                           UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA

__________________________________________
                                                   )
In the Matter of the                               )
FORT TOTTEN METRORAIL CASES                        )
Arising Out of the Events of June 22, 2009         )
                                                   )
                                                   )
LEAD CASE: Jenkins v. Washington                   )
Metropolitan Area Transit Authority, et al.        )
                                                   )
THIS DOCUMENT RELATES TO:                          )
ALL CASES                                          )
                                                   )
                                                   )       Case No. 10-mc-0314 (RBW)
                                                   )
                                                   )
ARINC, INC.,                                       )
                                                   )
              Third-Party Plaintiff,               )
                                                   )
                      v.                           )
                                                   )
WASHINGTON METROPOLITAN AREA                       )
TRANSIT AUTHORITY,                                 )
                                                   )
              Third-Party Defendant.               )
                                                   )


                                MEMORANDUM OPINION

       This case is currently before the Court on two motions directed at ARINC, Incorporated’s

(“ARINC”) cross-claim and third-party complaint. The first is the Washington Metropolitan

Area Transit Authority’s (“WMATA”) motion to dismiss Count I (Breach of Contract and

Implied Duty of Good Faith and Fair Dealing) and Count III (Contractual Indemnification) of

ARINC’s cross-claim, or alternatively, to strike ARINC’s request for attorneys’ fees pursuant to

Federal Rules of Civil Procedure 12(b)(6) and 12(b)(f). See generally Defendant Washington
Metropolitan Area Transit Authority’s Motion for Partial Dismissal of ARINC, Inc.’s Cross-

Claim or, in the alternative, Motion to Strike (“WMATA’s Cross-Claim Mot.”). The second is

WMATA’s motion to dismiss ARINC’s Third-Party Complaint pursuant to Federal Rule of Civil

Procedure 12(b)(6). See generally Defendant Washington Metropolitan Area Transit Authority’s

Motion to Dismiss ARINC, Inc.’s Third-Party Complaint. For the reasons that follow, both

WMATA’s motion to dismiss Count I and III of the cross-claim and its motion to dismiss

ARINC’s Third-Party Complaint in its entirety will be granted. These rulings moot WMATA’s

motion to strike ARINC’s request for attorneys’ fees.

                                                      I. Background

         This case arises out of the collision of two WMATA trains that resulted in the death and

injury of multiple passengers and the operator of one of the two trains. On December 17, 2010,

ARINC, one of the several defendants in this case, filed a cross-claim against WMATA

primarily alleging WMATA’s liability based on a contract between the two entities. 1 See

Defendant ARINC, Inc.’s Cross-Claim Against Defendant WMATA (“Cross-Claim”) at 1-10.

“The claims asserted in the [plaintiffs’] Complaint against ARINC relate to the ARINC

Advanced Information Management software platform (‘AIM system’),” 2 id. ¶ 9, which “[i]n

July 2003, ARINC” was responsible for installing as an upgrade of WMATA’s existing system,

id. This resulted in ARINC and WMATA entering into a “Conformed Contract,” an agreement




1
  The cross-claim was filed by ARINC against WMATA in regard to the Second Amended Master Complaint filed
by the plaintiffs. The Third-Party Complaint filed by ARINC against WMATA concerns a separate complaint filed
on behalf of the Estate of Jeanice McMillan, the train operator employed by WMATA who was killed in the
accident at issue in this case.

2
 The AIM system is a “supervision and control system” that “was designed to provide . . . information . . .
ne[cessary] to monitor traffic flow around the railway and to respond to events such as isolated equipment failures.”
Cross-Claim ¶¶ 17-18.
                                                          2
that “governs the entire relationship between ARINC and WMATA regarding the sale, licensing

and maintenance of the AIM system.” Id. ¶ 12.

