Dean v. Walker , 876 F. Supp. 2d 10 ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
EDWARD WALKER DEAN d/b/a
EDWARD WALKER DEAN
ASSOCIATES,
Plaintiff,
Civil Action No. 09-2235 (AK)
v.
EDWARD WALKER, Individually and as
CEO for EJW ENTERPRISES I, INC.,
EJW ENTERPRISES I, INC.,
Defendants.
MEMORANDUM OPINION
Plaintiff Edward Walker Dean (“Plaintiff”) and Defendants Edward Walker (“Mr.
Walker”) and EJW Enterprises I, Inc. (“EJW Enterprises”) (collectively, “Defendants”) have
consented to proceed before the undersigned for all purposes and trial. (See Docket Entry [45].)
Currently before the Court is Defendants’ Motion to Dismiss and for Summary Judgment [52]
(“Defs.’ Mot.”) At the time Defendants filed their Motion to Dismiss and for Summary
Judgment, they had already filed an Answer [5]. Therefore, Defendants moved to have the
Motion to Dismiss converted into a Motion for Judgment on the Pleadings under Rule 12(c) [56],
which the Court granted [57]. Plaintiff filed an Opposition to Defendants’ original motion [53]
(“Pl.’s Opp.”) and a Surreply [58] after the Motion to Convert was granted. For the following
reasons, Defendants’ Motion will be GRANTED.
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I. BACKGROUND
This case arises out of a Consulting Agreement between Plaintiff’s company, Edward
Walker Dean and Associates, and Defendants. EJW Enterprises1 is a manufacturer of metal
products servicing the aerospace, defense, energy and industrial sectors, headquartered in Detroit,
Michigan. (Answer at ¶ 3.) The Consulting Agreement, entered into on August 10, 2009,
provided that Edward Walker Dean and Associates would “use its best efforts to represent [EJW
Enterprises] in securing business contracts and developing federal appropriations projects and
relationships.” (Consulting Agreement [52-1] at 2.) The Agreement was to be in effect until
July 31, 2010 and compensation was set at $15,000 per month. (Id. at 2-3.)
Plaintiff makes three claims against Defendants: (1) Breach of Contract; (2) Willful,
Malicious and Wanton Misconduct; and (3) Tortuous Interference with Contract and Inducing
Breach. (Compl. at ¶¶ 8-18.) Plaintiff’s Complaint made the same three claims against Mark
Sypniewski, a procurement agent for General Dynamics Land Systems, a defense contractor.
(Compl. at ¶ 4.) The claims against Mr. Sypniewski have been transferred from this Court to the
U.S. District Court for the Eastern District of Michigan owing to a lack of personal jurisdiction.
(Order, Dec. 23, 2010 [35].)
Defendants challenge the breach of contract claim against Mr. Walker only, and make
that challenge under Federal Rules of Civil Procedure 12(c) and Rule 56. (Defs.’ Mot. at 4.)
1
EJW Enterprises was previously W Industries, and held that name during the events that
gave rise to these claims. W Industries was subsequently acquired by Tower Defense &
Aerospace, LLC, and legally changed its name to EJW Enterprises I, Inc. (See Notice of Change
in Defendant’s Legal Name [42]; Order, July 20, 2011 [44].) For purposes of this Memorandum
Opinion, the Court will refer to the company as EJW Enterprises even if referring to actions
taken when the company was named W Industries.
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Defendants challenge the willful, malicious and wanton misconduct and tortuous interference
with contract claims against both EJW Enterprises and Mr. Walker and do so only under Rule
12(c). (Defs.’ Mot. at 5-6.)
In Plaintiff’s Complaint, he states that a copy of the Consulting Agreement “is attached
hereto as ‘Exhibit A’ and incorporated by reference herein.” (Compl. at ¶9.) Plaintiff does not
attach the Consulting Agreement to the pleading, nor is there any Exhibit A to the Complaint.
Defendants attach to their Motion for Judgment on the Pleadings a copy of the Consulting
Agreement and a copy of the letter from EJW Enterprises to Plaintiff notifying him of the
termination of the Agreement. (Defs.’ Mot., Exs. A [52-3] and B [52-4].) Because both parties
intended to rely on Exhibits attached to the pleadings, and because Defendants now seek
summary judgment on one of their claims in addition to dismissal on the pleadings, the Court
will treat Defendants’ Motion as a Motion for Summary Judgment pursuant to Rule 56. See Fed.
