CFA, INC. v. CONDUENT STATE & LOCAL SOLUTIONS, INC.

CourtDistrict Court, S.D. Indiana
DecidedAugust 18, 2023
Docket1:22-cv-01575
StatusUnknown

This text of CFA, INC. v. CONDUENT STATE & LOCAL SOLUTIONS, INC. (CFA, INC. v. CONDUENT STATE & LOCAL SOLUTIONS, INC.) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CFA, INC. v. CONDUENT STATE & LOCAL SOLUTIONS, INC., (S.D. Ind. 2023).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

CFA, INC., ) ) Plaintiff ) ) Cause No. 1:22-cv-1575-RLM-TAB v. ) ) CONDUENT STATE & LOCAL ) SOLUTIONS, INC., ) ) Defendant )

OPINION AND ORDER CFA, Inc. sued Conduent State & Local Solutions, Inc. in Marion County Superior Court, alleging breach of contract and unjust enrichment. Conduent removed the case to federal court and moves to dismiss. CFA moves to exclude materials Conduent attached to its reply brief. For the following reasons, the court grants both motions.

I. BACKGROUND A court considering a Rule 12(b)(6) motion to dismiss assumes the plaintiff’s well-pleaded facts are true, views the allegations in the light most favorable to the plaintiff, and draws all inferences in the plaintiff’s favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). CFA attached the contract between the State of Indiana and Conduent (“Prime Contract”) and the contract between CFA and Conduent (“Subcontract”) to the complaint. “A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes,” Fed. R. Civ. P. 10, but if the “instrument contradicts allegations in the complaint to which it is attached, the exhibit trumps the allegations,” Est. of Eiteljorg ex rel. Eiteljorg v. Eiteljorg, 813 F.

Supp. 2d 1069, 1080 (S.D. Ind. 2011) (quoting N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 454 (7th Cir. 1998)). The Prime Contract provides that Conduent would provide staffing services to the Indiana Family and Social Services Administration.1 It says the State awarded the Prime Contract to Conduent in part because of its Minority and/or Women’s Business Enterprise (“MBE/WBE”) participation plan. It lists CFA as

an MBE/WBE subcontractor that would participate in 15.26 percent of services under the Prime Contract. The Prime Contract requires Conduent to submit copies of its agreements with MBE/WBE subcontractors to the State’s Department of Administration, Division of Supplier Diversity. The Division of Supplier Diversity must review and approve any requests for changes to the MBE/WBE participation plan. Conduent’s “failure to comply with the provisions in [the MBE/WBE] clause may be considered a material breach of the [Prime] Contract.” [Doc. No. 1-2 at 25].

The complaint includes excerpts from the Division of Supplier Diversity’s MBE/WBE policy statement, which says contractors must use MBE/WBE subcontractors at their committed participation percentages and outlines the

1 The Prime Contract’s forum selection clause selects Indiana law, excluding its choice of law rules. procedures for modifying the MBE/WBE participation plan. Those procedures involve the subcontractor signing a notification document and the Division interviewing interested parties, including the subcontractor, to determine

whether a change is appropriate. Conduent and CFA entered into the Subcontract pursuant to the Prime Contract’s directive.2 The Subcontract says CFA will perform services under the Prime Contract for Conduent, as described in the Statement of Work. The Statement of Work provides that CFA (but not Conduent) must comply with the terms of the Prime Contract, and it incorporates particular parts of the Prime

Contract by reference. The Subcontract doesn’t explicitly include the 15.26 percent participation rate listed in the Prime Contract. The complaint alleges that the Subcontract incorporates that figure by reference because the Subcontract “is subordinate to the Prime Contract.” [Doc. No. 1-2 at 4, 95]. The Subcontract provides that “Conduent has the primary responsibility

for performance under the Prime Contract” and may perform, obtain from another entity, or otherwise remove any portion of the services being performed by CFA with 30 days’ written notice to CFA. Id. at 95, 134. Conduent agrees to pay CFA based on CFA’s invoices for services rendered and other pre-approved costs, subject to Conduent’s approval. The Subcontract says it is the entire

2 The Subcontract’s forum selection clause selects New York law, excluding its choice of law rules. agreement between the parties and supersedes any prior agreements that aren’t specifically referenced and incorporated into the Subcontract.

CFA provided services as agreed, and, as of April 11, 2022, Conduent has paid CFA $18,642,710.97. CFA alleges that Conduent has received $188,837,021 under the Prime Contract, so CFA is entitled to 15.26 percent (which it calculates as $28,816,529.40). CFA alleges Conduent either performed services that should have been allocated to CFA, contracted the services out to another subcontractor, or a combination of the two, but did so without amending the Prime Contract’s MBE/WBE participation plan or giving it 30 days’ notice

under the Subcontract. CFA sent Conduent an invoice for the difference between the amount Conduent has paid and the amount it says Conduent owes. Conduent disputes that it owes CFA the money and has refused to pay. CFA sued, alleging breach of both the Prime Contract and Subcontract and unjust enrichment. After

removing the case, Conduent moves to dismiss.

II. STANDARD OF REVIEW

A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). That statement “must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face,’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)), and raises a right to relief above the speculative level, Bell Atl. Corp. v. Twombly, 550 U.S. at 555. A plaintiff’s claim need only be plausible, not probable. Indep. Tr. Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 934-935 (7th Cir. 2012). A claim is

plausible if “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. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 556). “[A]n unadorned, the-defendant-unlawfully-harmed-me accusation” won’t suffice. Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555).

III. DISCUSSION A. Conduent’s Motion to Dismiss Conduent says the court should dismiss each of CFA’s claims.

CFA’s Claim for Breach of the Prime Contract Conduent argues that the court should dismiss CFA’s breach of contract

claim for the Prime Contract because CFA isn’t a third-party beneficiary, so it doesn’t have a right to enforce the Prime Contract. “Under Indiana law, generally only parties to a contract have rights under the contract.” Bowman v. Int’l Bus. Machs. Corp., 853 F. Supp. 2d 766, 769 (S.D. Ind. 2012) (citing Deckard v. Gen. Motors Corp., 307 F.3d 556, 561 (7th Cir. 2002)). A third party may enforce the contract if “(1) the parties to the

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CFA, INC. v. CONDUENT STATE & LOCAL SOLUTIONS, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/cfa-inc-v-conduent-state-local-solutions-inc-insd-2023.