United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
H. MILLER, SENIOR UNITED STATES DISTRICT JUDGE
before the court is plaintiff Global Governance Advisors,
Inc.'s (“GGA”) motion to dismiss
Defendants' counterclaims. Dkt. 19. Defendants responded.
Dkt. 20. Having considered the motion, response, and
applicable law, the court is of the opinion that GGA's
motion (Dkt. 19) should be DENIED.
2015, GGA and defendant Kingdom Technologies Worldwide, LLC
(“KTW”) entered into a Joint Venture Agreement
(“JVA”) to purchase storage space at a tank farm
for petroleum products. Dkt. 15-1 at 2 (original
counterclaim). Under the JVA, GGA and KTW were to act as
middlemen by buying petroleum products and storing them at a
tank farm until the products could be sold at a profit.
See Dkt. 1 at 3. The JVA required GGA to
“utiliz[e] its contacts, expertise and financial
resources to establish and maintain the total funding
requirements necessary for the transactional cost to proceed
in leasing a third Party Tank Farm lease, Logistic
requirements and inspection services.” Dkt. 15-1 at 2.
time later, the parties' deal went south. At least one of
GGA's attempted wire transfers was unsuccessful, and
payment did not reach the parties' chosen tank farm.
Id. As a result, the parties failed to procure a
lease on tank farm storage space and the joint venture failed
to resell any petroleum products. Id.
subsequently filed suit against KTW and other defendants,
bringing a myriad of tort and contract-based claims. Dkt. 1.
KTW filed counterclaims against GGA, claiming breach of
contract and breach of fiduciary duty. Dkt. 15-1. GGA now
moves to dismiss both of KTW's counterclaims, arguing
that KTW has failed to state a claim as to both of its causes
of action. Dkt. 19.
Rule of Civil Procedure 8(a)(2) requires only ‘a short
and plain statement of the claim showing that the pleader is
entitled to relief.'” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65 (2007).
In considering a Rule 12(b)(6) motion to dismiss a complaint,
courts generally must accept the factual allegations
contained in the complaint as true. Kaiser Aluminum &
Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982). The court does not look beyond
the face of the pleadings in determining whether the
plaintiff has stated a claim under Rule 12(b)(6). Spivey
v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).
“[A] complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, [but] a
plaintiff's obligation to provide the ‘grounds'
of his ‘entitle[ment] to relief' requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”
Twombly, 550 U.S. at 555 (citations omitted). The
“[f]actual allegations must be enough to raise a right
to relief above the speculative level.” Id.
The supporting facts must be plausible-enough to raise a
reasonable expectation that discovery will reveal further
supporting evidence. Id. at 556.
contends that GGA breached its contractual duty by failing to
provide funding to procure a lease on tank farm storage. Dkt.
15-1 at 2-3. KTW also contends that GGA breached its
fiduciary duty to KTW by “misrepresenting its ability
and access to contacts and resources to secure a tank farm
lease.” Id. at 3. The parties agree that Texas
substantive law applies. Dkt. 19 at 5; Dkt. 20 at 5.
Breach of Contract
GGA contends that KTW has failed to state a claim for breach
of contract. Under Texas law, the elements of a breach of
contract claim are: (1) a valid contract; (2) the plaintiff
performed or tendered performance; (3) the defendant breached
the contract; and (4) the plaintiff was damaged as a result
of the breach. Smith Int'l, Inc. v. Egle Grp.,
LLC, 490 F.3d 380, 387 (5th Cir. 2007). GGA argues that
KTW's pleading fails to address the second and third
elements. Dkt. 19 at 5-6.
GGA's argument fails. First, KTW pled that it performed
its obligations under the contract. Specifically, KTW pled
that it “fulfilled its contractual duties by arranging
for resellers to purchase petroleum products from the joint
venture.” Dkt. 15-1 at 2. GGA claims that this pleading
is insufficient because it does not include “the
identities of the resellers, the purchase terms, or any
concrete factual allegations that there actually were
resellers ready and able to purchase product from the joint
venture.” Dkt. 19 at 5. However, pleadings need not
include such specificity. At the motion to dismiss stage, the
court must assume that all facts in the complaint are true.
Kaiser Aluminum & Chem. Sales, Inc., 677 F.2d at
1050. Here, KTW factually pled that it arranged for resellers
to purchase petroleum products, and the court must take this
assertion at face value.
KTW also sufficiently pled that GGA breached the parties'
contract. KTW's pleading states that GGA “breached
its contractual duties by failing to lease a third party tank
farm to store petroleum products for resale to the resellers
KTW arranged.” Dkt. 15-1 at 2. KTW also pled that GGA
“caused [the failed wire transfer] to fail” and
therefore “failed to consummate a lease with a viable
tank farm.” Dkt. 15-1 at 2. Again, the court must take
these factual allegations as true and draw all inferences in
favor of the non-movant. McLin v. Ard, 866 F.3d 682,
688 (5th Cir. 2017). If GGA did cause the wire transfer to
fail, and therefore failed to “establish and maintain
the total funding requirements necessary” to ...