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Denuke Contracting Services, Inc. v. Energx

August 30, 2007

DENUKE CONTRACTING SERVICES, INC., TRU SOLUTIONS OF TENNESSEE, LLC AND MCE APPLIED TECHNOLOGY, INC. D/B/A TPG APPLIED TECHNOLOGY, INC., PLAINTIFFS,
v.
ENERGX, LLC AND FOSTER WHEELER ENVIRONMENTAL CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Thomas A. Varlan United States District Judge

(VARLAN/GUYTON)

MEMORANDUM OPINION

This civil action is before the Court on defendant EnergX, LLC's ("EnergX") Motion to Dismiss [Doc. 8]. Plaintiffs have responded in opposition to defendant's motion [Doc. 15] and defendant EnergX has filed a reply [Doc. 16]. Thus, the motion is now ripe for determination.

The Court has carefully reviewed the pending motion and responsive pleadings in light of the applicable law. For the reasons set forth herein, defendant's motion will be denied.

I. Relevant Facts

As the Court is required to do on a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court will construe the complaint [Doc. 1] in the light most favorable to the plaintiffs, accept all well-pleaded factual allegations as true, and determine whether plaintiffs can prove no set of facts in support of their claims that would entitle them to relief. Trzebuckowski v. City of Cleveland, 319 F.3d 853, 855 (6th Cir. 2003).

In 1998, the Department of Energy ("DOE") initiated the TRU/Alpha Low Level Waste Treatment Project ("TRU Project") to gather, process, and prepare for disposal of certain transuranic waste generated from various sources. [Doc. 1 at ¶ 8.] The DOE awarded the TRU Project to one of the defendants, Foster Wheeler Environmental Corporation ("FWEC"), on August 20, 1998. [Id. at ¶ 10.] FWEC subcontracted staffing of portions of the TRU Project to plaintiffs, DeNuke Contracting Services, Inc. ("DeNuke"), TPG Applied Technology, Inc. ("TPG"), and TRU Solutions of Tennessee, LLC ("TRU Solutions") (hereinafter collectively referred to as "the Plaintiffs"). [Id. at ¶¶ 12-14.] Under these contracts, FWEC would pay agreed-upon pricing to the Plaintiffs for staff, and the Plaintiffs would then pay the employees' wages and provide other employee benefits. [Id. at ¶ 16.] In 2003, FWEC hired defendant, EnergX, as a subcontractor on the TRU Project to provide general management of the project and overall business systems implementation. [Id. at ¶ 18.] EnergX's President and Chief Executive Officer is Anthony Buhl ("Buhl"). [Id. at ¶ 4.] In the August of 2005, FWEC hired Buhl as Vice President of FWEC and General Manager of the TRU Project. [Id. at ¶ 23.] After his appointment by FWEC, Buhl continued to act as owner of EnergX.[Id. at ¶ 24.]

In late 2005 or early 2006, EnergX submitted a contracting plan to the DOE proposing displacement of several TRU Project subcontractors claiming the plan would cause the TRU Project to operate more efficiently and cost effectively. [Id. at ¶ 25.] After DeNuke learned of the potential reduction of subcontractors on the TRU Project, Plaintiffs claim that DeNuke submitted a "Staffing Order" proposing consolidation of subcontractors under Denuke's management in order to eliminate the need to reduce the number of subcontractors. Plaintiffs allege that EnergX never responded to DeNuke's proposal. [Id. at ¶ 27.] Plaintiffs also claim that EnergX gave letters to nine DeNuke contract employees giving them 24 hours to accept job offers with EnergX or else be no longer allowed to work on the TRU Project [Id. at 30.] Six of nine DeNuke employees accepted the offer. Similar letters were given to TRU Solutions and TPG employees, of which three employees from each subcontractor accepted. [Id.] Plaintiffs also claim that Buhl told DeNuke that the DOE Contracts manager, Mark Million ("Million"), had directed EnergX to reduce the number of subcontractors on the TRU Project. [Id. at ¶ 31.] Upon calling Million's office, Plaintiffs claim that Connie Bayless, the DOE contract specialist and temporary substitute for Million, denied approving Buhl's contracting plan to reduce the number of subcontractors on the TRU Project. [Id. At ¶ 32.] In April of 2006, FWEC officially terminated all of its agreements for subcontracting with the Plaintiffs. [Id. at ¶ 33.]

Due to EnergX's actions, the Plaintiffs allege tortious interference with the FWEC contracts and tortious interference with the Plaintiffs' business and business relations. [Id. at ¶¶ 38-46.] The Plaintiffs claim lost profits for the remainder of the TRU Project as well as losses from expected contract extensions through 2013. [Id. at ¶ 34.] Additionally, Plaintiffs claim damages to their reputations in the nuclear industry that adversely affect their ability to generate goodwill and more business. [Id. at ¶ 37.]

II. Analysis

A. Standard of Review

EnergX has moved to dismiss the Plaintiffs' claims pursuant to Fed. R. Civ. P. 12(b)(6). A motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) should not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). All well-pleaded allegations must be taken as true and be construed most favorably toward the non-movant. Trzebuckowski, 319 F.3d at 855. While a court may not grant a Rule 12(b)(6) motion based on disbelief of a complaint's factual allegations, Lawler v. Marshall, 898 F.2d 1196, 1199 (6th Cir. 1990), the court "need not accept as true legal conclusions or unwarranted factual inferences." Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). The Sixth Circuit has made it clear that despite the liberal system of notice pleading, conclusory allegations are not enough to survive Rule 12(b)(6) dismissal. See MacDermid v. Discover Fin. Servs, 488 F.3d 721, 733 (6th Cir. 2007). The issue is not whether the plaintiff will prevail, but whether the claimant is entitled to offer evidence to support his or her claim. Miller v. Currie, 50 F.3d 373, 377 (6th Cir. 1995). Consequently, a complaint will not be dismissed pursuant to Rule 12(b)(6) unless there is no law to support the claims made, the facts alleged are insufficient to state a claim, or there is an insurmountable bar on the face of the complaint.

B. Tortious Interference with Contract

Under Tennessee law, there is a common law action as well as a statutory cause of action for the unlawful inducement of a breach of contract. See Polk and Sullivan, Inc., v. United Cities Gas Co., 783 S.W.2d 538, 542 (Tenn. 1990). The seven elements for common law "interference in the performance or procurement of the breach of contract" are: (1) there must be a legal contract; (2) the wrongdoer must have knowledge of the existence of the contract; (3) there must be an intention to induce its breach; (4) the wrongdoer must have acted maliciously; (5) there must be a breach of the contract; (6) the act complained of must be the proximate cause of the breach of the contract; and (7) ...


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