United States District Court, D. New Jersey
H. RODRIGUEZ UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendants' Motion to
Dismiss Count I of the Complaint Asserting Fraud. Plaintiff
Dax, Inc. is in the business of performing mechanical and
electric repairs, maintenance, and testing, in matters
usually related to railway equipment. Id. at
¶¶ 2, 9. Defendant Southern New Jersey Rail Group
("SNJRG") is managed by its principal, Defendant
Bombardier Transportation (Holdings) USA, Inc.
("Bombardier"). Bombardier handled the relevant
contract issues in this matter on behalf of the SNJRG.
Id. at ¶¶ 6, 30.
to the Complaint, Defendants promised to use Dax as a
subcontractor for $530, 000 of work per year, over the course
of fifteen years, on a project associated with New Jersey
Transit ("NJT"). Id. at ¶¶
20-24, 26. Dax then began the task of preparing a workforce
to handle the anticipated work. The focus on preparing to
handle the promised sub-contract caused Dax to forgo other
business opportunities. Id. at ¶ 25. Defendant
was awarded the contract by NJT with a start date of March
14, 2015. Id. at ¶ 27. Plaintiff claims that
the award to Defendants was issued in part on reliance that
Defendants intended to use Dax to complete the work. However,
Plaintiff claims that instead of using it to perform the work
as promised, Defendants did most of the work itself.
Plaintiff alleges five causes of action sounding in fraud and
breach of contract. Defendants move pursuant to Fed.R.Civ.P.
12 (b) (6) to dismiss only Count I, which asserts a claim of
Rule of Civil Procedure 12(b)(6) allows a party to move for
dismissal of a claim based on "failure to state a claim
upon which relief can be granted." Fed.R.Civ.P.
12(b)(6). A complaint should be dismissed pursuant to Rule
12(b)(6) if the alleged facts, taken as true, fail to state a
claim. Fed.R.Civ.P. 12(b)(6). When deciding a motion to
dismiss pursuant to Rule 12(b)(6), ordinarily only the
allegations in the complaint, matters of public record,
orders, and exhibits attached to the complaint, are taken
into consideration.  See Chester County Intermediate
Unit v. Pa. Blue Shield, 896 F.2d 808, 812 (3d Cir.
1990). It is not necessary for the plaintiff to plead
evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434,
446 (3d Cir. 1977). The question before the Court is not
whether the plaintiff will ultimately prevail. Watson v.
Abington Twp., 478 F.3d 144, 150 (2007). Instead, the
Court simply asks whether the plaintiff has articulated
"enough facts to state a claim to relief that is
plausible on its face." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007).
order to state a claim for fraud under New Jersey law, a
plaintiff must allege (1) a material misrepresentation of
fact; (2) knowledge or belief by the defendant of its
falsity; (3) intention that the other person rely on it; (4)
reasonable reliance thereon by the other person; and (5)
resulting damage. Frederico v. Home Depot., 507 F.3d
188, 200 (3d Cir. 2007) (citing Gennari v. Weichert Co.
Realtors., 148 N.J. 582, 691 A.2d 350, 367-368 (N.J.
1997). Misrepresentation and reliance are the hallmarks of
any fraud claim. Banco Popular North America v.
Gandi, 184 N.J. 161, 876 A.2d 253, 261 (N.J. 2005).
pleading requirements for fraud, however, are more stringent
and receive greater scrutiny on a motion to dismiss. Rule
9(b) provides that "[i]n alleging fraud or mistake, a
party must state with particularity the circumstances
constituting fraud or mistake. Malice, intent, knowledge, and
other conditions of a person's mind may be alleged
generally." Fed.R.Civ.P. 9(b). Pursuant to Rule 9(b), a
plaintiff must plead "with particularity 'the
circumstances of the alleged fraud in order to place the
defendants on notice of the precise misconduct with which
they are charged, and to safeguard defendants against
spurious charges of immoral and fraudulent
behavior.'" Lum v. Bank of Am., 361 F.3d
217, 223-24 (3d Cir. 2004) (quoting Seville Indus. Mach.
Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d
are two ways to satisfy the particularity requirement.
See Lum. 361 F.3d at 224. First, a plaintiff may
plead the "date, place or time" of the fraudulent
act. Id. (quoting Seville. 742 F.2d at 791)
(internal quotations omitted). Second, a plaintiff may use
"alternative means [to] inject [ ] some measure of
substantiation into their allegations of fraud."
Id. (internal quotations omitted). Still, the
plaintiff must plead enough to substantiate the allegations
of fraud being made and may not rely on "conclusory
statements." NN & R. Inc. v. One Beacon Ins.
Group, 362 F.Supp.2d 514, 518 (D.N.J. 2005) (quoting
Mordini v. Viking Freight. Inc., 92 F.Supp.2d 378,
385 (D.N.J. 1999)). At a minimum, a plaintiff "must
allege who made a misrepresentation to whom and the general
content of the misrepresentation." Lum. 361
F.3d at 224. Significantly, the heightened pleading standard
required by Rule 9(b) applies to claims of fraud brought
under New Jersey law. Frederico v. Home Depot., 507
F.3d 188, 200 (3d Cir. 2007).
Court finds that the Complaint sets forth a claim of fraud
with sufficient particularity to survive scrutiny under
Fed.R.Civ.P. 9. In paragraphs 36-52, the Complaint details
facts relevant to Plaintiffs assertion that Defendants
engaged in a "bait and switch" and, despite
awarding Dax with the sub-contract, never intended to fulfill
the terms of that sub-contract with Dax. Id. at
¶ 37. First, Defendants knew it needed a subcontractor
with the strength of Dax to secure the NJT award.
Id. at ¶ 16. Defendants then described amended
its bid to reflect an increase in the involvement of Dax to
secure the NJT award. Id. at ¶¶ 21-23. As
the start date loomed, Defendants continued to reassure Dax
of its involvement in an effort to win the contract. Once the
contract was awarded to Defendants, it began, over the course
of two years to perform the work itself. Id. at
¶¶ 37-38. Over that time, the presence of Dax on
the jobsite was decreased, Defendants attempted to
renegotiate the sub-contract, key Dax employees were hired
directly by Defendants, and, ultimately, Dax was told to no
longer report to the project. Id. at ¶¶
39-41, 43-44. Plaintiff claims that these collective actions
sufficiently set forth a claim of fraud. The Court agrees.
motion is denied. An appropriate Order shall issue.
"Although a district court
may not consider matters extraneous to the pleadings, a
document integral to or explicitly relied upon in the
complaint may be considered without converting the motion to
dismiss into one for summary judgment." U.S. Express
Lines. Ltd. v. Higgins.281 F.3d 383, 388 (3d Cir. 2002)