Avialae S. DE R.L. DE C.V. v. Cummins, Inc.

Motion to Dismiss for Failure to State a Claim Defendant Cummins Inc.'s Motion to Dismiss Pursuant to Fed.R.Civ.P. 12

W.D. Tex.July 27, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION ) AVIALAE S. DE. R.L. DE C.V., ) ) Plaintiff, ) Civil No. EP16CV0188 ) -vs- ) ) ) ) CUMMINS INC. ) Defendant ) DEFENDANT CUMMINS INC.’S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6) Defendant Cummins Inc. (“Cummins”) hereby moves this Court pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss with prejudice the claim filed against Cummins in this action by Plaintiff Avialae S. de. R.L. de C.V (“Plaintiff”). In support of its Motion, Cummins states as follows: INTRODUCTION The Court should dismiss the pending action with prejudice because Plaintiff’s pleading (ECF No. 10) fails to make the requisite showing that Plaintiff is entitled to any relief. The Amended Complaint does not make a prima facie case for either of the claims it purports to bring: fraud and breach of contract. Plaintiff has now had two opportunities to plead its case but the claims remain vague, conclusory, and threadbare.1 Count I for fraud under Texas law must be dismissed because Plaintiff does not set forth any of the details required by Fed. R. Civ. P. 1 Defendant filed a Motion to Dismiss aimed at the original pleading on June 17, 2016. ECF No. 9. On July 8, 2016 Plaintiff filed its Amended Complaint. ECF No. 10. Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 1 of 16 - 2 - 9(b), such as pleading facts plausibly showing that Defendant acted with fraudulent intent or misrepresented any existing facts. Count II for breach of contract fails to properly allege the existence and breach of a valid contract between the parties, but rather appears to seek compensation for Plaintiff’s own efforts to prepare its facilities for “possibilities” of doing business. Accordingly, the Court should dismiss the Amended Complaint with prejudice. LEGAL STANDARD Federal Rule of Civil Procedure 8(a) requires that a complaint include a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the Rule is to give a defendant fair notice of the claim and the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A breach of contract claim must allege the existence of a valid contract. See Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Group, Ltd., 818 F.3d 193, 208 (5th Cir. 2016) (applying Texas law). Federal Rule of Civil Procedure 9(b) further requires that a party alleging fraud “state with particularity the circumstances constituting fraud or mistake.” A claim for fraud must “specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.” Williams v. WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1997) (citation omitted). For a complaint to survive a motion to dismiss under Rule 12(b)(6), its facts, accepted as true, must state a claim to relief that is plausible on its face. U.S. ex rel. Bias v. Tangipahoa Par. Sch. Bd., 816 F.3d 315, 321 (5th Cir. 2016) (citing Twombly, 550 U.S. at 570). Facial plausibility requires a plaintiff to do more than simply state legal conclusions or recite the elements of a cause of action in boilerplate fashion. See Twombly, 550 U.S. at 555. Factual allegations must be sufficient to “raise a right to relief above the speculative level.” Id. The Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 2 of 16 - 3 - Court need not credit bare legal conclusions unsupported by factual underpinnings. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (“While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.”). Jurisdiction in this case is based on diversity of citizenship. See ECF No. 1. When jurisdiction is based on diversity, the Court applies the substantive law of the forum state. Gines v. D.R. Horton, Inc., 699 F.3d 812, 816 (5th Cir. 2012) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) and Holt v. State Farm Fire & Cas. Co., 627 F.3d 188, 191 (5th Cir.2010)). ARGUMENT AND AUTHORITIES A. Plaintiff’s Threadbare Claim for Fraud must Fail as a Matter of Law. For its primary Count, Plaintiff states in conclusory terms that Cummins has committed fraud in connection with a series of six alleged component-manufacturing