Glenn Construction Company, LLC v. Bell Aerospace Services, Inc. et al

Filing 18

MEMORANDUM OPINION AND ORDER as follows: Ordered that the 13 Motion to Exclude Matters Extraneous to the Complaint is denied. Ordered that the 7 Motion to Dismiss is granted in part and denied in part. The motion is granted insofar as it sought dismissal of the claims against it sounding in work and labor done and open account; the motion is denied in all other respects. Signed by Hon. Chief Judge Mark E. Fuller on 12/21/09. (sl, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA S O U T H E R N DIVISION G L E N N CONSTRUCTION COMPANY, LLC P la in tif f , v. B E L L AEROSPACE SERVICES, INC., a n d BARGE, WAGGONER, SUMMERS & CANNON, INC. D e f e n d a n ts. ) ) ) ) ) ) ) ) ) ) )

C A S E NO. 1:09-cv-250-MEF (W O ¯ D o Not Publish)

MEMORANDUM OPINION AND ORDER
IN T R O D U C T IO N T h is case is presently before the Court on a Motion to Dismiss Pursuant to Rule 1 2 (b )(6 ), which Defendant Bell Aerospace Services, Inc. ("Bell Aero") filed on April 23, 2 0 0 9 . (Doc. # 7.) A Motion to Exclude Matters Extraneous to the Complaint, which Plaintiff G le n n Construction Company, Inc. ("Glenn Construction") filed on May 7, 2009, is also u n d e r submission. (Doc. # 13.) The Court has considered the arguments of counsel both in s u p p o rt of and in opposition to the Motion together with the applicable authorities. For the re a s o n s set forth below, the Court finds that the Motion to Exclude is due to be DENIED and th e Motion to Dismiss is due to be GRANTED in part and DENIED in part. LEGAL STANDARD A Rule 12(b)(6) motion tests the legal sufficiency of the complaint. Therefore, the C o u rt will accept as true all well-pleaded factual allegations and view them in the light most f a v o ra b le to the plaintiff. See Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1057

(11th Cir. 2007); Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). While Federal Rule of Civil Procedure 8(a)(2) requires only that a complaint contain "a short and p la in statement of the claim showing that the pleader is entitled to relief," as a general matter, to survive a motion to dismiss for failure to state a claim, the plaintiff must allege "enough f a c ts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 5 5 0 U.S. 544, 570 (2007). Plaintiff's "[f]actual allegations must be enough to raise a right to relief above a speculative level on the assumption that the allegations in the complaint are tru e ." Id. at 555. It is not sufficient that the pleadings merely "[l]eave open the possibility th a t the plaintiff might later establish some set of undisclosed facts to support recovery." Id. a t 561 (internal quotation and alteration omitted). FACTUAL AND PROCEDURAL HISTORY A . Motion to Exclude Matters Extraneous to the Complaint B e c a u s e the Court's ruling on the Motion to Exclude will determine to some extent th e facts for purposes of the Motion to Dismiss, the Court must address it prior to reciting th e facts. Bell Aero attached a sixty-four-page "Evidentiary Submission" to its Motion to D is m iss . (Doc. # 7-2.) The evidentiary submission contained four exhibits. Exhibit A is the s ta n d a rd and general conditions portion of the construction contract that governs much of this d is p u te . Exhibits B and C are orders of dismissal in two related state court cases. Exhibit D is an engineer's written decision about Glenn Construction's work on the construction p r o je c t. Glenn Construction argues that the language of Rule 12(b)(6), which provides that if 2