R. Civ. P. 12(d) (“If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one for summary
judgment under Rule 56.”); Langley v. Napolitano, 677 F. Supp. 2d 261, 263 (D.D.C. 2010)
(construing motion for judgment on the pleadings and, in the alternative, for summary judgment,
as a motion for summary judgment where motion attached exhibits that both parties relied on but
were not included in the complaint ); Highland Renovation Corp. v. Hanover Ins. Group, 620 F.
Supp. 2d 79 (D.D.C. 2009) (converting 12(b)(6) motion to summary judgment motion where
court considered facts outside the complaint)
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II. STANDARD OF REVIEW
Under Fed. R. Civ. P. 56(a), summary judgment shall be granted if the movant shows
that there is “no genuine issue as to any material fact and the moving party is entitled to a
judgment as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).
Summary judgment should be granted against a party “who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The court is required to draw all justifiable inferences in the non-moving party’s favor
and to accept the non-moving party’s evidence as true. Anderson, 477 U.S. at 255. The non-
moving party must establish more than “the mere existence of a scintilla of evidence” in support
of its position. Id. at 252. The non-moving party may not rely on allegations or conclusory
statements; instead, the non-moving party is obliged to present specific facts that would enable a
reasonable jury to find it its favor. Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999).
III. ANALYSIS
A. Breach of Contract
As noted above, Defendants’ Motion does not challenge Plaintiff’s claim for breach of
contract against EJW Enterprises, only the breach of contract claim against Mr. Walker. (See
Defs.’ Mot. at 10.) To prevail on a breach of contract pursuant to District of Columbia law, a
party must establish (1) a valid contract between the parties; (2) an obligation or duty arising out
of the contract; (3) a breach of that duty; and (4) damages cause by the breach. Tsintolas Realty
Co. v. Mendez, 984 A.2d 181, 187 (D.C. 2009). Defendants argue that Mr. Walker was not a
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party to the Agreement, and thus Plaintiff cannot establish that there was a contract between
Plaintiff and Mr. Walker. (Id.) Both parties agree that Mr. Walker was the CEO of EJW
Enterprises and negotiated and signed the Consultant Agreement in his capacity as the CEO of
the Corporation. (Compl. at ¶ 2; Defs.’ Mot. at 5.) Plaintiff claims that Mr. Walker was the
individual who “made the decision to suddenly and unexpectedly terminate Plaintiff’s
employment contracts.” (Pl.’s Opp. at 3.)
“A corporate officer acting in his official capacity is not personally liable for the
corporation’s breach of contract.” B & M Linen, Corp. v. Kannegiesser, USA, Corp., 679 F.
Supp. 2d 474, 486 (S.D.N.Y. 2010); see also Henderson v. Phillips, 195 A. 2d 400 (D.C. 1963)
(president of company who entered into contracts on behalf of company was not personally liable
for company’s unpaid balance on the contracts).
Exhibits A and B to Defendant’s Motion make clear that the Consulting Agreement was
between Plaintiff and EJW Enterprises and that Mr. Walker was acting in his capacity as CEO of
EJW Enterprises. Exhibit A, the Consulting Agreement, shows that Mr. Walker signed the
Agreement, but above his signature is listed “W Industries” (now EJW Enterprises) as the party.
(Def.’s Mot., Ex. A at 4.) Exhibit B is the letter notifying Plaintiff that his employment contract
was being terminated and is signed by Jonathan Quarles, the Director of Governmental Affairs at
EJW Enterprises. (Def.’s Mot., Ex. B.) The letter makes no reference to and does not have the
signature of Edward Walker. (Id.)
In his opposition, Plaintiff argues that corporate officers are not immune from individual
liability where they participate in the wrongful conduct. (Pl’s Opp. at 2.) The authority Plaintiff
cites, however, refers to individual liability in tort actions, rather than a breach of contract. Id.;
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Coastal Abstract Service, Inc. v. First American Title Ins. Co., 173 F. 3d 725, 734 (9th Cir.
