                            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,           550        U.S.    544,     570     (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."        Id. at 563.

       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.,     525       F.3d       8,     17     (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,

129 S. Ct. 1937, 1949           (2009)       (quoting Twombly,               550 U.S. at 557)

(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.,      251 F.        Supp.     2d 77,        100       (D.D.C.          2003)        (citing R · & A,
                                                   -7-
    Inc.   v.     Kozy Korner,          Inc.,     672   A.2d        1062,      1066       (D.C.       1996);

Hercules          &    Co.    v.   Shama Rest.       Corp.,         613 A.2d 916,               923    (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.,

961        A.2d       1080,     1089     (D.C.    2008);          see     also     Ulliman        Schutte

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

No. 02 Civ. 1987 (RMC), 2006 WL 1102838, 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,         961    A. 2d at       1089       (citing Bragdon v.               2512

Assocs. Ltd. P'ship, 856 A.2d 1165, 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,        961    A.2d     at    1089

    (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., 512 F.2d 527,
547-49 (D.C. Cir. 1975) rev'd on other grounds, 426 U.S. 290
 (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., 961 F. Supp. 305, 309 (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.,       274 F.       Supp.    2d 86,       105    (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, 961 A.2d at 1089 (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,                 783 F. Supp.          2d

147, 153      (D.D.C. 2011)      (emphasis added)      (citing Furash         &   Co. v.

McClave, 130 F. Supp. 2d 48, 57 (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, 783 F. Supp. 2d at 153 (citing B & W Mgmt.,
Inc. v. Tasea Inv. Co., 451 A.2d 879, 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.,     70       F.3d     524,        529     (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,          2013   WL     5327516,         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,           392 A.2d 1008,               1012         (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,               933 F.           Supp.       2d 1,    6       (D.D.C.    2013)

(citing cases); see also Baltimore v. Dist. of Columbia, 10 A.3d

1141,     1155       (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),     2005 WL 3244192,             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.,              61 A.3d 662,        678    (D.C. 2013)

    (emphasis added)       (citing Bowler v.           Joyner,     562 A. 2d 1210,         1212

    (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), 2011 WL 1137297, at *7
(D.D.C. Mar. 27, 2011).

                                              -19-
Kaempe v.             Myers,         367     F.3d    958,     964   (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, 922 F.2d 60, 71 (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., 720 A.2d 275 (D.C. 1998)

and Chambers v.              NASCO,    Inc.,     501 U.S.        32,   50     (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, 501 U.S.

at 43-55; 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, 501 U.S.

at 50).

        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,     257     F.3d    815,     821      (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., 136 F. 3d 830, 836                      (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,        9 N.Y.3d 69, 83      (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




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