programs, for which Plaintiff attempted to become a vendor. The sole apparent basis for Plaintiff’s claim, however, is that work anticipated by Plaintiff pursuant to these programs did not “materialize as presented to Plaintiff,” and that the programs were either “cancelled, not approved, approved but no orders are placed, or with orders placed substantially below the agreed levels.” Am. Compl. p. 18 ¶ C. In addition to failing to state a claim for the existence of a binding agreement in the first place, see Section B infra, these threadbare allegations fail to meet the heightened requirements for pleading fraud, as mandated by Federal Rule of Civil Procedure 9(b), which “requires a plaintiff to allege the existence of facts and circumstances sufficient to warrant the pleaded conclusion that fraud has occurred, or face dismissal of his claim.” Kleck v. Bausch & Lomb, Inc., 145 F. Supp. 2d 819, 828 (W.D. Tex. 2000) (dismissing fraud claim for failure to meet the required pleading standard) (emphasis added). Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 3 of 16 - 4 - Under Texas law, the elements of fraud are: (1) a material representation was made; (2) the representation was false; (3) when the representation was made the speaker knew it was false or made it recklessly without any knowledge of its truth and as a positive assertion; (4) the speaker made the representation with the intent that it should be acted upon by the party; (5) the party acted in reliance upon the representation; and (6) the party thereby suffered injury. Shakeri v. ADT Sec. Services, Inc., 816 F.3d 283, 296 (5th Cir. 2016) (quotation omitted). The essence of a fraud action is “deception as to an existing fact.” See Sullivan v. Bickel & Brewer, 943 S.W.2d 477, 481 (Tex. Civ. App. - Dallas 1995, writ denied). By contrast, under Texas law, “future predictions and opinions, especially those regarding the future profitability of a business, cannot form a basis for fraud as a matter of law.” Zar v. Omni Indus., Inc., 813 F.2d 689, 693 (5th Cir.1987) (holding that profit projections which “estimated a distributor’s potential advertising revenue and income” could not be fraudulent representations as a matter of law); see also Maness v. Reese, 489 S.W.2d 660, 663-64 (Tex. Civ. App.-Beaumont 1972, writ ref'd n.r.e.) (representations “calling for opinion and judgment” dependent upon future business operations could not form basis for fraud claim). Even a party’s failure to perform a promise does not, without more, constitute “evidence of the promisor’s intent not to perform at the time the promise was made.” Kleck, 145 F. Supp. 2d at 828 (holding that complaint is “insufficient to support a fraud action” where it alleges “nothing more than a breach of contract”); see also Educ. Mgmt. Services, LLC v. Tracey, 102 F. Supp. 3d 906, 913 (W.D. Tex. 2015) (dismissing fraud claim pursuant to Fed. R. Civ. P. 12(b)(6) where claim was based on “nothing more than conclusory statements” about defendant’s alleged state of mind at time of agreement); Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998) (holding that a party’s non-performance amounts to fraud only if plaintiff proves that representations were made “with the intent to Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 4 of 16 - 5 - deceive and with no intention of performing”) (citations omitted). Similarly, there is no fraud when a party has made a promise with an existent intent to fulfill its terms, but then changes its mind or refuses to perform. Educ. Mgmt. Services, 102 F. Supp. 3d at 913 (quoting Oliver v. Rogers, 976 S.W.2d 792, 804 (Tex. App. 1998)). The Amended Complaint sets forth not a single allegation plausibly showing that Cummins representatives made any misstatements of existing fact. Instead, Plaintiff lists alleged predictions of estimated volumes of work, which Plaintiff claims that Cummins “later reveal[ed]” were not approved, Am. Compl. p. 17 ¶ B(1); that Cummins “end[ed] up reducing,” id: ¶ 2; or which were canceled “in a few months.” Id. ¶ 3. Plaintiff’s only support for the claimed falsity of any statements alleged in the Amended Complaint, or for alleged knowledge of any falsity on