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Bernardo v. Continental Service Group

June 30, 2010


The opinion of the court was delivered by: Padova, J.


Plaintiff Nick Bernardo t/a Net Gain Marketing ("Net Gain") has filed a breach of contract action against Defendant Continental Service Group, Inc. ("ConServe"). Essentially, Net Gain alleges that ConServe breached a contract by discontinuing payment of "bonus" fees under the contract. ConServe has filed a Motion to Dismiss Plaintiff's Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6). For the following reasons, we deny the Motion in its entirety.


The Complaint alleges that on June 9, 2004, Net Gain and ConServe entered into a written contract ("the Agreement") pursuant to which Net Gain would assist ConServe in preparing a bid for collections work with the U.S. Department of Education ("ED"). (Compl. ¶¶ 6, 8.) The contours of the work on which ConServe was bidding was set forth in a task order (the "2004 Task Order"). (See id. ¶ 8.) As a result of the services that Net Gain provided pursuant to the Agreement, ConServe was the prevailing bidder on the 2004 Task Order. (Id. ¶ 9.)

The Agreement provides, among other things, that Net Gain shall be paid a "Bonus" of 2.5% of the actual receipts arising from ConServe's work pursuant to the 2004 Task Order. (Id. ¶ 10.)

The Bonus is "due and payable within 30 days of the completion of each calendar month, until the task order is subsequently re-bid and accounts placed under the current task order are recalled." (Id.) Despite the time frame established in the "Bonus" provision, a "Term" provision in the Agreement further states that the "arrangement shall terminate upon the later of the end of the task order or thirty (30) months."*fn1 (Agreement at 1.)

The work performed by ConServe for ED as provided in the 2004 Task Order is done pursuant to terms set forth in a "Statement of Work." (Compl. ¶ 11.) In 2008, the 2004 Task Order was re-bid and ConServe received a new task order from ED (the "2008 Task Order"). (Id. ¶ 12.) The Complaint alleges that the Statement of Work allows ConServe to retain accounts that it was servicing under the 2004 Task Order, and ConServe has done so. (Id. ¶ 13.) As a result, according to the Complaint, ConServe continues to collect funds for accounts under the 2004 Task Order and to "enjoy revenue" from those collections. (Id.) Indeed, the Complaint alleges that ConServe can "recognize revenue separately" under the 2004 and 2008 Task Orders. (Id. ¶ 14.)

Nevertheless, on December 17, 2009, ConServe wrote to Net Gain to notify it of the end of the Agreement effective September 30, 2009. (Id. ¶ 16.) Although ConServe, after September 30, 2009, made two final bonus payments to Net Gain from revenue it earned under the 2004 Task Order, it has refused to make any further bonus payments. (Id. ¶¶ 17-18.)

The Complaint contains two Counts. In Count I, Net Gain asserts a breach of contract claim against ConServe based on ConServe's discontinuation of bonus payments under the 2004 Task Order. (Id. ¶ 20.) Net Gain estimates that it is owed bonus payments in excess of $150,000. (Id. ¶ 21.) In Count II, Net Gain asserts a claim of Accounting, in which it seeks detailed information regarding revenue that ConServe has received from ED under the 2004 Task Order. (Id. ¶ 23.)

In its Motion to Dismiss, ConServe seeks to dismiss both Counts of the Complaint. With respect to Count I (breach of contract), it argues that the 2004 Task Order ended on September 30, 2009, and that pursuant to the Agreement's Term clause, the Agreement and all obligations to make bonus payments under the Agreement terminated on September 30, 2009 as well. (Def.'s Mem. in Supp. of Mot. to Dismiss, at 7.) In support of this argument, ConServe relies heavily on the text of the 2004 Task Order, a copy of which it attaches to its pleadings.*fn2 With respect to Count II, ConServe asserts that dismissal is appropriate because Accounting is not an independent cause of action but, rather, is merely an equitable remedy.


In considering a motion to dismiss under Rule 12(b)(6), a district court must "'accept all factual allegations as true [and] construe the complaint in the light most favorable to the plaintiff,'" Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)), and must accept all reasonable inferences that can be drawn from the facts alleged in the complaint. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). In order to survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, -- U.S. --, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). To be facially plausible, a claim must include "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).


As noted above, ConServe moves to dismiss both Counts of the Complaint. For the following reasons, we deny ...

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