ASCENTIUM CAPITAL LLC v. PREMIERE COPIER INC (2023)

ORDER

This matter is before the Court on Plaintiff's Motion to Dismiss Defendant's Second Amended Counterclaims [Docket No. 46]. The Court has jurisdiction under 28 U.S.C. § 1332.

I. BACKGROUND 1

Plaintiff and counterclaim defendant Ascentium Capital LLC (“Ascentium”) is a commercial lender that provides equipment and technology financial solutions to companies. Docket No. 37 at 3, ¶ 7. Defendant and counter claimant Premiere Copier, Inc. (“Premiere”) is a Colorado corporation that sells copier machines and related equipment. Id. at 2-3, ¶¶ 2, 10. In November 2019, Premiere and Ascentium established a vendor relationship, whereby Ascentium would provide loans to customers who purchased commercial-grade copier machines and equipment from Premiere. Id. at 3, ¶ 9. On November 20, 2019, Premiere completed a Vendor Finance Program Profile and Funding Instructions (the “Vendor Profile”).² Id., ¶ 11. Ascentium accepted the Vendor Profile and approved Premiere as a new vendor. Id., ¶ 12. Under this relationship, Premiere would present a customer to Ascentium for consideration for a loan to purchase or lease copier machines and related equipment. Id. at 4, ¶ 19. Premiere would provide invoices to Ascentium for the sale of the copiers. Id., ¶ 20. Ascentium contracted directly with the customers on the loan transactions and it was “Ascentium's sole choice whether to proceed with providing a loan to any Borrower that Premiere presented.” Id. at 4-5, ¶¶ 21-22. If Ascentium approved the customer, Ascentium and the customer would execute a financing agreement. Id. at 5, ¶ 23. Premiere was not a party to the finance agreements. Id., ¶ 24.

Ascentium dispersed loan proceeds to Premiere to pay for the copiers, Premiere retained a portion of the money to pay for the copiers, and then Premiere distributed the rest of the funds to the customers. Id., ¶¶ 25-26. Throughout the relationship, David Carson, vice president of sales for Ascentium, primarily coordinated and directed the loans. Id., ¶ 28. Mr. Carson often dictated to Premiere what information to include on the invoices, including the purchase price and condition of the copiers. Id., ¶ 29. Ascentium knew that it was financing equipment and working capital loans, as well as that it was fixing the price of copiers in a manner advantageous to its portfolio. Id. at 6, ¶ 36.

Ascentium terminated its vendor relationship with Premiere in August 2021 when some of the customers defaulted on the loans. Id. at 7, ¶ 38. Shortly after, Premiere received a demand from Ascentium for $3.7 million to cover the defaulting loans. Id., ¶ 39. When Premiere refused to cover the defaulting loans, Ascentium filed this action. Id., ¶ 42. Ascentium filed the lawsuit against Premiere to force Premiere to pay the $3.7 million demand. Id. at 8, ¶ 52.

Premiere's business model relies on its customers obtaining financing for the equipment. Id. at 12, ¶ 90. In addition to Ascentium, Premiere had vendor relationships with other lending institutions including Balboa Capital, Global Financial Services, Navitas Credit Corporation, Pitney Bowes Financial, TimePayment Corporation, and Xerox Financial Services (collectively the “Existing Lenders”). Id. at 7, ¶ 44. Premiere's contractual relationship with each of the Existing Lenders was governed by an express contract or an implied in fact contract. Id., ¶ 47. For example, Premiere's relationship with Balboa Capital was governed by the Balboa Capital Vendor Agreement, dated November 19, 2019. Id., ¶ 48. Pursuant to the contractual relationships with the Existing Lenders, Premiere would present borrowers to the Existing Lenders for consideration of a loan and the Existing Lenders would then contract with the borrowers on the loan transaction. Id. at 8, ¶ 49.

