Veritas Technologies LLC v. Cushman & Wakefield, Inc.

Background

Veritas Technologies LLC sued Cushman & Wakefield, Inc. (C&W) after Veritas ended an outsourcing agreement for convenience. The Master Service Agreement required C&W to continue providing services during a transition period and addressed amounts due when the agreement ended. The parties disputed responsibility for severance payments, environmental, health, and safety services, budget overruns in Brazil, and unpaid commission rebates.

C&W moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). At this stage, the court generally assumes the complaint’s factual allegations are true and asks whether those facts, if proved, would entitle the plaintiff to a legal remedy.

Rulings

The court denied C&W’s motion as to Veritas’s declaratory-judgment claim. The agreement was ambiguous about severance payments. Its provisions referred both to severance as a reimbursable pass-through expense payable “whenever payable” and to Veritas’s responsibility for amounts due only up to the termination date. The agreement also contained a two-year budget for “Severance Fees,” creating another uncertainty that could not be resolved on a pleadings motion.

The court denied the motion as to Veritas’s claim for commission rebates. Veritas alleged that the parties exchanged letters and held executive telephone conferences to resolve the dispute before litigation. Those allegations were sufficient at this stage to plead general compliance with the agreement’s dispute-resolution process.

The court denied the motion as to damages under Veritas’s breach-of-contract claim. C&W relied on the doctrine of laches, which requires proof of unreasonable delay and prejudice. The court found that C&W had made only general assertions about lost or degraded evidence and had not identified enough specific unavailable evidence to establish prejudice on the pleadings.

The court granted the motion as to Veritas’s account-stated claim. An account stated requires an agreement about the amount owed and a promise to pay. The court concluded that the Client Fee Share Report did not create a new agreement because the alleged debt was based on the existing Master Service Agreement, which specified the ranges for commission rebates.

The court denied the motion as to Veritas’s claim for breach of the covenant of good faith and fair dealing. Veritas alleged conduct beyond a simple failure to perform the contract, including altering a disengagement document to make it appear that Veritas had agreed to pay post-termination severance and refusing to pay rebates while billing Veritas for costs it allegedly did not owe. The court found these allegations sufficient to plead that C&W frustrated Veritas’s benefits under the agreement.

The court denied the motion as to Veritas’s claim for money had and received. Although the court rejected the account-stated claim, the money-had-and-received claim also sought recovery under other claims that remained undismissed, including breach of contract. Therefore, it did not automatically fail with the account-stated claim.

The court granted the motion as to Veritas’s unfair-competition claim, with leave to amend. Veritas sought restitution under California’s Unfair Competition Law but did not allege that its legal remedies for damages were inadequate. The court allowed amendment of that claim.

The court denied the motion as to Veritas’s unjust-enrichment claim. Veritas pleaded unjust enrichment in the alternative and limited it to circumstances in which the Master Service Agreement was void or unenforceable. The court concluded that this was sufficient at the pleading stage.

The court granted the motion as to Veritas’s request for exemplary damages. Because the requested damages were based on obligations arising from the Master Service Agreement, California law did not permit exemplary damages for that alleged contractual obligation.

Other Orders and Disposition

The court granted C&W’s request for judicial notice of three exhibits for limited purposes: screenshots showing the alleged altered documents, a table showing the initial severance amount requested, and a Client Fee Share Report showing the commission-rebate balance before a stated fee. The court did not take judicial notice of the accuracy or truth of the disputed information. It denied C&W’s requests concerning other exhibits and denied a request concerning the agreement because that document was already in the record.

In the final disposition, Judge Charles R. Breyer granted in part C&W’s motion as to the account-stated claim, unfair-competition claim, and request for exemplary damages, and denied in part the motion as to the remaining claims.