1999).2
Because Mr. Walker’s actions in regard to Plaintiff’s employment contract were
undertaken in his capacity as CEO of EJW Enterprises, including his signing of the Consulting
Agreement, Mr. Walker is not personally liable under breach of contract. Plaintiff retains his
breach of contract claim against EJW Enterprises.
B. Willful, Malicious and Wanton Misconduct
Defendants argue that Willful, Malicious and Wanton Misconduct is not a recognized
cause of action in the District of Columbia. (Defs.’ Mot. at 5.) Willful, malicious and wanton
misconduct is the state of mind required for a finding of punitive damages in the District of
Columbia. Lurie v. Mid-Atlantic Permenante Medical Group, P.C., 729 F. Supp. 2d 304, 334
(D.D.C. 2010). Punitive damages, however, are not allowed in a pure breach of contract claim.
Caston v. Butler, 718 F. Supp. 2d 87, 89 (D.D.C. 2010); Sere v. Group Hospitalization Inc., 443
A.2d 33, 37 (D.C. 1982) (“[w]here the basis of the complaint is, as here, a breach of contract,
punitive damages will not lie, even if it is proved that the breach was willful, wanton or
malicious.”)
Punitive damages are available where the breach of contract claim merges with an
independent tort. Sere, 443 A.2d at 37. For the reasons stated below, Plaintiff’s tort claim
against Defendants will be dismissed. Therefore, the breach of contract claim has no
independent tort with which to merge. See Nugent v. Unum Life Ins. Co. of America, 752 F.
Supp. 2d 46 (D.D.C. 2010) (dismissing the plaintiff’s intentional infliction of emotion distress
2
See supra III.C for a discussion of Mr. Walker’s potential liability in a tort action.
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claim because the injuries underpinning that claim stem from an alleged breach of contract).
Defendant’s motion for summary judgment will be granted as to Plaintiff’s claim for willful,
wanton and malicious conduct.
C. Tortuous Interference with Contract and Inducing Breach
Tortuous interference with contract has four elements in the District of Columbia: “(1)
existence of a contract; (2) knowledge of the contract; (3) intentional procurement of breach by
the defendant; and (4) damages resulting from the breach.” Riggs v. Home Builders Institute,
203 F. Supp. 2d 1, 22 (D.D.C. 2002) (quoting Sorrell’s v. Garfinkel’s, 565 A.2d 285, 289 (D.C.
1989).
Defendants argue that Plaintiff’s Tortuous Interference with Contract and Inducing
Breach claim should be dismissed because the facts supporting the claim only implicate Mr.
Sypniewski and not Defendants. Plaintiff’s Complaint alleges that Sypniewki “made threats with
the intent of causing the termination of the Consulting Agreement” and that these threats and
general interference were a substantial factor in EJW Enterprises’ decision to terminate the
Agreement. (Compl. at ¶ 18.) The claim against Mr. Sypniewski has been transferred and he is
no longer a defendant in this Court. (Order, Dec. 23, 2010.) Plaintiff does not make any
allegations against Mr. Walker or against EJW Enterprises in support of his tortuous interference
claim.
Even if Plaintiff made substantive allegations in support of his tortuous interference
claim, neither EJW Enterprises nor Mr. Walker can be held liable for the tort. EJW Enterprises
was a party to the contract and therefore cannot interfere with a breach of the contract. Farouki
v. Petra Intern. Banking Corp., 811 F. Supp. 2d 388, 404 (D.D.C. 2011) (“The alleged tort,
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interference with contractual relations, arises only when there is interference with a contract
between the plaintiff and a third party.”) Mr. Walker, an officer of the company, cannot be liable
for inducing the company to breach the contract as long as he was acting within the scope of his
employment. Id.; Paul v. Howard Univ., 754 A.2d 297 (D.C. 2000) (“officers of a University act
as agents of the University and thus cannot be held liable for tortuously interfering with a
contract between the University and a third party) Therefore, Plaintiff’s tortuous interference
claim against Defendants will be dismissed.
CONCLUSION
For the foregoing reasons, Defendants’ Motion for Summary Judgment will be granted.
A separate order will accompany this memorandum opinion.
DATE: June 19, 2012 /s/
ALAN KAY
UNITED STATES MAGISTRATE JUDGE
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