Shortly after Ascentium filed this action on March 4, 2022, the Existing Lenders terminated their relationships with Premiere. Id., ¶ 54. For example, on March 5, 2022, Xerox called Premiere and terminated the relationship. Id., ¶ 56. After the Existing Lenders terminated their relationships with Premiere, Premiere explored new vendor relationships with lending partners, including CIT Bank and NFS Leasing (collectively the “Prospective Lenders”). Id. at 9, ¶ 61. NFS Leasing was willing to fund over $750,000 in loans for Premiere's customers. Id. at 10, ¶ 69. When the Prospective Lenders learned about this lawsuit, they declined to establish a vendor relationship with Premiere. Id., ¶ 66. For example, the vice president of sales for NFS Leasing told Premiere on June 3, 2022 that the company “made the decision not to move forward with a program for Premiere Copy” because it “was spooked by the Ascentium lawsuit.” Id., ¶ 68. Ascentium, directly or indirectly through third-parties, informed the Existing Lenders and the Prospective Lenders of the lawsuit for the purpose of interfering with Premiere's business. Id. at 8, 10, ¶¶ 57, 70. As a lender, Ascentium knew that the lawsuit would result in the Existing Lenders terminating their contractual relationships with Premiere and would result in the Prospective Lenders declining to establish vendor relationships. Id. at 8, 10, ¶¶ 53, 65. As a result of losing these relationships, Premiere customers have been unable to finance the purchase of copier machines, thereby reducing Premiere's gross revenue. Id. at 10, ¶ 71.

II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must allege enough factual matter that, taken as true, makes the plaintiff's “claim to relief ․ plausible on its face.” Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The ‘plausibility’ standard requires that relief must plausibly follow from the facts alleged, not that the facts themselves be plausible.” RE/MAX, LLC v. Quicken Loans Inc., 295 F. Supp. 3d 1163, 1168 (D. Colo. 2018) (citing Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008)). Generally, “[s]pecific facts are not necessary; the statement need only ‘give the defendant fair notice of what the claim is and the grounds upon which it rests.’ ” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555) (alterations omitted). A court, however, does not need to accept conclusory allegations. See, e.g., Hackford v. Babbit, 14 F.3d 1457, 1465 (10th Cir. 1994) (“[W]e are not bound by conclusory allegations, unwarranted inferences, or legal conclusions.”).

“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not shown – that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quotations and alterations omitted); see also Khalik, 671 F.3d at 1190 (“A plaintiff must nudge [his] claims across the line from conceivable to plausible in order to survive a motion to dismiss.” (quoting Twombly, 550 U.S. at 570)). If a complaint's allegations are “so general that they encompass a wide swath of conduct, much of it innocent,” then plaintiff has not stated a plausible claim. Khalik, 671 F.3d at 1191 (quotations omitted). Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Bryson, 534 F.3d at 1286 (alterations omitted).

III. ANALYSIS

A. Tortious Interference with Contract and Tortious Interference with Prospective Business Advantage

To state a claim for intentional interference with contract under Colorado law, Premiere must allege that (1) Premiere had a contract with a third party; (2) Ascentium knew or reasonably should have known of the contract; (3) Ascentium by words, conduct, or both, intentionally caused the third party to not perform or terminate its contract with Premiere; (4) Ascentium's interference with the contract was improper; and (5) Ascentium's interference with the contract caused Premiere damages. See Eagle Valley Clean Energy, LLC v. Wellons, Inc., No. 18-cv-1568-RBJ, 2019 WL 427609, at *4 (D. Colo. Feb. 4, 2019); Colo. Jury Instr., Civil 24:1; Warne v. Hall, 373 P.3d 588, 595 (Colo. 2016). A claim for tortious interference with prospective business advantage has identical elements as a claim for intentional interference with contract, with the “exception that an existing contract need not be alleged.” Campfield v. State Farm Mut. Auto. Ins. Co., 532 F.3d 1111, 1122 (10th Cir. 2008). Rather, Premiere must show “that there was a reasonable likelihood that a contract would have resulted but for the wrongful interference.” Id.; see also Titan Mfg. Sols., Inc. v. Nat'l Cost, Inc., No. 19-cv-1749-WJM-SKC, 2021 WL 307509, at *5 (D. Colo. Jan. 29, 2021). Accordingly, the Court will address the two claims at the same time.

