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Sutherland Global Services, Inc. v. Olivedale, Inc.

United States District Court, W.D. Texas, Austin Division

March 29, 2018




         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Plaintiffs Sutherland Global Services, Inc. (SGS) and Sutherland Healthcare Solutions, Inc. (SHS) (collectively, Sutherland)'s Motion to Dismiss Defendants' Counterclaims [#30], Defendants Olivedale, Inc. (Olivedale) and 1 Mosaic Health, Inc. (Mosaic) (collectively, Defendants)' Response [#31] in opposition, and Sutherland's Reply [#34] thereto. Having reviewed the documents, the relevant law, and the file as a whole, the Court now enters the following opinion and orders.


         This is a contract dispute case related to a Master Service Agreement (MSA) executed by SGS and Defendants[1] on March 29, 2016. Compl. [#1-2] Ex. 1 (MSA). Under the MSA, SGS agreed to provide services pursuant to mutually agreed upon statements of work, and Mosaic agreed to pay for these services within 30 days of invoicing. See MSA at 2, 4-5. SHS, an affiliate of SGS, provided services to Defendants pursuant to numerous statements of work agreed upon by the parties. Compl. [#1] at ¶ 9. Sutherland contends it has fully complied with all terms and conditions of the parties' agreement, and Defendants have breached the MSA by failing to remit payment on 53 invoices. Id. at ¶¶ 13-15, 24-31. Sutherland provided Defendants written notice of their alleged breach on Mach 3, 2017, and eventually terminated the MSA on May 16, 2017, due to the unpaid invoices. Id. at ¶¶ 19-22.

         Sutherland initiated this lawsuit on June 20, 2017, asserting a single claim for breach of contract. Id. at ¶¶ 24-31. Defendants Mosaic and Olivedale initially filed separate answers on September 12, 2017. See Mosaic Answer [#14]; Olivedale Answer [#15]. On January 31, 2018, Defendants filed an amended answer to which they added counterclaims for fraudulent inducement and negligent hiring, training, supervision, and retention. See Am. Answer [#28].

         Sutherland moves to dismiss Defendants' counterclaims under Rule 12. See Mot. Dismiss [#30]. Sutherland's motion has been fully briefed and is ripe for consideration.


         I. Legal Standard

         Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A motion under Federal Rule of Civil Procedure 12(b)(6) asks a court to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, the plaintiff must plead sufficient facts to state a claim for relief that is facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 566 U.S. at 678. Although a plaintiffs factual allegations need not establish the defendant is probably liable, they must establish more than a "sheer possibility" a defendant has acted unlawfully. Id. Determining plausibility is a "context-specific task, " and must be performed in light of a court's "judicial experience and common sense." Id. at 679.

         In deciding a motion to dismiss under Rule 12(b)(6), a court generally accepts as true all factual allegations contained within the complaint. Leatherman v. Tarrant Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993). However, a court is not bound to accept legal conclusions couched as factual allegations. Papasan v. Attain, 478 U.S. 265, 286 (1986). Although all reasonable inferences will be resolved in favor of the plaintiff, the plaintiff must plead "specific facts, not mere conclusory allegations." Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994). In deciding a motion to dismiss, courts "must consider" the complaint, as well as other sources such as documents incorporated into the complaint by reference and matters of which a court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

         I. Application

         Sutherland argues Defendants' two counterclaims are untimely and should be dismissed for failure to state a claim under Rule 12(b)(6). As an initial matter, the Court notes the counterclaims are timely as the scheduling order permitted amendments to pleadings as of right through January 31, 2018. See Order of Nov. 15, 2017 [#22] at 2. The Court addresses the remaining arguments by counterclaim below.

         A. Fraudulent inducement

         Sutherland contends Defendants' fraudulent inducement claim fails to meet the Rule 9(b) heightened pleading standard. See Mot. Dismiss [#30] at 5-7. According to Sutherland, Defendants do not allege when, where, and how the alleged fraudulent statements were made, fail to explain how the statements are false, fail to allege any scienter, and also fail to allege harm caused by the statements. Id. Additionally, Sutherland avers the terms ...

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