"matters outside the pleadings are presented to and not excluded by the court, the motion m u s t be treated as one for summary judgment under Rule 56," requires that the Court exclude B e ll Aero's evidentiary submission. However, the Court is free to consider Exhibit A, even in the context of a motion to dismiss, because the Glenn Construction refers to the contract in the complaint and the contract is central to the its claims. Brooks v. Blue Cross & Blue S h ie ld of Fla., 116 F.3d 1364, 1369 (11th Cir. 1997) (per curiam). The same is true for E x h ib it D, another document central to the Glenn Construction's claims and refered to in the c o m p la in t. See id. Additionally, the Court may consider Exhibits B and C because "[t]he E le v e n th Circuit has held that, when considering a 12(b)(6) motion to dismiss, a court may ta k e judicial notice of the public record, without converting the motion to one for summary ju d g m e n t, because such documents are capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Davis v. Williams Commc'ns, In c ., 258 F. Supp. 2d 1348, 1352 (N.D. Ga. 2003) (citing Bryant v. Avado Brands Inc., 187 F .3 d 1271, 1279S80 (11th Cir. 1999). Therefore, the Motion to Exclude Matters Extraneous to the Complaint is due to be DENIED and the Court will consider the evidentiary s u b m iss io n s in ruling on the Motion to Dismiss. B . Factual and Procedural History The following facts are taken from the Complaint and Bell Aero's evidentiary s u b m iss io n , as they must be for purposes of this Motion. T h is dispute arises out of a contract for the expansion of Bell Aero's facility known a s "U.S. Helicopter, Phase I, Blackwell Field, Ozark, Alabama" ("the project"). Bell Aero 3

contracted with Glenn Construction to complete part of the expansion work on February 2, 2 0 0 7 . Defendant Barge, Waggoner, Summer & Cannon, Inc. ("BWSC"), was the project e n g in e e r for the project. 1. Certificate of Substantial Completion T h e bulk of the dispute for purposes of the Motion to Dismiss centers not on the actual c o n s tru c tio n phase of the project, but on the process of certifying its completion under the c o n tra c t. According to the contract, BWSC was to make the certification of substantial c o m p le tio n and certificate of payment, at which time Bell Aero would be obligated to pay G le n n Construction for its work on the project. BWSC never issued the requisite

c e rtif ic a tio n , and Bell Aero never paid Glenn Construction for its work on the project. The s p e c if ic facts alleged about this phase of the project are as follows: O n February 28, 2008, Glen Construction advised BWSC that the City of Ozark d e m a n d e d that BWSC be present for the final inspection. BWSC "was requested" to s c h e d u le an inspection with the City of Ozark as soon as possible. Glenn Construction a d v is e d BWSC that the hangar building would be substantially complete on February 29, 2 0 0 8 . On February 29, 2008, Glenn Construction believed that it was substantially complete w ith the project, except for the items listed and as authorized by Section 14.04A of the c o n s tru c ti o n contract, which governed "substantial completion." Glenn Construction req u e s te d BWSC to issue a "Certificate of Substantial Completion" and have a representative p re s e n t during the inspection. On March 6, 2008, Michael Cole of BWSC responded that the O w n e r could not and would not accept the project although Glenn Construction had complied 4

with General Condition 14.04, Substantial Completion. On March 13, 2008, BWSC told G le n n Construction that BWSC planned to issue a certificate of substantial completion the n e x t day. BWSC also represented that it needed a written request from Glenn Construction f o r the certificate. On March 14, 2008, Glenn Construction responded "We did send a notice of s u b s ta n tia l completion with our last pay request." BWSC responded: "You did not request th e Engineer issue a certificate of substantial completion. You only stated that Glenn C o n s tru c tio n determined substantial completion was established on Friday, February 28. B W S C made a site visit on March 3, 2008, and determined that the project was not s u b s ta n tia lly complete. I have never received a request for a certificate of substantial c o m p le tio n . Please send me something asking for it so that I can issue it today." Glenn Construction issued Bulletin Number 00152, incorrectly dated February 29, 2 0 0 8 . The bulletin referred to the fact that Glenn Construction considered that is was s u b s ta n tia lly complete as of February 29, 2008, but clearly requested a "certificate of S u b s ta n tia l Completion." As a result of this Glenn Construction claims "BWSC has refused to carry out its duty to issue the final Certificate of Payment and has thereby frustrated and h a m p e re d Glenn Construction's receipt of payment." On March 25, 2008, the Certificate of Occupancy was issued by the City of Ozark. Bell Aero failed to pay the balance due on the contract. 2. Subcontractors O n e of Bell Aero's arguments relies on Glenn Construction's use of unlicensed 5