Ascentium argues that Premiere's counterclaims for intentional interference with contract and prospective business advantage fail as a matter of law because the claims are comprised exclusively of conclusory statements. Docket No. 46 at 6-11. Specifically, Ascentium asserts that each element of the intentional interference claims lacks factual support. See id. Premiere argues it has pleaded sufficient facts to assert plausible claims for tortious interference with contract and prospective business advantage. Docket No. 54 at 7-13.

The Court finds that Premiere has alleged sufficient facts to state plausible claims for intentional interference with contract and tortious interference with prospective business advantage. First, Premiere has sufficiently alleged the existence of contracts with the Existing Lenders and a reasonable likelihood of contracts with the Prospective Lenders. Premiere alleges that it had contracts with Existing Lenders — including Balboa Capital, Global Financial Services, Navitas Credit Corporation, Pitney Bowes Financial, TimePayment Corporation, and Xerox Financial Services — and describes the purpose of the contracts. Docket No. 37 at 7-8, ¶¶ 44, 47-48, 49. Premiere identifies that its contractual relationship with Balboa Capital was governed by an agreement dated November 19, 2019. Id. at 7, ¶ 48.³ Premiere also alleges a reasonable likelihood of future contracts with Prospective Lenders, including CIT Bank and NFS Leasing. Id. at 9-10, ¶¶ 61, 66, 68-69. In particular, NFS Leasing was willing to establish a relationship with Premiere and fund over $750,000 in loans for Premiere's customers, but NFS Leasing told Premiere that it “made the decision not to move forward with a program for Premiere” because it “was spooked by the Ascentium lawsuit.” Id. at 10, ¶¶ 68-69. Accordingly, Premiere has adequately alleged the first element.

Second, Premiere has plausibly alleged that Ascentium knew or reasonably should have known of the contracts or prospective contracts. Premiere alleges that Ascentium knew or should have known of Premiere's relationship with Existing Lenders and the Prospective Lenders, id. at 11-13, ¶¶ 79, 95, because Ascentium informed the Existing Lenders and Prospective Lenders of the lawsuit for the purpose of interfering with Premiere's business. Id. at 8, 10, ¶¶ 57, 70. The Court finds that these allegations are sufficient to establish the knowledge element of the claims.

Third, Premiere has plausibly alleged that Ascentium, through words and conduct, intentionally caused the Existing Lenders to terminate their contracts with Premiere and intentionally prevented the formation of contracts with the Prospective Lenders. “With respect to intent, the relevant inquiry is whether a defendant acted for the purpose, in whole or in part, of bringing about a particular result, or if a person knows his or her acts or words are likely to bring about that result.” Antarctica Films Argentica, S.A. v. Gaia, Inc., No. 22-cv-00500-NYW-STV, 2023 WL 2574371, at *13 (D. Colo. Mar. 20, 2023) (internal quotations and citation omitted). Premiere alleges that Ascentium filed the lawsuit against Premiere to force Premiere to pay the $3.7 million demand. Docket No. 37 at 8, ¶ 52. Premiere states that Ascentium informed the Existing Lenders and Prospective Lenders of the lawsuit for the purpose of interfering with Premiere's business. Id. at 8, 10, ¶¶ 57, 70. Premiere alleges that because Ascentium is in the same business as the Existing and Prospective Lenders, Ascentium knew that the lawsuit would result in the lenders terminating their contractual or prospective relationships with Premiere. Id. at 8, 10, ¶¶ 53, 70. Premiere states that shortly after Ascentium filed the lawsuit, the Existing Lenders terminated their relationships with Premiere and the Prospective Lenders declined to establish relationships with Premiere. Id. at 8, 10, ¶¶ 54, 66. These allegations are sufficient to establish the intent element of the claims.