the part of Cummins representatives, is the bare allegation that “[n]one of the projects materialized as presented…” Id. p. 18 ¶¶ C, D. This conclusory statement, relating only to alleged future predictions or opinions by Cummins, fails to plausibly show that Cummins representatives made any misstatements of existing fact. Further, as discussed in Section B infra, the Amended Complaint fails to show that Cummins entered into any binding agreements with Plaintiff that warrant recovery in this matter, let alone that Cummins did so while acting with the intent to not fulfill its promises. In addition, Plaintiff has not set forth any allegations plausibly suggesting that Cummins intended to induce Plaintiff into action. To plead a claim under Rule 9(b), one must specifically state what the person making allegedly false statements obtained from the falsity. Kleck, 145 F. Supp. 2d at 828. Plaintiff alleges “the goal was to get Plaintiff to produce samples, engineering studies, and make other efforts to show that Plaintiff was ready and able to meet their every Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 5 of 16 - 6 - standard and requirement.” Am. Compl. p. 19 ¶ E. Plaintiff does not allege Cummins obtained any gain whatsoever from the alleged fraud. In summary, Plaintiff has not pleaded its fraud claim with particularity and has failed to set out any facts plausibly showing that Cummins representatives made any false statements of existing fact. Plaintiff’s allegation that Cummins acted fraudulently amounts to nothing more than a formulaic recitation of the legal elements combined with reliance on alleged non- actionable statements of opinion or predictions about the future. Plaintiff’s primary cause of action for fraud should, therefore, be dismissed pursuant to Rule 12(b)(6) and Rule 9(b). B. Plaintiff has not Pleaded an Actionable Claim for Breach of Contract. Plaintiff appears to base its Count II, Breach of Contract, wholly on expenses it incurred to prepare for the possibility of doing business with Cummins in relation to six named projects for reworking and creating fuel-injection components. As discussed below, Plaintiff alleges that some of the projects were accompanied by Purchase Orders or “working agreements,” whereas others were not. Fundamentally, however, nowhere does Plaintiff allege that it performed agreed-upon work for which it was not compensated, or that it fulfilled orders but was not paid according to the agreed-upon terms. Rather, Plaintiff appears to allege that because it was not able to conduct the amount of business it planned to do with Cummins, because of the cancellation or modification of the various purchasing programs, Plaintiff is entitled to recover costs it spent attempting to become an approved Cummins vendor. Yet Plaintiff pleads no facts suggesting that Cummins was obligated, pursuant to agreement between the parties, to fulfill envisioned orders (regardless of changing business conditions) or to compensate Plaintiff for work it unilaterally undertook to Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 6 of 16 - 7 - prepare its facilities for potential work on these projects. The Amended Complaint therefore fails to plausibly show the existence of a valid, binding contract for the damages it seeks. The elements of a claim for breach of contract under Texas law are: “(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.” Villarreal v. Wells Fargo Bank, N.A., 814 F.3d 763, 767 (5th Cir. 2016) (citing Wright v. Christian & Smith, 950 S.W.2d 411, 412 (Tex. App.-Houston [1st Dist.] 1997, no writ)). Where a complaint does not plead the existence of a valid contract to begin with, it is subject to dismissal. See Int'l Energy Ventures Mgmt., 818 F.3d at 208 (dismissing breach of contract claim because Plaintiff “never alleges the existence of a contract between it and [Defendant].”). To be a valid contract under Texas law, “[t]he essential terms must be defined ‘with sufficient precision to enable the court to determine the obligations of the parties.’” Mack v. John L. Wortham & Son, L.P., 541 Fed. Appx. 348, 362 (5th Cir. 2013) (quoting New Process Steel, L.P. v. Sharp Freight Sys., No. 01-04-00764-CV, 2006 WL 947764, at *3 (Tex. App.