subcontractors, and the facts relevant to that argument are as follows: Glenn Construction re ta in e d subcontractors Skipper Construction and Team Building Construction to perform v a rio u s parts of the contract between it and Bell Aero. The Circuit Court of Dale County, A labam a, dismissed an action filed by Skipper Construction against Glenn Construction, Bell A e ro , and Hartford Casualty Insurance Company, saying only "Counterplaintiff's Motion to D is m iss filed by Glenn Construction Co. LLC is hereby GRANTED." (Doc. # 7-2 at 41.) The same court dismissed an action filed by Team Building Construction against Glenn C o n s tru c tio n , Michel Glenn Wolfe, Bell Aero, and BWSC without comment. (Doc. # 7-2 a t 44S45.) DISCUSSION B e ll Aero makes several arguments it maintains compel dismissal of the claims a g a in s t it. First, Bell Aero argues that the Complaint does not state a claim on which relief c a n be granted because it affirmatively alleges that a condition precedent to Bell Aero's p e rf o rm a n c e was not satisfied. Second, Bell Aero argues that Glenn Construction cannot m a in ta in this action because it hired Skipper Construction and Team Building Construction, u n l ic e n s e d contractors, in violation of Alabama's General Contractor's Practice Act, Ala. C o d e . § 34-8-1 et seq. Third, Bell Aero argues that the claims against it are barred by the te rm s of the contract because Glenn Construction did not comply with the dispute resolution p ro c e d u re required by those terms. Finally, Bell Aero argues that the specific claims based u p o n an open account and for work and labor done are due to be dismissed because the terms o f the contract exclusively occupy the field of this dispute. 6

A. Failure to Satisfy Condition Precedent B e ll Aero argues that Glenn Construction's complaint fails to state a valid claim of b re a c h of contract against Bell Aero because, by Glenn Construction's own pleaded account, th e conditions precedent to Bell Aero having any obligation to make additional payments to G le n n Construction did not occur. Specifically, Bell Aero argues that its obligation to make p a ym e n ts to Glenn Construction did not arise until the work has been accepted by the project e n g in e e r and the project engineer makes its recommendation to the owner of the amount o w e d to Glenn Construction. This, so the argument goes, together with Glenn Construction's a lle g a tio n that "BWSC has refused to carry out its duty to issue the final Certificate of P a ym e n t and has thereby frustrated and hampered Glenn Construction's receipt of payment," f o re c lo s e s Glenn Construction's claims against Bell Aero. G le n n Construction strongly disagrees. First, Glenn Construction argues that it did n o t fail to plead satisfaction of conditions precedent because of allegations in the complaint th a t "Glenn Construction has satisfied all of its duties and responsibilities necessary under th e Construction Contract and is entitled to immediate release of said payments from the re ta in a g e ." (Doc. # 1 ¶ 208.) This argument fails to rebut Bell Aero's contention that the c o m p la in t affirmatively alleges that it had no obligation to pay Glenn Construction under the c o n tra c t until BWSC, not Glenn Construction, took specific actions. See Bama Budweiser o f Montgomery, Inc. v. Anheuser-Busch, Inc., 611 So. 2d 238, 245 (Ala. 1992) ("This Court h a s long recognized that when a party cannot perform a contract without obtaining the c o n s e n t of a third person who is free to withhold it, such consent is a condition precedent to 7

performance of the contract."). It follows that when a party fails to allege satisfaction of such a condition precedent--one that requires actions of a third party--his allegations fail to state a claim for breach of the subject contract. See Anderson v. Golden, 569 F. Supp. 122, 139 (S .D . Ga. 1982) (holding that under Georgia law, "where the contract stipulates that final p a ym e n t to the contractor shall be due and payable upon the issuance of an architect's c e rtif ic a te of completion, it is essential to allege compliance with this condition in order to m a in ta in an action to recover the balance due under the contract or to enforce the collection th e re o f by foreclosure of a materialman's lien."). Therefore, Glenn Construction failed to p le a d satisfaction of a condition precedent to Bell Aero's performance under the contract. Unless something excuses this failure, the breach of contract claims against Bell Aero are d u e to be dismissed. Glenn Construction argues that its failure to allege satisfaction of the condition p re c e d e n t is excused by its allegations of fraud or bad faith on the part of BWSC. Glenn C o n s tru c tio n points out that the Alabama Supreme Court held in Catanzano v. Jackson, 73 S o . 510 (Ala. 1916), that While the parties to a contract may stipulate that the estimates of the work d o n e and of the compensation to be paid therefor shall be made by a third p a rty, who shall also have power and be charged with the duty to pass upon the c h a ra c te r of the workmanship employed and upon the quality of the materials u s e d , yet in this regard the action of such third party will be final and binding o n the parties only in the absence of fraud and bad faith. Id . at 512 (emphasis added); see also Shriner v. Craft, 51 So. 884, 888 (Ala. 1909) ("Where a building contract specially provides that the certificate of the architect shall be final and