       In its cross-claim, ARINC has alleged WMATA’s liability in four different counts, two

of which are the subject of WMATA’s motion to dismiss: Count I (Breach of Contract and of

Implied Duty of Good Faith and Fair Dealing) see id. ¶¶ 52-56; and Count III (Contractual

Indemnification) see id. ¶¶ 62-65. Count I specifically alleges that WMATA breached the

Conformed Contract and the implied duty of good faith and fair dealing “by requesting,

suggesting and/or encouraging [the p]laintiffs to sue ARINC for the June 22, 2009 accident.” Id.

¶¶ 54, 55. Included in Count I is a request for attorneys’ fees. See id. ¶ 56. Count III alleges

that “[s]hould ARINC be held liable to [the p]laintiffs in excess of the specified liability

limitation, WMATA is liable to ARINC for indemnification for all damages entered against

ARINC in excess of that limitation of liability.” Id. ¶ 65.

       ARINC also filed a Third-Party Complaint against WMATA on December 17, 2010. See

Defendant ARINC Inc.’s Third-Party Complaint Against WMATA (“Third-Party Compl.”) at 1-

12. “ARINC’s Third-Party Complaint seeks recovery from WMATA in connection with the

action filed against in on behalf of [the Estate of] Jeanice McMillan, an employee of WMATA

who was killed in the Metrorail accident of June 22, 2009.” Id. at 1. Similar to the cross-claim,

the Third-Party Complaint primarily alleges liability arising out of the Conformed Contract.

ARINC alleges liability in its Third-Party Complaint through three different counts: Count I

(Breach of Contract and of Implied Duty of Good Faith and Fair Dealing) see id. ¶¶ 54-58;

Count II (Equitable Indemnification) see id. ¶¶ 59-63; and Count III (Contractual




                                                 3
Indemnification) see id. ¶¶ 64-67. These claims are essentially identical to those pleaded in the

cross-claim. 3

                                                 II. DISCUSSION

         A Rule 12(b)(6) motion to dismiss “tests not whether the plaintiff will prevail on the

merits, but instead whether the plaintiff has properly stated a claim” upon which relief may be

granted. Woodruff v. DiMario, 197 F.R.D. 191, 193 (D.D.C. 2000). For a complaint to survive

a Rule 12(b)(6) motion, it need only provide “a short and plain statement of the claim showing

that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), which accomplishes the dual

objectives of “giv[ing] the defendant fair notice of what the . . . claim is and the grounds upon

which it rests,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted).

“Although detailed factual allegations are not necessary to withstand a Rule 12(b)(6) motion to

dismiss, to provide the grounds of entitlement to relief, [the] plaintiff must furnish more than

labels and conclusions or a formulaic recitation of the elements of a cause of action.” Hinson ex

rel N.H. v. Merritt Educ. Ctr., 521 F. Supp. 2d 22, 27 (D.D.C. 2007) (quoting Twombly, 550

U.S. at 555) (internal quotation marks omitted). Accordingly, the plaintiff should provide the

opposing party and the court with facts sufficient “to raise a right to relief above the speculative

level,” Twombly, 550 U.S. at 555, in order to permit the court to “draw [a] reasonable inference

that the defendant is liable for the misconduct alleged, see id. at 556.

          A. WMATA’s Motion to Dismiss Counts I and III of ARINC’s Cross-claim

         The issue presented to the Court by WMATA’s motion to dismiss Counts I and III of

ARINC’s cross-claim is whether these claims can be maintained, and if so, whether the Court

should grant WMATA’s motion to strike ARINC’s request for attorneys’ fees. WMATA argues


3
 The only significant difference is that the cross-claim includes a claim for Contribution, see Cross-Claim at 13,
while the Third-Party Complaint does not.
                                                          4
that (1) Count I fails to state a claim because it was under no duty to refrain from informing the

plaintiffs about ARINC’s potential involvement in the accident; (2) Count III fails to state a

claim because it never agreed to indemnify ARINC; and (3) even if neither count is dismissed,

there is no legal basis for ARINC being awarded attorneys’ fees. WMATA’s Cross-Claim Mot.

at 2-3.