Fourth, Premiere has plausibly alleged that Ascentium acted improperly. The Colorado Supreme Court has “never attempted to rigidly define ‘improper’ for all purposes of interference with contract” because the inquiry is highly dependent on the facts of each case. Warne, 373 P.3d at 595-96. However, the Colorado Supreme Court has articulated some relevant factors including, the nature of the actor's conduct and his motive, the interests of the other party, the interests sought to be advanced by the actor, the social interests in protecting the freedom of action of the actor and the contractual interests of the other party, the proximity of the actor's conduct to the interference, and the relationship between the parties. Id. at 596. Premiere alleges that Ascentium had an improper motive in filing the lawsuit because it filed the lawsuit to force Premiere to pay the $3.7 million demand. Docket No. 37 at 8, ¶ 52. Premiere argues that Ascentium's lawsuit is frivolous, id. at 12, ¶ 87, because Ascentium was involved in the purportedly fraudulent scheme: Mr. Carson directed Premiere to change information on the invoices and Ascentium knew it was fixing the price of the copiers to benefit its portfolio. Id. at 5-6, ¶¶ 29, 36. Ascentium informed the Existing Lenders and Prospective Lenders of the lawsuit for the purpose of interfering with Premiere's business. Id. at 8, 10, ¶¶ 57, 70. The allegations also establish that Ascentium's conduct was proximate to the interference. See id. at 8, 10, ¶¶ 54, 56, 57, 70 (describing how Existing and Prospective Lenders terminated their relationships after hearing about the lawsuit). Construing the allegations in the light most favorable to Premiere, Premiere has sufficiently alleged that Ascentium acted improperly.

Finally, Premiere has adequately established damages. Premiere's business model relies on its customers obtaining financing for the copier machines. Id. at 12, ¶ 90. As a result of losing the relationships with Existing Lenders and Prospective Lenders, Premiere has suffered a decrease in gross revenue because Premiere customers have been unable to finance the purchase of copier machines. Id. at 10, ¶ 71. In sum, the Court concludes that Premiere has adequately pled its counterclaims for intentional interference with contract and tortious interference with prospective business advantage. Accordingly, the Court denies this portion of Ascentium's motion to dismiss.

B. Breach of Good Faith and Fair Dealing

Under Colorado law, “[e]very contract contains an implied duty of good faith and fair dealing.” Peace v. Parascript Mgmt., Inc., 59 F. Supp. 3d 1020, 1029 (D. Colo. 2014) (quoting Wells Fargo Realty Advisors Funding, Inc. v. Uioli, Inc., 872 P.2d 1359, 1362 (Colo. App. 1994)). However, “a necessary predicate for a claim for breach of the covenant of good faith and fair dealing is the existence of a contract, as the claim generally must be tied to a specific contract term that allows for discretion on the part of either party.” Id. (quoting Occusafe, Inc. v. EG & G Rocky Flats, Inc., 54 F.3d 618, 624 (10th Cir. 1995) (internal quotations omitted)).

Ascentium argues that Premiere's counterclaim for breach of good faith and fair dealing fails because the Vendor Profile is not an express or implied in fact contract. Docket No. 46 at 12-13. Premiere argues that the Vendor Profile constitutes an express contract because it demonstrates the basic elements of contract formation, including offer, acceptance, and consideration. Docket No. 54 at 14.

