At best, . Counts 3 and 21 articulate a slightly

different theory of harm resulting from the same breach of

contract. Consequently, Count 21 shall be dismissed as

duplicative of Count 3. Cf. Fed. R. Civ. P. 10(b) (~[E]ach

claim founded on a separate transaction or occurrence . . must

be stated in a separate count[.]").

G. Count 22 Fails to State a Claim for Fraud

Finally, in Count 22, Sabre brings another claim of

~fraud," which relates, not to the ~arties' performance of TWISS

work under the relevant agreements, but to TAES' conduct in this

litigation. In particular, Sabre contends that TAES, with the

assistance of its prior counsel, defrauded Sabre in this action

by concealing material evidence, filing knowingly false

declarations, fabricating evidence, and mounting defenses it

knew were not supported by the evidence: See FAC ~~ 499, 501,

506. Sabre claims it was damaged ~by virtue of having

devoted substantial resources, time and money (including payment

of attorneys fees) to defend against" TAES' assertedly

fraudulent claims and defenses. FAC ~ 505.

At the outset, the Court emphasizes that the misconduct

alleged in Count 22 is extremely serious, and the Court's -21- disposition of this count is not intended to suggest that Sabre

is without recourse in other venues for such misconduct should

it be proven. The narrow question presented, however, is

whether Sabre's allegations state a claim for fraud or any other

cause of action. The Court concludes that they do not.

First, as with the fraud claims in Counts 16 and 17, there

is no allegation that Sabre relied, to its detriment, on any of

the allegedly false representations and omissions made by TAES

in this lawsuit. To the contrary, Sabre has vigorously

contested the factual underpinnings of TAES' defenses and

steadfastly adhered to its version of the facts throughout.

Sabre also persisted in its attempts to obtain discovery from

TAES when documents were. not immediately forthcoming, and

appears now to have obtained the documents that were not

previously produced. Thus, it is clear Sabre did not rely on

the truth of any of the alleged misrepresentations, and without

such reliance, Sabre does not state a claim for fraud. Cf.

Cresswell v. Sullivan & Cromwell,

(2d Cir. 1990)

(justifiable reliance is essential element of an "ordinary

common-law fraud action" even where plaintiff alleges bad faith

litigation)

Second, and more broadly, Sabre cites no authority

suggesting that it may maintain any independent cause of action -22- for the misconduct alleged in Count 22. Sabre relies on Jemison

v. Nat'l Baptist Convention, USA, Inc.,

(D.C. 1998)

and Chambers v. NASCO, Inc.,

(1991)). These

cases merely affirm a court's inherent power to sanction a party

for misconduct during the course of the litigation; they do not

hold, or even intimate, that such behavior supports an

independent cause of action for damages. See Chambers,

; Jemison, 72 0 A. 2d at 2 82 (a court "may safe~y rely on

its inherent power to sanction those who engage in bad faith

conduct in the course of litigation") (citing Chambers,

).

Nor has the Court discovered any case holding that bad

faith conduct in litigation gives rise to an independent cause

of action for damages. The weight of the authority is contrary.

See Russell v. Principi,

(D.C. Cir. 2001)

("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.,

(D.C. Cir. 1998) (rejecting a

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) ; see also -23- Ortega v. City of New York,

(2007) (declining to

recognize independent tort for spoliation of evidence because

such conduct is adequately addressed through range of remedial

options available to court) .

Given that Sabre may seek relief for the misconduct alleged

in Count 22 pursuant to Rule 37 of the Federal Rules of Civil

Procedure and the Court's inherent powers, Count 22 shall be

dismissed.

IV. CONCLUSION

For the foregoing reasons, TAES' Motion to Dismiss shall be

gran ted in part and denied in part. An Order shall accompany

this Memorandum Opinion.

January 30, 2014

Copies to: attorneys on record via ECF

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