United States District Court, M.D. Florida, Orlando Division
MIDAMERICA C2L, INC. and SECURE ENERGY, INC., Plaintiffs,
SIEMENS ENERGY, INC., Defendant.
G. Byron United States District Judge
cause comes before the Court on Defendant's Motion to
Dismiss Pursuant to Rule 12(b)(6) and Memorandum of Law in
Support Thereof (Doc. 16), filed September 20, 2016.
Plaintiffs responded in opposition on November 4, 2016. (Doc.
24). Upon consideration, the Court will grant in part and
deny in part Defendant's Motion to Dismiss.
lawsuit arises out of a contract dispute between Plaintiffs,
Secure Energy, Inc. (“Secure”) and its
subsidiary, MidAmerica C2L, Inc. (“C2L”), and
Defendant, Siemens Energy, Inc. (“Siemens”). On
December 21, 2007, Secure and Siemens executed a contract
(the “2007 Contract”) wherein Siemens agreed to
sell certain equipment to Secure for use at a coal
gasification plant located in Decatur, Illinois, where Secure
would convert coal into natural gas. (Compl. ¶¶
5-7). Secure paid Siemens approximately $40 million for the
equipment. (Id. ¶ 9). Secure and Siemens later
executed an agreement terminating the 2007 Contract,
acknowledging that both had fulfilled their contractual
obligations to each other thereunder. (Id. ¶
18, 2012, C2L and Siemens executed a License and Service
Agreement (the “2012 License Agreement”) whereby
Siemens granted C2L a license to use certain of its patented
technologies for the development, construction, and operation
of a coal gasification plant located in West Paducah,
Kentucky, where C2L would convert coal into methanol.
(Id. ¶ 14). In exchange, C2L agreed to pay a
license fee to Siemens. (Id.). The 2012 License
Agreement also required Siemens to supply C2L with the
patented technologies and provide C2L with all necessary
engineering services, technical field assistance, and
training. (Id. ¶ 15). Siemens further agreed to
guarantee the performance of the equipment C2L would use at
the West Paducah plant, which would be the same equipment
Secure previously purchased from Siemens under the 2007
Contract. (Id. ¶¶ 15, 16). At all relevant
times, Siemens promised to honor its obligations and
guarantees contained within the 2012 License Agreement.
(Id. ¶ 18). Due to Siemens' promises,
Secure and C2L entered into contracts with third parties to
purchase coal to use at the West Paducah plant. (Id.
point in 2014, Secure and C2L claim that Siemens made the
decision to begin winding down its coal gasification division
with the intent to eventually withdraw from the coal
gasification market entirely, but that Siemens did not
disclose this decision to either Secure or C2L. (Id.
¶¶ 19, 21). In fact, in July 2015, Siemens assured
Secure and C2L that it would continue to provide support for
the equipment to be used at the West Paducah plant and would
continue to abide by the terms of the 2012 License Agreement.
(Id. ¶ 33).
on February 2, 2016, Siemens notified Secure and C2L that it
was indeed closing its coal gasification division.
(Id. ¶ 20). Siemens further advised that it
would no longer provide the support promised in the 2012
License Agreement and would no longer guarantee the
performance of the equipment purchased under the 2007
Contract. (Id.). Secure and C2L believe that Siemens
knew all along that it would be withdrawing from the coal
gasification market, but concealed that information.
(Id. ¶¶ 21, 34). This lawsuit ensued.
their Complaint, Secure and C2L allege four claims against
Siemens. In Count I, Plaintiffs allege that Siemens breached
the 2012 License Agreement by repudiating its obligations. In
Count II, Plaintiffs allege that Siemens breached the
warranty of fitness for particular purpose by selling
equipment and licensing technologies which were unfit for
building and operating the coal gasification plant in West
Paducah. In Count III, Plaintiffs allege that Siemens
fraudulently misrepresented that it would honor its
obligations under the 2012 License Agreement. And in Count
IV, Plaintiffs allege that Siemens fraudulently
misrepresented that its coal gasification equipment and
technologies were suitable for use at the West Paducah plant.
Siemens now moves to dismiss the Complaint in its entirety
pursuant to Federal Rule of Civil Procedure 12(b)(6).
STANDARD OF REVIEW
12(b)(6) motion to dismiss tests the legal sufficiency of the
plaintiff's complaint. In order to survive the motion,
the complaint must “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A claim is plausible
on its face when the plaintiff alleges enough facts to
“allow 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). The mere recitation of the elements of a
claim is not enough, and the district court need not give any
credence to legal conclusions that are unsupported by
sufficient factual material. Id. District courts
must accept all well-pleaded allegations within the complaint
and any documents attached thereto as true and must read the
complaint in the light most favorable to the plaintiff.
Hunnings v. Texaco, Inc., 29 F.3d 1480, 1484 (11th
Cir. 1994) (per curiam).
Count I: Breach of Contract
moves to dismiss Plaintiffs' breach of contract claim on
the ground that Plaintiffs fail to sufficiently allege
recoverable damages. Specifically, Siemens contends that the
damages Secure and C2L seek in their Complaint are barred by
a limitation of liability provision contained within the 2012
License Agreement. Plaintiffs dispute that the limitation of
liability provision acts in the way Siemens suggests.
order to state a claim for breach of contract under New York
law,  a plaintiff must allege sufficient facts
demonstrating (1) the existence of a contract, (2)
performance of the contract, (3) the defendant's breach
of the contract, and (4) damages resulting from the
defendant's breach. Int'l Gateway Exch., LLC v.
W. Union Fin. Servs., Inc., 333 F.Supp.2d 131, 141
(S.D.N.Y. 2004). With respect to damages, a breach of
contract claim must be dismissed if the contract on which the
claim is ...