-Houston [1st Dist.] Apr. 13, 2006, no pet.)). Under Texas law, the “primary and essential element” of a contract is a demonstration of the parties’ meeting of the minds by an offer an acceptance. Farley v. Clark Equip. Co., 484 S.W.2d 142, 147 (Tex. Civ. App. 1972), writ refused NRE (Nov. 15, 1972). For an agreementt to be enforceable, the parties’ minds’ must meet “with respect to the subject matter of the agreement and as to all of its essential terms.” Palavan v. McCulley, 01-15-00730-CV, 2016 WL 2953971, at *5 (Tex. App.-Houston [1st Dist.] May 19, 2016, no. pet. h.) (quoting Ludlow v. DeBerry, 959 S.W.2d 265, 272 (Tex. App.-Houston [14th Dist.] 1997, no writ)). Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 7 of 16 - 8 - A party’s objective assent, not subjective state of mind, is the determination of a meeting of the minds. WorkSTEPS, Inc. v. ErgoScience, Inc., 88 F. Supp. 3d 752, 758 (W.D. Tex. 2015) (citation omitted). “[A] party manifests its assent by signing an agreement.” Palavan, 01-15- 00730-CV, 2016 WL 2953971, at *5 (quoting Rachal v. Reitz, 403 S.W.3d 840, 845 (Tex. 2013)). Conversely, use of language such as “preliminary,” “look forward to further discussions,” or “for discussion only,” objectively show an intent to not enter into a binding contract. Medistar Corp. v. Schmidt, 267 S.W.3d 150, 158 (Tex. App.-San Antonio 2008, pet. denied). In addition, a contract’s essential terms must be agreed to by the parties. “When an agreement leaves material matters open for future adjustment and agreement that never occur, it is not binding on the parties and merely constitutes an agreement to agree.” Martin v. Martin, 326 S.W.3d 741, 749 (Tex. App.-Texarkana 2010, pet. denied). “[A] contract is sufficiently definite if a court is able to determine the respective legal obligations of the parties.” Capitol Wireless, LP v. XTO Energy, Inc., 02-12-00351-CV, 2014 WL 3696084, at *2 (Tex. App.-Fort Worth July 24, 2014, no pet.) (citation omitted). Finally, a contract also requires consideration to be enforceable. Plains Builders, Inc. v. Steel Source, Inc., 408 S.W.3d 596, 602 (Tex. App. 2013). “Consideration is a bargained-for exchange of promises or return performance and consists of benefits and detriments to the contracting parties.” Marx v. FDP, LP, 474 S.W.3d 368, 378 (Tex. App. 2015), review denied (Dec. 18, 2015). “Lack of consideration occurs when the contract, at its inception, does not impose obligations on both parties.” Bryant v. Cady, 445 S.W.3d 815, 820 (Tex. App. 2014), reh’g overruled (Oct. 28, 2014). Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 8 of 16 - 9 - As a matter of law, investments in infrastructure improvements made in anticipation of potential contracts are not recoverable under a breach-of-contract theory, absent the parties’ agreement to the contrary. See WTG Gas Processing, L.P. v. ConocoPhillips Co., 309 S.W.3d 635 (Tex. App.-Houston [14th Dist.] 2010, pet. denied). The WTG Gas case involved a breach-of-contract claim brought by a company which believed it had a contract to purchase a natural-gas processing facility, which was never ultimately sold to it. The parties entered into a bid procedure and the Court of Appeals found bidding did not constitute a binding contract, holding, “it is axiomatic that parties to a complex transaction may need to reach a preliminary agreement in order to proceed toward execution of a final agreement.” Id. at 648. Statements by the plaintiff in documents such as “‘going down the path’ of a sale” evidenced to the court there was no contract. Id. at 651. See also Medistar Corp., 267 S.W.3d at 158 (statements such as “preliminary,” “look forward to further discussions,” or “for discussion only” indicated no contract existed); John Wood Group USA, Inc. v. ICO, Inc., 26 S.W.3d 12, 20 (Tex. App.