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Cunningham Lindsey U.S. Inc. v. Crawford & Co.

United States District Court, D. Colorado

December 3, 2018

CUNNINGHAM LINDSEY U.S. INC., Plaintiff,
v.
CRAWFORD & COMPANY, ROBERT WILLIAMS, ANDREW LARSON, WILLIAM WALLS, THOMAS WALLS, and RYAN WALLS, Defendants.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Kristen L. Mix United States Magistrate Judge.

         This matter is before the Court on Defendant Crawford & Company's (“Defendant Crawford”) Amended Motion to Dismiss [#71][1] (the “Motion”) pursuant to Fed.R.Civ.P. 12(b)(6), filed on May 14, 2018. Plaintiff filed an Opposition to the Motion [#87] (the “Response”) on August 7, 2018. Defendant Crawford filed a Reply [#90] on August 21, 2018. The Court has reviewed the Motion, the Response, the Reply, the case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court respectfully RECOMMENDS that the Motion be GRANTED.

         I. Background

         Plaintiff is a loss adjusting, claims management, and risk solutions firm. Second Am. Compl. [#48] at 3. Prior to December 2017, Plaintiff employed the Individual Defendants[2]as skilled claims adjusters to conduct its business. Id. Plaintiff alleges that Defendant Crawford deliberately induced the Individual Defendants to resign their positions at Plaintiff's firm and join Defendant Crawford in order to shut down Plaintiff's Major & Complex Loss business in Denver. Id. at 8. Following the Individual Defendants' resignations, Plaintiff received several items of correspondence from its clients, requesting that their cases be transferred to Defendant Crawford. Id. Plaintiff alleges that it has lost substantial revenue as a result of the solicitation of its clients by the Individual Defendants and Defendant Crawford. Id. at 9.

         Defendant Crawford seeks dismissal of all claims Plaintiff has asserted. Specifically, Defendant Crawford seeks dismissal of Plaintiff's claims of intentional interference with contracts (“Claim Six”) and intentional interference with prospective economic advantage (“Claim Seven”), arguing both claims fail to meet the requisite pleading standards. See Motion [#71]; Second Am. Compl. [#48]. Plaintiff opposes Defendant Crawford's Motion [#71], arguing that Plaintiff pleaded sufficient facts that plausibly allege claims for relief against Defendant Crawford. See generally Response [#87]. Alternatively, in the event of a dismissal, Plaintiff asks the Court to dismiss the claims without prejudice.

         II. Legal Standard

         The purpose of a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). Fed.R.Civ.P. 12(b)(6) states that a complaint may be dismissed for “failure to state a claim upon which relief can be granted.” “The Court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (citation omitted).

         To withstand a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), “a complaint must contain enough allegations of fact ‘to state a claim to relief that is plausible on its face.'” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The complaint “must plead sufficient facts, taken as true, to provide ‘plausible grounds' that discovery will reveal evidence to support the plaintiff's allegations.” Shero v. City of Grove, Okla., 510 F.3d 1196, 1200 (10th Cir. 2007) (citation omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement.” Silva v. U.S. Bank, Nat'l Ass'n, 294 F.Supp.3d 1117, 1124 (D. Colo. 2018) (citing Iqbal, 556 U.S. at 678). Allegations that are “so general that they encompass a wide swath of conduct, much of it innocent, will not be sufficient.” L-3 Commc'ns Corp. v. Jaxon Eng'g & Maint., Inc., No. 10-cv-02868-MSK-KMT, 2013 WL 1231875, at *2 (D. Colo. Mar. 27, 2013) (quoting Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012) (internal quotations omitted)).

         The factual allegations in a complaint “must be enough to raise a right to relief above the speculative level” to survive a Fed.R.Civ.P. 12(b)(6) motion to dismiss. Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1191 (10th Cir. 2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” a factual allegation has been stated, “but it has not shown that the pleader is entitled to relief, ” as required by Fed.R.Civ.P. 8(a). Iqbal, 556 U.S. at 679.