      1. Count I (Breach of Contract and Implied Duty of Good Faith and Fair Dealing)

          Count I of ARINC’s cross-claim fails to allege the necessary elements of breach of a

contract. “In the case of a claim for breach of contract, the complaint must allege four necessary

elements in order to effect fair notice: (1) a valid contract between the parties; (2) an obligation

or duty arising out of the contract; (3) a breach of that duty; and (4) damages caused by [the]

breach.” Ihebereme v. Capital One, N.A., 730 F. Supp. 2d 40, 47 (D.D.C. 2010) (internal

quotation marks omitted). It is particularly important to note that “one cannot breach a contract

without breaching a particular obligation created under the contract.” Id.

          ARINC alleges that “WMATA . . . breached the provisions of the Conformed Contract

addressing (1) the purpose of the AIM system; and (2) the parties’ responsibility for deficiencies

under General Provisions.” Cross-claim ¶ 53. ARINC contends that “WMATA breached these

provisions by requesting, suggesting and/or encouraging [the p]laintiffs to sue ARINC.” Id. ¶

54. However, the contractual obligations arising out of these two provisions of the Conformed

Contract have no bearing on WMATA’s decision to inform the plaintiffs that ARINC may be

partially liable for the accident. In fact, WMATA was under an obligation imposed by the Court

to provide the plaintiffs with a list of potential parties who might have liability for the metrorail

accident. October 6, 2009 Order (Walton, J). Specifically, in the October 6, 2009 Order, this

Court instructed WMATA to “compile a list of the mechanisms, software or other components of


                                                 5
[the metrorail] system that may have contributed to the Metro Red Line train crash and the

entities or individuals that may have been responsible for producing and/or maintaining those

components.” Id. at 2. These circumstances clearly do not support a finding that WMATA

breached any obligation arising under the two provisions of the Conformed Contract relied upon

by ARINC.

        Count I of the cross-claim also fails to show how WMATA breached the implied duties

of good-faith and fair-dealing. ARINC alleges that “WMATA has failed to act in good[-]faith by

seeking the addition of ARINC as a [d]efendant in this action when WMATA knew that the AIM

system is not and could not be responsible for the accident.” Cross-claim ¶ 55. Again, WMATA

was under a Court-imposed obligation to provide the plaintiffs with a list of parties potentially

liable for the metrorail accident. ARINC has therefore failed to show that WMATA acted in bad

faith by identifying it as a potential defendant in this case.

        For the foregoing reasons, Count I of ARINC’s cross-claim will be dismissed.

Furthermore, the Court’s holding renders the issue as to whether ARINC is entitled to attorneys’

fees as to this count moot.

                           2. Count III (Contractual Indemnification)

        Count III of ARINC’s cross-claim, alleging contractual indemnification, has no legal

support under the contract entered into between ARINC and WMATA. ARINC alleges that

“[s]hould [it] be held liable to [the p]laintiffs in excess of the specified liability limitation [in the

parties’ contract], WMATA is liable to ARINC for indemnification,” and points to Paragraph 5

of the contract as support of its claim for indemnification. Cross-claim ¶¶ 63-65. That provision

provides:




                                                   6
        LIMITATION OF LIABILITY

        In no event shall ARINC be liable for any legal theory of loss of profits, revenue,
        use, data or any other pecuniary cost, whether or not ARINC has been advised of
        the possibility of such damages . . .

        Without limiting the effect of the above, ARINC’s or any affiliate’s liability, if
        any, for damages (including, but not limited to, liability arising out of contract,
        negligence, unintentional misrepresentation, strict liability in tort or warranty of
        any kind) shall not exceed five (5) million dollars in addition to any claim under
        the insurance coverage specified in Special Provisions, Paragraph 16.

Memorandum In Support of WMATA’s Motion for Partial Dismissal of ARINC, Inc.’s Cross-

Claim Or, In The Alternative, Motion to Strike (“WMATA’s Cross-Claim Mem.”), Ex. 1 (AIM

Software License Agreement) at 2. 4

        Notably, the provision does not include the terms “indemnify” or “indemnification.”

