United States District Court, D. Kansas
MEMORANDUM AND ORDER
THOMAS MARTEN, JUDGE
Twin Creek Environmental Services, LLC entered into an oral
contract with defendant Pace Analytical Services, LLC to
perform environmental testing. Plaintiff alleges that
defendant made errors during its testing, which caused the
Kansas Department of Health and Environment
(“KDHE”) to initiate an enforcement action and
levy monitoring fees and financial penalties against
plaintiff. Plaintiff filed this action in the District Court
of Johnson County, Kansas, which defendant subsequently
removed to this court. The matter is now before the court on
defendant's motion to dismiss for failure to state a
claim, pursuant to Federal Rules of Civil Procedure 9(b) and
12(b)(6) (Dkt. 5). Defendant also contends that
plaintiff's claims are barred by the applicable statute
of limitations. For the reasons stated below, defendant's
motion to dismiss is granted, however, plaintiff is granted
leave to amend its complaint.
2014, plaintiff contracted with defendant to perform testing
on various samples collected from plaintiff's property.
Defendant was to determine whether plaintiff's samples
contained harmful chemicals, and if so, the quantities of the
about June 21, 2014, plaintiff provided the samples to
defendant. Defendant performed laboratory analytical testing
and determined that plaintiff's samples tested positive
for acetone in amounts greater than allowed. Defendant
reported its findings to plaintiff, who in turn asked
defendant to re-test the samples for the presence of acetone
and methylene chloride. Upon re-test, defendant discovered
that laboratory contaminants from its facilities resulted in
false positives or results showing a higher concentration of
certain hazardous chemicals than initially reported.
Defendant notified plaintiff of the erroneous test results by
letter dated August 5, 2014. Defendant's letter reported
that the presence of methylene chloride was accurate in three
samples, but the other results showing the presence of
methylene chloride were false. The presence of acetone could
not be explained.
did not request payment from plaintiff for the testing; nor
did it communicate further with plaintiff. However,
defendant-without plaintiff's permission or
knowledge-forwarded the first batch of test results to KDHE.
Plaintiff alleges that KDHE used these flawed tests to
prosecute plaintiff. Plaintiff alleges that defendant changed
its position, and informed KDHE that the original results
were correct to gain business from the State of Kansas.
actions, plaintiff alleges, were beyond the scope of their
agreement and its representations were fraudulent. Plaintiff
asserts that it relied on defendant's misrepresentations
to its detriment, and seeks relief for breach of contract,
violation of defendant's duty of good faith and fair
dealing, and fraud.
R. Civ. P. 12(b)(6)
survive a motion to dismiss, a complaint must contain
‘enough facts to state a claim to relief that is
plausible on its face.'” The Estate of Lockett
by & through Lockett v. Fallin, 841 F.3d 1098,
1106-07 (10th Cir. 2016), cert. denied sub nom. Lockett
v. Fallin, 137 S.Ct. 2298 (2017) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
plausible if it 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). In reviewing a motion to dismiss, the
court must accept as true all well-pleaded allegations and
view those allegations in the light most favorable to the
non-moving party. See Dias v. City & Cty. of
Denver, 567 F.3d 1169, 1178 (10th Cir. 2009).
plausibility standard “asks for more than a sheer
possibility that a defendant has acted unlawfully. 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.”
Iqbal, 556 U.S. at 678. Mere “labels and
conclusions” and “a formulaic recitation of the
elements of a cause of action” are insufficient.
Twombly, 550 U.S. at 555. Moreover, “[t]he
tenet that a court must accept as true all of the allegations
contained a complaint is inapplicable to legal
conclusions.” Iqbal, 556 U.S. at 678.
R. Civ. P. 9(b)
respect to fraud, plaintiff must plead its claim with
particularity. Fed.R.Civ.P. 9(b) (the rule requires a party
when “alleging fraud or mistake [to] state with
particularity the circumstances constituting fraud or
mistake”). The rule's purpose “is ‘to
ensure that the complaint provides the minimum degree of
detail necessary to begin a competent defense.'”
Fulghum v. Embarq Corp., 785 F.3d 395, 416 (10th
Cir. 2015) (quoting McCarthy v. Ameritech Pub.,
Inc., 763 F.3d 469, 478 n.2 (6th Cir. 2014)).
claim “must ‘set forth the time, place and
contents of the false representation, the identity of the
party making the false statements[, ] and the consequences
thereof.'” Schwartz v. Celestial Seasonings,
Inc., 124 F.3d 1246, 1252 (10th Cir. 1997) (quoting
Lawrence Nat'l Bank v. Edmonds, 924 F.2d 176,
180 (10th Cir. 1991)). This pleading standard requires
“[a]t a minimum . . . the who, what, when, where, and
how of the alleged fraud.” United States ex rel.