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Clark Resources, Inc v. Verizon Business Network Services

April 29, 2011

CLARK RESOURCES, INC., PLAINTIFF
v.
VERIZON BUSINESS NETWORK SERVICES, INC., DEFENDANT



The opinion of the court was delivered by: (Chief Judge Kane)

MEMORANDUM

Before the Court is Defendant Verizon Business Network's motion to dismiss Plaintiff Clark Resources's amended complaint brought pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 22.) Plaintiff's claims arise from an alleged breach of contract related to a Pennsylvania Department of General Services Request for Proposal in which Defendant served as a general contractor and Plaintiff served as a subcontractor. This Court has jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). For the reasons stated herein, the Court will grant Defendant's motion in part.

I. BACKGROUND*fn1

A. Factual Background

Plaintiff's claims arise from the alleged existence of two contracts: (1) an agreement to perform subcontractor duties for Defendant ("performance contract"); and, in the alternative, (2) the existence of a contract to negotiate the terms of the subcontract in good faith. According to Plaintiff's amended complaint, on November 12, 2008, the Pennsylvania Department of General Services issued a Request for Proposal related to a telecommunications project. (Doc. No. 21 ¶ 5.) Defendant contacted Plaintiff to solicit Plaintiff's assistance in Defendant's bid for the project. (Id. ¶ 12.) The parties agreed to work exclusively together to submit a proposal to the Department. (Id. ¶ 14.) Pursuant to this agreement, Defendant informed Plaintiff of the scope of work needed on the subcontract and requested the information necessary to submit a proposal to the Department for the prime contract. (Id. ¶¶ 20-21.) In response to Defendant's request, Plaintiff produced a subcontract proposal in February 2009, indicating that it would supply Defendant with seven "helpdesk agents" for the project over the course of seven years at a total cost of $2,806,505. (Id. ¶ 24.) Defendant ultimately used Plaintiff's proposal when submitting its own proposal to the Department, and identified Plaintiff in the proposal as a certified minority business enterprise. (Id. ¶ 25.)

Plaintiff contends that prior to the ultimate award of the contract, Defendant provided Plaintiff with oral and written assurances that Defendant would use Plaintiff as a subcontractor on the project, contingent on the award from the Department. (Id. ¶¶ 27-30.) Plaintiff notes that Defendant referred to Plaintiff as a member of "the Verizon team" during Defendant's presentation to the Department. (Id. ¶ 32.) And Defendant "orally agreed to negotiate in good faith with Clark to enter into a final written subcontract for the Scope of Services if Verizon obtained an award of the prime contract from DGS." (Id. ¶¶ 16-17.) Plaintiff further contends that Plaintiff engaged in lobbying efforts in support of Defendant's proposal in exchange for Defendant's promise to use Plaintiff as a subcontractor on the project. (Id. ¶¶ 15, 22, 26, 31-32.)

On September 25, 2009, Defendant informed Plaintiff that it would only require two of Plaintiff's helpdesk agents to work on the project, rather than the seven Plaintiff had anticipated. (Id. ¶ 34.) Plaintiff concluded the reduced scope of work would render the subcontract unprofitable and refused to accept Defendant's offer. (Id. ¶¶ 36-37.) On September 28, 2009, Defendant reiterated its position that it would only require two full time staff to fulfill the subcontract, but indicated that it was "hopeful" that the parties would "be able to reach mutually acceptable terms for a subcontract agreement." (Doc. No. 21-1, Ex. K.) When Defendant's proposal was subsequently accepted by the Department on October 9, 2009, Defendant awarded the subcontract to another party. (Id. ¶ 40.)

B. Procedural History

Plaintiff commenced this suit on April 26, 2010, in the Court of Common Pleas for Dauphin County, Pennsylvania, asserting five causes of action based on Pennsylvania law.*fn2

(Doc. No. 1-2.) Defendant removed the action to this Court on May 24, 2010. (Doc. No. 1.) Following an unopposed motion for enlargement of time to respond, Defendant filed a motion to dismiss the complaint. (Doc. No. 6.) At the conclusion of briefing, the Court granted in part Defendant's motion to dismiss the first complaint and granted Plaintiff leave to file an amended complaint. (Doc. No. 18.) Plaintiff filed an amended complaint on December 13, 2010. (Doc. No. 21.) On January 3, 2011, Defendant filed a motion to dismiss the amended complaint in full. (Doc. No. 22.)

II. STANDARD OF REVIEW

A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint.

Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In reviewing a motion to dismiss, a court may "consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum, 361 F.3d at 221 n.3. The motion will only be properly granted when, taking all factual allegations and inferences drawn therefrom as true, the moving party is entitled to judgment as a matter of law. Markowitz v. Ne. Land Co., 906 F.2d 100, 103 (3d Cir. 1990). The burden is on the moving party to show that no claim has been stated. Johnsrud v. Carter, 620 F.2d 29, 33 (3d Cir. 1980). Thus, the moving party must show that Plaintiff has failed to "set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that those elements exist." Kost, 1 F.3d at 183 (citations omitted). A court, however, "need not credit a complaint's 'bald assertions' or 'legal conclusions' when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906, 908 (3d Cir. 1997). Indeed, the Supreme Court has held that while the 12(b)(6) standard does not require "detailed factual allegations," there must be a "'showing,' rather than a blanket assertion of entitlement to relief. . . . '[F]actual allegations must be enough to raise a right to relief above the ...


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