The Court finds that the Vendor Profile is not an express contract between Ascentium and Premiere. The essential elements of a contract are “competent parties, subject matter, a legal consideration, mutuality of agreement, and mutuality of obligation.” Peterson v. Trailways, Inc., 555 F. Supp. 827, 830 (D. Colo. 1983) (citing Denver Truck Exch. v. Perryman, 307 P.2d 805, 810 (Colo. 1957)). The Vendor Profile ⁴ does not manifest any legal consideration, mutuality of agreement, or mutuality of obligation. See Docket No. 46-1 at 3-4; Peterson, 555 F. Supp. at 830. The Vendor Profile states that Ascentium's “first step is to better understand your financing needs” and only requests Premiere's business information and details regarding the company's products. Docket No. 46-1 at 3-4. The Vendor Profile does not describe what Ascentium promised Premiere and what Premiere promised Ascentium in return to establish the alleged contract. See generally id. Premiere argues that the Vendor Profile imposes an obligation on Premiere in connection with the loans between Ascentium and the customers because the Vendor Profile states, “[i]f funds to which Payee [Premiere] is not entitled are deposited into Payee's account, Payee agrees to promptly remit any such funds to, or as directed by Ascentium.” Docket No. 54 at 15 (citing Docket No. 46-1). Even if this statement constitutes an obligation for Premiere, it does not evince a mutual obligation between the parties. Peterson, 555 F. Supp. at 830. The Vendor Profile contains no descriptions of Ascentium's obligations or duties. See Docket No. 46-1 at 3-4. Accordingly, the Vendor Profile is not an express contract between the parties.

Premiere briefly argues that if the Vendor Profile does not constitute an express contract, then it is an implied in fact contract. Docket No. 54 at 15. “The only difference between an implied contract and an express contract is that an implied contract arises from the parties’ conduct, and an express contract arises from written or oral words.” Trujillo v. City of Colorado Springs, No. 07-cv-00753-MSK-BNB, 2008 WL 511890, at *3 (D. Colo. Feb. 22, 2008) (citing Agritrack, Inc. v. DeJohn Housemoving, Inc., 25 P.3d 1187, 1192 (Colo. 2001)). Premiere's amended answer contains no allegations demonstrating that the parties’ conduct created any mutual obligations. See generally Docket No. 37. The amended answer states that Premiere would refer customers to Ascentium, but it “was Ascentium's sole choice whether to proceed with providing a loan to any Borrower that Premiere presented.” Id. at 5, ¶ 22. The amended answer does not plead any allegations establishing the existence of an implied in fact contract between Ascentium and Premiere. Accordingly, Premiere's counterclaim for breach of good faith and fair dealing fails as a matter of law. See Peace, 59 F. Supp. 3d at 1029.

IV. CONCLUSION

It is therefore

ORDERED that Plaintiff's Motion to Dismiss Defendant's Second Amended Counterclaims [Docket No. 46] is GRANTED IN PART and DENIED IN PART. It is further

ORDERED that Premiere's third counterclaim is dismissed with prejudice.

FOOTNOTES

2.   Premiere labels the Vendor Finance Program Profile and Funding Instructions the “Vendor Contract.” Docket No. 37 at 3, ¶ 11.

3.   The Court rejects Ascentium's argument that Premiere must plead the specific terms and provisions of the contracts to establish the first element. See Docket No. 46 at 7.

4.   Generally, if a court considers matters outside the complaint in deciding a Rule 12(b)(6) motion, “the motion must be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). However, “if a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiff's claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss.” GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). Premiere refers to the Vendor Profile through its counterclaims. See Docket No. 37 at 3-4, 14-15, ¶¶ 11-19, 105-111. The Vendor Profile is central to Premiere's counterclaim for breach of good faith and fair dealing. See id. at 14-15, ¶¶ 105-111. Ascentium attached a copy of the Vendor Profile to its motion to dismiss. Docket No. 46-1; see also Docket No. 29-4 (Vendor Profile attached to Ascentium's amended complaint). Premiere does not dispute the authenticity of the Vendor Profile exhibit. See generally Docket No. 54. Accordingly, the Court will consider the Vendor Profile without converting the motion to dismiss to a motion for summary judgment.

PHILIP A. BRIMMER, Chief United States District Judge