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Bottom Line Recoveries LLC v. Lockheed Martin Corporation

United States District Court, D. Arizona

December 4, 2014

Bottom Line Recoveries LLC, Plaintiff,
v.
Lockheed Martin Corporation, Defendant.

ORDER

JAMES A. TEILBORG, Senior District Judge.

Pending before the Court is Defendant's Motion to Dismiss Second Claim for Relief (Unjust Enrichment) of Amended Complaint, (Doc. 30). The Court will deny the Motion.

I. BACKGROUND

Plaintiff is an accounting consultant firm that offers services such as account payable auditing and recovery of payable mistakes. (Doc. 1 ¶ 2). Defendant is an international corporation engaged in the research, design, development, and manufacturing of advanced technology systems. (Doc. 1 ¶ 4; Doc. 24 ¶ 4). In July 2010, Plaintiff and Defendant entered into a Services Agreement under which Plaintiff agreed to identify opportunities for Defendant to recover credits, overpayments, and other payment errors made by Defendant's suppliers. (Doc. 32 at 2; Doc. 30 at 1-2). In return, Defendant agreed to pay Plaintiff 10% of the recovered amount. (Doc. 32 at 2; Doc. 30 at 1-2). Both parties agree that the Services Agreement is binding, (Doc. 1 ¶ 25; Doc. 24 ¶ 25), and that disputes arising under the Services Agreement are governed by Maryland law, (Doc. 1 ¶ 13; Doc. 24 ¶ 13). However, the parties disagree on the number of payment errors that Plaintiff identified and accordingly disagree on the amount Defendant owes Plaintiff. Defendant asserts that it paid Plaintiff 10% of all of the payment errors that Defendant was able to recover. (Doc. 31 at 2). Plaintiff claims that Defendant still owes Plaintiff $1, 511, 628.67. (Doc. 32 at 2).

On March 5, 2014, Plaintiff filed its Complaint against Defendant asserting two causes of action, breach of contract and unjust enrichment. (Doc. 1). On May 15, 2014, Defendant filed the instant motion requesting the Court to dismiss Plaintiff's unjust enrichment claim under Federal Rule of Civil Procedure ("Rule") 12(b)(6). (Doc. 30). Plaintiff responded on May 30, 2014, (Doc. 32), and Defendant filed a reply to Plaintiff's response on June 9, 2013, (Doc. 34).

II. LEGAL STANDARD

The Court may dismiss a complaint for failure to state a claim under Rule 12(b)(6) for two reasons: (1) lack of a cognizable legal theory and (2) insufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet the requirements of Rule 8(a)(2). Rule 8(a)(2) requires a "short and plain statement of the claim showing that the pleader is entitled to relief, " so that the defendant has "fair notice of what the... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

Although a complaint attacked for failure to state a claim does not need detailed factual allegations, the pleader's obligation to provide the grounds for 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 (internal citations omitted). The factual allegations of the complaint must be sufficient to raise a right to relief above a speculative level. Id. Rule 8(a)(2) "requires a showing, ' rather than a blanket assertion, of entitlement to relief.

To survive a motion to dismiss, a complaint must contain sufficient factual matter, which, if accepted as true, states a claim to relief that is "plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). Facial plausibility exists if the pleader pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Plausibility does not equal "probability, " but plausibility requires more than a sheer possibility that a defendant acted unlawfully. Id. "Where a complaint pleads facts that are merely consistent' with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (citing Twombly, 550 U.S. at 557).

In deciding a motion to dismiss under Rule 12(b)(6), a court must construe the facts alleged in the complaint in the light most favorable to the drafter of the complaint and the court must accept all well-pleaded factual allegations as true. See Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, courts do not have to accept as true a legal conclusion couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986).

III. ANALYSIS

A. Choice of Law

A federal court sitting in diversity jurisdiction must apply the forum state's choice of law rules to determine the controlling substantive law. Klaxon v. Stentor Elec. Mfg. Co. Inc., 313 U.S. 487, 495-96 (1941); see Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1187 (9th Cir. 2001). Because Plaintiff filed the Complaint in the District of Arizona, Arizona choice of law rules apply. Under Arizona law, a court will enforce a choice of law provision that the parties have contracted for unless doing so is "contrary to the fundamental policy of a state with a materially greater interest in the issue." See Landi v. Arkules, 835 P.2d 458, 462 (Ariz.Ct.App. 1992). Here, the Services Agreement states that all conflicts arising under the Services Agreement are governed by Maryland law. (Doc. 1 ¶ 13; Doc. 24 ¶ 13). While Arizona has an ...


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