Moreover, the scope of the provision appears to apply only to liability limitations involving

disputes between ARINC and WMATA, as it only discusses the potential liability between the

two entities as opposed to providing indemnification for third-party liability. See id. ARINC

claims that inclusion of the term “indemnify” in the provisions it is relying upon is unnecessary;

however, in each of the cases relied upon by ARINC in its memorandum, the contractual

provision at issue included the term “indemnify.” See N.P.P. Contractors, Inc. v. John Canning

& Co., 715 A.2d 139, 140 (D.C. 1998) (interpreting an agreement that included the clause “shall

indemnify and save harmless”); Grunley Constr. Co., Inc. v. Conway Corp., 676 A.2d 477, 478

(D.C. 1996) (interpreting an agreement that also included the clause “shall indemnify and save

harmless”); W.M. Schlosser Co., Inc. v. Maryland Drywall Co., Inc., 673 A.2d 647, 653 (D.C.

1996) (interpreting an agreement that included the clause “shall promptly indemnify and save

4
  The Court notes that it may consider this document without converting the motion to one for summary judgment
because ARINC referenced it in its cross-claim. Savage v. Scales, 310 F. Supp. 2d 122, 129 n.8 (D.D.C. 2004)
(explaining that, “where a document is referred to in the complaint and is central to plaintiff’s claim, such a
document attached to the motion papers may be considered without converting the motion to one for summary
judgment” (internal quotation marks omitted)).
                                                       7
and hold harmless”); Am. Bldg. Maint. Co. v. L’Enfant Plaza Props., Inc., 655 A.2d 858, 860

(D.C. 1995) (interpreting an agreement that included the clause “shall indemnify and hold

harmless”).

        Interestingly, an indemnification agreement similar to those found in the above-

mentioned cases was included in the contract between WMATA and ARINC, but it is for the

benefit of WMATA. See WMATA’s Cross-Claim Mem., Ex. 5 (WMATA Supply and Service

Contract) ¶ 15 (“The Contractor [ARINC] will save and keep harmless and indemnify WMATA

against any and all liability claims . . . .”). Therefore, it is clear that had the parties intended to

include a provision whereby WMATA was obligated to indemnify ARINC for third-party

liability (or for any form of liability), the parties would have included a provision expressly

imposing such an obligation.

        Accordingly, Count III of the cross-claim is dismissed.

               B. WMATA’s Motion to Dismiss ARINC’s Third-Party Complaint

        As to WMATA’s motion to dismiss ARINC’s Third-Party Complaint, WMATA argues

that (1) Count I (Breach of Contract and of Implied Duty of Good Faith and Fair Dealing) fails to

state a claim because WMATA was under no duty to refrain from informing the plaintiffs about

ARINC’s potential involvement in the accident; 5 and (2) the District of Columbia Workers’

Compensation Act’s exclusivity provision bars ARINC’s claims for indemnification asserted in

Counts II (Equitable Indemnification) and III (Contractual Indemnification). Memorandum In

Support of WMATA’s Motion to Dismiss ARINC, Inc.’s Third-Party Complaint (“WMATA’s

Third-Party Compl. Mem.”) at 5, 11.

5
  With respect to Count I, WMATA states that “[t]he arguments set forth in the Motion to Dismiss ARINC’s Cross-
Claim are equally applicable to the identical count set forth in the Third-Party Complaint. . . . WMATA expressly
adopts and incorporates those arguments (located at pages 9 - 17 of the Memorandum in Support of WMATA’s
Motion for Partial Dismissal of ARINC’s Cross-Claim or, in the alternative, Motion to Strike) in support of this
Motion.” WMATA’s Third-Party Compl. Mem. at 11.
                                                        8
      1. Count I (Breach of Contract and Implied Duty of Good-Faith and Fair-Dealing)

   Because Count I of the Third-Party Complaint is identical to Count I of ARINC’s cross-

claim, there is no need for the Court to repeat its analysis of that issue again here. See supra Part

II.A (reasoning that Count I of the cross-claim must be dismissed because ARINC has failed to

show how WMATA breached the contract or the duty of good faith and fair dealing). Count I of

the Third-Party Complaint is therefore dismissed for the same reasons.