- Houston [1st Dist.] 2000, pet. denied) (letter’s statement that it was “not binding” save certain provisions established the parties’ intent not to be bound). The following discussion will address each of the alleged programs set out in Plaintiff’s Amended Complaint and demonstrate why Plaintiff has failed to state a valid claim as to each such program, either because Plaintiff attempts to recover costs it incurred unilaterally in preparing for expected agreements with Cummins, or because Plaintiff has set forth no detail establishing an agreement with Cummins ever occurred. a. Dual Source Project At pages 3-7 of its Amended Complaint (§ IV(D)), Plaintiff sets out allegations relating to the “Dual Source” project. Plaintiff alleges it engaged in discussions to “pursue a Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 9 of 16 - 10 - relationship” with Cummins, ¶ D(1), and was therefore invited to “submit information” about the “possibilities of doing business” with Cummins. ¶¶ D(1-2). Plaintiff alleges it was asked to develop manufacturing processes and demonstrate abilities “as a condition of awarding business” and alleges the development of these process and samples were part of “a detailed process” in order “to develop a quote.” Id. p. 4-5 ¶¶ D(3-4). Plaintiff alleges it focused on developing samples until November, 2014 and delivered the samples on or about January 10, 2015. Id. p. 5 ¶¶ D(5-6). Cummins is not alleged to have agreed to any project while the quote was developed. Plaintiff vaguely claims it was selected “for development as a Dual Source Supplier” around late March or early April, 2015. Id. p. 5 ¶ D(7) (emphasis added). There are no allegations about the terms or implications of this selection for “development” as a Dual-Source Supplier. In fact, Plaintiff pleads that after the alleged selection, it still needed “to provide additional samples in quantities sufficient for a formal statistical evaluation…to development the required processes and quote the…parts…” Id. Plaintiff then alleges that it learned in August 2015 that the project could be delayed, and that in November 2015 it learned that Plaintiff’s project “had not been approved” and that associated purchase orders had therefore been canceled. Plaintiff seeks $34,000 in damages relating to this program, an amount it claims consists of investments it made “to qualify as Dual Source Vendor,” as opposed to representing amounts due to Plaintiff under any binding contract. Id. p. 7 ¶ D(12); p. 21 ¶ B(4). As pleaded by Plaintiff, the work done “to qualify as Dual Source Vendor” was the development of samples and process evaluations to create quotes, based on its review of Cummins’ “specification and documentation.” See id. p. 4-5 ¶¶ D(4-5); p. 5-6 ¶ D(7). Yet Plaintiff nowhere alleges that the parties’ mutual intent was for Cummins to reimburse Plaintiff for its preparations to become a Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 10 of 16 - 11 - “Dual Source” vendor, to guarantee that Plaintiff’s anticipated work would occur, or to continue with the program despite changing business conditions. b. Shim Rework Project For the “Shim Rework” project, Plaintiff alleges it learned in March 2015 that there was a project available under which it “would be asked to generate” an expected volume of finished parts. Id. at p. 8 ¶ E(1). Plaintiff alleges it then provided samples and prepared a “Production Part Approval Process” (“PPAP”) during April, 2015 “in order to secure the project.” Id. p. 8 ¶ E(1). However, Plaintiff does not claim there was a reciprocal requirement for any action on Cummins’ part while Plaintiff developed the samples and process evaluation. Again, no specific terms are allegedly governing the sample and evaluation process. Not until May 11, 2015 is the first claim of an agreement on price allegedly reached, and no written agreement is alleged until August 25, 2015. Id. p. 8 ¶¶ E(3-4). Yet Plaintiff nonetheless seeks $10,375 for this project, representing charges it claims it incurred exclusively as part of the sample and evaluation process. See id. p. 8-9 ¶¶ E(1) (“In order to secure the project Plaintiff must provide samples and preparation of a PPAP at an estimated cost of $10,375.”); p. 21-22 ¶ (C)2, 6. Fundamentally, the Amended Complaint does not allege that Plaintiff is entitled to compensation for purchase orders that were fulfilled, but for which no payment occurred, or that there was a “meeting of the minds” between Plaintiff and Cummins to reimburse it for costs associated with