         III. Analysis

         A. Intentional Interference with Contracts (Claim Six)

         Claim Six in Plaintiff's Second Amended Complaint [#48] alleges intentional interference with contracts against Defendant Crawford. Colorado recognizes the tort of intentional interference with contracts. Mueller v. Swift, No. 15-cv-1974-WJM-KLM, 2017 WL 2362137, at *6 (D. Colo. May 31, 2017) (citing Mem'l Gardens, Inc. v. Olympian Sales & Mgmt. Consultants, Inc., 690 P.2d 207, 210 (Colo. 1984)). “The tortious conduct occurs when the defendant, not a party to the contract, induces the third party to breach the contract, or interferes with the third party's performance of the contract.” Colo. Nat'l Bank of Denver v. Friedman, 846 P.2d 159, 170 (Colo. 1993).

         To sufficiently plead a claim for intentional interference with contracts, Plaintiff is required to include facts in its Second Amended Complaint [#48] that plausibly allege: (1) the existence of a contractual relationship between Plaintiff and a third party; (2) Defendant Crawford knew or reasonably should have known of the contract; (3) Defendant Crawford intentionally and improperly interfered with that contract; (4) Defendant Crawford's conduct caused the breach or non-performance of the contract by the third party; and (5) Plaintiff suffered damages as a result. Swift, 2017 WL 2362137, at *7 (citing Arapahoe Surgery Ctr., LLC v. Cigna Healthcare, Inc., 171 F.Supp.3d 1092, 1120 (D. Colo. 2016)). Here, Defendant Crawford's arguments are directed to the first and third elements, which the Court addresses respectively. See Motion [#71]; Response [#87] at 5-10; Reply [#90] at 2-7.

         1. Existence of a Contract

         Plaintiff seemingly concedes that it has not identified any specific contract in the Second Amended Complaint [#48], as it argues that “[Plaintiff] is not required at the pleading stage to specifically identify each and every contract with which [Defendant Crawford] interfered.” Response [#87] at 5. Further, Plaintiff states that, “[a]lthough [Plaintiff] has not included in its pleading an exhaustive list of each and every contract it maintained with the clients . . . [Plaintiff] plainly has alleged the existence of such clients and such contracts.” Id. To support its argument, Plaintiff cites Oaster v. Robertson, 173 F.Supp.3d 1150 (D. Colo. 2016), where the court allowed an intentional interference with contracts claim to proceed because it was “undisputed that a contract existed.” Id. at 1179. In Oaster, the Court found that a contract existed between the plaintiff and defendant during the parties' business relationship, and it was undisputed that the parties worked together on a “myraid of projects with numerous clients.” Id.

         Defendant Crawford disagrees with Plaintiff's argument and states that Plaintiff “must offer specific factual allegations establishing that it had contract(s) with a third party with which the defendant purportedly interfered.” Reply [#90] at 2 (emphasis added) (citing Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011); Shell v. Am. Family Rights Ass'n, 899 F.Supp.2d 1035, 1060 (D. Colo. 2012)). Defendant Crawford also distinguishes Oaster by noting that the court there merely held plaintiff need not “provide a copy of any contracts to sufficiently allege a claim for breach of contract or interference with contractual relations.” Id. at 3 (emphasis in original).

         “To succeed on a claim for intentional interference with existing contractual relations, of course, one must plead and prove a valid contract with a third party.” Nutting v. RAM Sw., Inc., 106 F.Supp.2d 1121, 1128 (D. Colo. 2000). Here, Plaintiff directs the Court to two paragraphs in the Second Amended Complaint [#48] where Plaintiff states it has “alleged the existence of . . . such contracts.” Response [#87] at 5. However, these paragraphs identically state: “At all times from January 1, 2015 to present, [Plaintiff] was party to numerous ongoing contracts for claims management and other related services with its clients.” Second ...


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