        2. Counts II (Equitable Indemnification) and III (Contractual Indemnification)

       Counts II and III of the Third-Party Complaint must be dismissed as a matter of law.

While the claims are identical to Counts II and III of ARINC’s cross-claim, the analysis required

in the context of WMATA’s motion to dismiss is different because the Third-Party Complaint

implicates the District of Columbia Workers’ Compensation Act (“Act”), D.C. Code §§ 32-1500

to -1504. (2005). See Myco Inc. v. Super Concrete Co. Inc., 565 A.2d 293, 295-96 (D.C. 1989)

(“The triadic relationship between an employer, an injured or deceased employee, and a third[-]

party is governed by the [Act] . . .”). “Because an employee is prevented from seeking a tort

award from the employer, and because workers’ compensation benefits often fall far short of

those potential awards, suing the third-party becomes an attractive alternative to make up the

difference.” Id. at 296 (internal citations omitted). That is precisely what occurred in this case:

the estate of Ms. McMillan (the deceased WMATA employee) filed suit against ARINC (the

third-party) in addition to seeking a workers’ compensation award from WMATA (the

employer).

       “[W]hen the third party, to protect against an adverse monetary judgment, seeks

indemnity from the employer for having contributed to or caused the injury for which the




                                                 9
employee seeks damages, that cause of action runs head-on into the exclusivity provision of the

Act.” Id. at 297. This exclusivity provision provides:

       The liability of an employer prescribed in § 32-1503 shall be exclusive
       and in the place of all liability of such employer to the employee, his legal
       representative, spouse or domestic partner, parents, dependents, next of
       kin, and anyone otherwise entitled to recover damages from such
       employer at law on account of such injury or death.

D.C. Code § 32-1504(a). “[T]he exclusivity provisions of state workers’ compensation statutes

are generally held to preclude indemnity in all but a few specified instances.” Myco, 565 A.2d at

297. For example, “when the third party’s claim against the employer is for indemnity pursuant

to an express contractual provision, the exclusivity provisions of workers’ compensation laws do

not bar the indemnification.” Id. Similarly, equitable indemnification is permitted “when the

indemnity is based on a special legal relationship existing separate and apart from any liability

which the employer might have had to the injured employee.” Id. at 299.

       Here, ARINC alleges contractual indemnification in Count III of the Third-Party

Complaint.   However, as discussed previously, the Conformed Contract does not obligate

WMATA to indemnify ARINC for third-party liability. See supra Part II.B. Although the Act

does not prohibit claims for contractual indemnification, ARINC has failed to show the existence

of any such contractual provision. For this reason, Count III must be dismissed.

       ARINC alleges in Count II that it is entitled to equitable indemnification. See Third-

Party Compl. ¶¶ 59-63. In response, WMATA argues that “ARINC has not, and indeed cannot,

allege a special legal relationship between it and WMATA that would sustain an equitable

indemnity claim that would not offend the exclusivity remedy provisions of the Act.”

WMATA’s Third-Party Compl. Mem. at 10. In support of its argument, WMATA relies on the

District of Columbia Court of Appeals decision in Myco, 565 A.2d at 299-300.


                                               10
       In Myco, an employee was electrocuted and killed when using a power washer. Id. at

294. The employee’s wife not only filed a workers’ compensation claim against the decedent’s

employer, but also filed a wrongful death action against the third-party manufacturer of the

power washer. Id. The manufacturer then filed a third-party complaint against the employer,

claiming that the employer “owed it a legal duty to use and maintain the power washer so as to

prevent injury and protect [the manufacturer] from any future legal action.” Id. at 299 (internal

quotation marks omitted). The District of Columbia Court of Appeals rejected the argument,

however, reasoning that “[t]he employer’s duty of proper use and care of the [manufacturer’s

product] extends solely to its employees.” Id. at 300. The court therefore dismissed the claim

for equitable indemnification concluding that “[a]bsent a much closer relationship than that

which exists between the parties here, any other determination would be stretching the concept

of contract out of all relation to reality.” Id. (internal quotation marks and citation omitted).