developing samples and specifications. c. Washer/Shim Prototype Project With regard to the “Washer/Shim Prototype Project,” Plaintiff alleges at p. 9, § IV(F), that Cummins placed orders in August 2015 for “prototypes,” including “process validation” as well as preparation of PPAP (Production Part Approval Process) and APQP (Advanced Product Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 11 of 16 - 12 - Quality Planning) documentation. Plaintiff alleges it “invested approximately $34,689 in equipment, materials, travel, engineering, and other expenses in preparing to fulfill” expected purchase orders. Id. p. 10 ¶ F(4); p. 22 ¶ D(3). Again, although Plaintiff claims that it incurred expenses in preparing to fulfill purchase orders that were ultimately canceled, nowhere does Plaintiff suggest or allege that the parties agreed that Cummins would reimburse it for its preparatory costs or that Cummins was obligated to compensate it for work contemplated (but never completed) in connection with the Purchase Orders. d. Housing Rework Project Plaintiff alleges that “as a condition to grant the business” in connection with the “Housing Rework” project, Cummins asked it to prepare samples and Production Part Approval Process (PPAP) documentation. Id. p. 10 ¶ G(2); see also id. p. 23 ¶ E(3) (claiming entitlement to costs “required to set-up this project.”) Cummins allegedly requested the samples and PPAP documentation in September, 2015, which Plaintiff then provided. Id. It was not until February 2016, however, that Plaintiff alleges that it entered a “working agreement” with regard to this project. Again, nowhere does Plaintiff allege that Cummins agreed to reimburse it for costs it incurred to prepare for the possibility of doing business with Cummins, or that Cummins was required to continue purchasing components from Plaintiff. Rather, Plaintiff seeks $11,875 which it again alleges were only incurred to “comply with [the] request” to create samples and a PPAP. Id. e. CRIN Rework Plaintiff similarly seeks $3,385 “in producing samples, related engineering, and process development” for the “CRIN Rework” project. Am. Compl. p. 12 ¶ H(5); p. 23 ¶ F(1). At page 12 of the Amended Complaint, Plaintiff alleges the CRIN Rework Project involved a request for Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 12 of 16 - 13 - samples for evaluation (¶ H(2)) and a formal quote (¶ H(3)). Plaintiff does not claim Cummins ever accepted the quote or agreed for any work to be done by Plaintiff on this project, let alone that the parties reached a “meeting of the minds” by which Cummins would be obligated to compensate Plaintiff for the types of expenses claimed. f. MRC Injector Rework project Finally, in even more threadbare fashion, Plaintiff alleges in the Amended Complaint that the extent of its involvement with the “MRC Injector Rework” project was a request for samples by Cummins and a discussion of potential prices. Id. at p. 13 ¶¶ I(1-3). Based on these allegations, Plaintiff seeks an award of $3,385 representing its expenses “to produce the requested samples.” Id. p. 13 ¶ I(3); p. 24 ¶ G(2). As with the other projects discussed supra, these minimal allegations do not create a plausible claim upon which any relief can be granted. There is no alleged agreement whatsoever alleged for any recovery. Plaintiff has not attempted to lay out any details regarding essential terms of a commitment to enter into the project, a meeting of the minds, or any obligation on Cummins’ part. In summary, Plaintiff’s allegations as to each of the projects described above amount, at most, to claims that Plaintiff incurred costs “to qualify” as a vendor, p. 7 ¶ D(12); to “secure” anticipated projects, p. 8 ¶ E(1); in “preparing to fill” expected orders; p. 10 ¶ F(4); or to fulfill “a condition” to grant the business. Id. p. 10 ¶ G(2). These allegations demonstrate no intent by the parties that Cummins would be obligated to pay for preparatory costs Plaintiff unilaterally undertook in anticipation of potential business. “[A]rriving at the final terms of a complex, commercial transaction involves extensive time, effort, research, and finances.” WTG Gas Processing, 309 S.W.3d at 648. As