United States District Court, E.D. Virginia, Alexandria Division
JAMES C. CACHERIS, District Judge.
This matter is before the Court on Defendant SimplexGrinnell, LP's ("Defendant" or "Simplex") Motion to Dismiss. [Dkt. 3.] Following oral argument of counsel, the Court denied the motion from the bench and required Simplex to file an answer no later than May 29, 2015. This opinion memorializes the Court's reason for this decision.
T&B Electric Company ("T&B") entered into a contract with R.E. Daffan, Inc. ("Daffan") to complete electrical work on one of Daffan's projects ("the project") in Arlington, Virginia. (Compl. [Dkt. 1-1] ¶¶ 6-7.) T&B's scope of work included the security package for the project. ( Id. ¶ 7.) T&B then contracted with Simplex to install the security package. ( Id. ) The terms of the relationship were set out in a purchase order signed by both parties. ( Id. ) According to T&B, Simplex "failed to perform its duties under the Purchase Order with T&B in a timely manner." ( Id. ¶ 9.) As a result of Simplex's failure to perform in a timely manner, completion of the entire project was delayed. ( Id. ¶¶ 10, 12.)
T&B asserted claims against Daffan for breach of contract due to Daffan's alleged failure to fully pay T&B for its work. ( Id. ¶ 11.) T&B was forced to "compromise" its claims with Daffan "in part" because schedule analyses showed that Simplex's late completion of the security system delayed the entire project. ( Id. ¶ 13.)
T&B filed a one-count breach of contract action against Simplex in the Circuit Court of Arlington County seeking $123, 000 in damages. ( Id. ¶ 17.) Simplex timely removed to this Court. (Notice of Removal [Dkt. 1] ¶ 3.) Simplex now moves to dismiss the action, arguing that it had no obligation to perform work within a specified time period and therefore could not have breached any obligation to T&B. (Def.'s Mem. in Supp. [Dkt. 4] at 5.) For the reasons that follow, the Court denied the motion.
II. Legal Standard
"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint[.]" Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citation omitted). The Supreme Court has stated that in order "[t]o survive a motion to dismiss, a [c]omplaint 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, 570 (2007)). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The issue in resolving such a motion is not whether the non-movant will ultimately prevail, but whether the non-movant is entitled to offer evidence to support his or her claims.
"Determining whether a complaint states a plausible claim for relief [is]... a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679 (citations omitted). To survive a motion to dismiss, a plaintiff's complaint must demand more than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555. Legal conclusions couched as factual allegations are not sufficient. Twombly, 550 U.S. at 555. Hence, a pleading that offers only "formulaic recitation of the elements of a cause of action will not do." Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 557. Nor will a complaint that tenders mere "naked assertion[s]" devoid of "further factual enhancement." Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 557.
Moreover, the plaintiff does not have to show a likelihood of success on the merits. Rather, the complaint must merely allege - directly or indirectly - each element of a "viable legal theory." Twombly, 550 U.S. at 562-63.
At the outset, the Court must determine which law to apply here. See Zaklit v. Global Linguist Solutions, LLC, No. 1:14cv314, 2014 WL 3109804, at *4 (E.D. Va. July 8, 2014) ("Before reaching the merits of Plaintiffs' claims, the Court must first address the important question of the applicable choice of law."). Simplex contends Virginia law applies, as this case was removed to this Court from Virginia state court on the basis of diversity jurisdiction. (Def.'s Mem. in Supp. at 4 n.2.) T&B argues that pursuant to paragraph 30 of the purchase order,  Massachusetts law governs. (Pl.'s Opp. [Dkt. 6] at 4.)
As a federal court sitting in diversity, this Court must apply the choice of law rules of the forum state - in this case, Virginia. See Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 623-24 (4th Cir. 1999). "Virginia law looks favorably upon choice of law clauses in a contract, giving them full effect except in unusual circumstances." Id.; see Faltings v. Int'l Bus. Mach. Corp., No. 87-1123, 1988 WL 83316, at *3 (4th Cir. Aug. 4, 1988) (stating that under Virginia law, choice-of-law provisions are enforced unless there was no reasonable basis for the parties' choice or where one of the parties was misled into agreeing to the provision). Here, there are no "unusual circumstances" that would displace the parties' choice of Massachusetts law. Therefore, Massachusetts law will govern the interpretation of the purchase order.
Under Massachusetts law, the elements of a breach of contract are: "(1) the existence of a valid and binding contract, (2) that the defendant breached the terms of the contract, and (3) plaintiff has suffered damages from the breach." Pizzeria Uno Corp. v. Pizza By Pubs, Inc., No. 09-12015-DJC, 2011 WL 4020845, at *3 (D. Mass. Sept. 9, 2011). Simplex argues the complaint should be dismissed because T&B has not demonstrated that Simplex breached any duty owed to it under the contract. Specifically, Simplex argues that the purchase order did not require it to ...