       ARINC attempts to distinguish the present case from Myco, analogizing the facts in this

case to those in Howard University. v. Good Food Services, Inc., 608 A.2d 116 (D.C. 1992). In

Howard University, a food service company “contracted to operate the University’s food service

facilities.” Id. at 118. As part of the contract, the company “had day-to-day responsibilities such

as keeping the kitchen facilities clean, supervising [its] employees in the kitchens, and

implementing University food service policies.” Id. at 119. An employee of the company, who

was injured while using a utensil in the University’s kitchen, filed a workers’ compensation

claim against the company, and also filed a negligence claim against the University. Id. The

University, in turn, “filed a third-party complaint against [the company] . . . seeking

indemnification.” Id. The court found that a special legal relationship existed between the

University and the company, which permitted a claim for equitable indemnification to go


                                                 11
forward. 6 Id. at 124. In reaching its conclusion, the Howard University court found that

“[u]nlike the situation in Myco, which involved a one-time sale of equipment with follow-up

service, the [food service company and the University] had an ongoing and comprehensive

contractual relationship involving day-to-day interaction and decision making.” Id.

        Here, because the relationship between ARINC and WMATA is analogous to the facts in

Myco, and not those in Howard University, Count III of ARINC’s cross-claim will be dismissed.

While it is true, as ARINC points out, that “[t]he Conformed Contract states that WMATA

personnel are responsible for maintenance of the AIM system,” ARINC’s Opposition to Motion

to Dismiss Third-Party Complaint at 9, that responsibility created a relationship materially

distinguishable from the contractual relationship that existed in Howard University where there

were day-to-day obligations and responsibilities between the two parties. Instead, similar to the

employer in Myco, WMATA’s duty of proper use and care of ARINC’s product only extends to

its employees, not to ARINC. See Myco, 565 A.2d at 300 (“The employer’s duty of proper use

and care of the [manufacturer’s product] extends solely to its employees.”). Accordingly, the

relationship between ARINC and WMATA “involved a one-time sale of equipment with follow-

up service,” rather than “an ongoing and comprehensive contractual relationship involving day-

to-day interaction and decisionmaking.” See Howard University, 608 A.2d at 124.

        For the foregoing reasons, Counts II and III of ARINC’s Third-Party Complaint must be

dismissed.




6
 Even though the court found the potential for equitable indemnification, the University’s claim for indemnification
was later denied on separate grounds. Id. at 125.
                                                        12
                                               III. Conclusion

          For the reasons set forth above, WMATA’s motion to dismiss Counts I and III of

ARINC’s cross-claim is granted. Count I of the cross-claim is dismissed because it fails to state

a claim as a result of ARINC’s failure to show how WMATA breached a duty it owed to ARINC

when it informed the plaintiffs about ARINC’s potential liability when WMATA was under an

obligation imposed by the Court to inform the plaintiffs of ARINC’s potential liability. The

dismissal of Count I of ARINC’s cross-claim renders its claim for attorneys’ fees moot. Count

III of the cross-claim is also dismissed because it fails to state a claim as WMATA had no

contractual obligation to indemnify ARINC.

          Finally, WMATA’s motion to dismiss ARINC’s Third-Party Complaint in its entirety is

granted. Count I of the Third-Party Complaint is dismissed because it fails to state a claim for

the same reasons Count I of the cross-claim fails to do so. Counts II and III of the Third-Party

Complaint are both dismissed as Count II is barred by the District of Columbia Workers’

Compensation Act and ARINC has failed to show the existence of any contractual

indemnification provision, which is required for the advancement of Count III. 7

          SO ORDERED this 2nd day of September, 2011.

                                                                     REGGIE B. WALTON
                                                                     United States District Judge




7
    A separate Order will be issued contemporaneously with this Memorandum Opinion.
                                                      13