alleged by Plaintiff, the proposed transactions involved extensive engineering and production work. All that Plaintiff seeks recovery for is the work it Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 13 of 16 - 14 - did in preparing to enter into a contract. The parties’ interactions in reaching terms for the projects do not present a basis for recovery, absent a meeting of the minds that Plaintiff would be reimbursed for its preparatory costs. Moreover, Plaintiff does not plead any of the elements of a valid contract which would independently permit recovery for its alleged investments. There are no allegations of any material terms, no meeting of the minds, and no indication of the parties’ intent to be bound. Plaintiff does not allege any consideration or agreed obligation by Cummins to undertake any actions following Plaintiff’s submittal of samples or process documentation. For these reasons, Plaintiff has failed to state a claim for breach of any contract with Cummins. CONCLUSION The Court must dismiss Plaintiff’s Amended Complaint because it fails to state a claim upon which relief may be granted. Plaintiff’s vague allegations do not meet the requisite pleading standards for Fraud or Breach of Contract. As a whole, the Amended Complaint fails to provide sufficient facts to provide enough facts to properly plead the claims sought. Count I lacks any facts plausibly showing that Cummins made knowingly false representations, instead relying on conclusory and unsupported recitation of elements. Likewise, Plaintiff has failed to plausibly show that it is entitled to relief for breach of contract based on expenses it occurred in anticipation of expected potential or possible business relationships. Accepting the Amended Complaint as true, it fails to state a claim that plausibly gives rise to relief, despite the fact that Plaintiff has already had one opportunity to amend its pleading. Accordingly, the Court should dismiss the Amended Complaint with prejudice. Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 14 of 16 - 15 - WHEREFORE, Defendant Cummins Inc. prays this Court enter an order dismissing with prejudice Plaintiff’s purported claims against Cummins, and grant any further relief the Court deems just and proper. Respectfully submitted, By: /s/ J. Eric Weslander LATHROP & GAGE LLP J.A. Felton, pro hac vice Missouri Bar #39549 J. Eric Weslander, pro hac vice Missouri Bar #63617 2345 Grand Boulevard, Suite 2200 Kansas City, Missouri 64108-2618 Telephone: (816) 292-2000 Telecopier: (816) 292-2001 jfelton@lathropgage.com eweslander@lathropgage.com Patricia L. Silva, pro hac vice Missouri Bar # 67213 Pierre Laclede Center 7701 Forsyth Blvd., Suite 500 Clayton, Missouri 63105 Telephone: (314) 613-2800 Telecopier: (314) 613-2801 psilva@lathropgage.com MOUNCE, GREEN, MYERS, SAFI, PAXSON & GALATZAN, P.C. Laura Enriquez, Texas State Bar No. 00795790 P. O. Drawer 1977 El Paso, Texas 79999-1977 Phone: (915) 532-2000 Telefax: (915) 541-1597 enriquez@mgmsg.com Attorneys for Defendant CUMMINS INC. Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 15 of 16 - 16 - CERTIFICATE OF SERVICE I hereby certify that on July 27, 2016, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Alfonso Soto The Soto Law Firm 11395 James Watt, Suite A-9 El Paso, Texas 79936 (915) 533-1906 (915) 533-1903 fax sototaxlaw@gmail.com Attorneys for Plaintiff /s/ J. Eric Weslander_________ An Attorney for Defendant Case 3:16-cv-00188-DCG Document 12 Filed 07/27/16 Page 16 of 16 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION ) AVIALAE S. DE. R.L. DE C.V., ) ) Plaintiff, ) Civil No. EP16CV0188 ) -vs- ) ) ) ) CUMMINS INC. ) Defendant ) ORDER This matter comes before the Court upon Defendant Cummins Inc.’s Motion to Dismiss filed July 27, 2016. After reviewing the Motion and being duly advised on the premises, the Court hereby ORDERS: the Motion is GRANTED, Plaintiff’s Complaint is DISMISSED WITH PREJUDICE, with each party to bear their own costs, fees and expenses. The Clerk is ORDERED to CLOSE this case. Dated this ____ day of _________ 2016 /s/ David C. Guaderrama United States District Judge Case 3:16-cv-00188-DCG Document 12-1 Filed 07/27/16 Page 1 of 1