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conclusive, it is conclusive and binding in its legal operation and effect on the parties to the c o n tra c t, and can be impeached only for fraud, or such gross mistakes as would imply bad f a ith or a failure to exercise an honest judgment."); see also Martinsburg & P.R. Co. v. M a r c h , 114 U.S. 549 (1885) (holding in a case where the contract provided that "whenever th e contract shall be completely performed on the part of the contractor, and the said engineer s h a ll certify the same in writing under his hand, together with his estimate aforesaid, the said c o m p a n y shall, within 30 days after the receipt of said certificate, pay to the said contractor, in current notes, the sum which, according to his contract, shall be due," that the contractor c o u ld not maintain an action for compensation without alleging the making of such c e rtif ic a te , or facts entitling him to sue without it; and that, in the absence of fraud, or such g ro s s mistake as would necessarily imply bad faith or a failure to exercise an honest ju d g m e n t, such estimate by the engineer was conclusive upon the parties).1 Here, Glenn C o n s tru c tio n has alleged that BWSC's refusal to certify completion was fraudulent. Therefore, failure to allege the satisfaction of the condition precedent is excused by the a lle g a tio n s that the failure was a result of fraudulent conduct by the party responsible for s a tis f yin g the condition.2 Thus, Glenn Aero's claims cannot be dismissed for failure to plead

There is some ambiguity in these admittedly old cases about whether the fraud or bad faith must be of the defendant owner or on the part of the third party engineer. Both Catanzano, 73 So. at 510-12, and Shriner, 51 So. at 888, seem to indicate that the fraud must be on the part of the engineer, though the language is not a model of clarity. Fortunately the Court need not wade into this murky area of Alabama law because Glenn Construction alleged fraud and/or bad faith on the part of both Bell Aero and BWSC. Glenn Construction also argues that because it alleges Bell Aero is in part responsible for the failure of the condition precedent, it cannot rely on that failure as a defense to performance under 9
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satisfaction of the condition precedent. B. Alabama's General Contractor's Practice Act N e x t, Bell Aero argues that, because a contractor who engages unlicensed subc o n tra c to rs is barred from enforcing the subject contract pursuant to the Alabama General C o n tra c to r's Practice Act, and Glenn Construction engaged unlicensed subcontractors, the A la b a m a General Contractor's Practice Act bars the instant action. Bell Aero claims that G le n n Construction previously secured dismissal of two state court actions against it, one by S k ip p e r Construction and one by Team Building Construction, because those contractors w e re not licensed Alabama subcontractors. Exhibits B and C are the judgments dismissing th o s e cases and Bell Aero's argument relies upon a characterization of these orders as prior ju d ic ia l determinations that Skipper Construction and Team Building Construction were not lic e n s e d subcontractors. The Court need not reach the issue of whether this suit is barred by the Act because B e ll Aero's argument relies on facts the Court cannot consider for purposes of this Motion. The two prior judicial "determinations" Bell Aero relies upon say nothing about whether S k ip p e r Construction and Team Builder Construction were licensed. While the Court is free to consider these court documents under Bryant v. Avado Brands Inc., 187 F.3d 1271, 1 2 7 9 S 8 0 (11th Cir. 1999), it must take them for what they are--evidence of the fact of

the contract. This argument has merit, too. See Ex parte Johnson, 993 So. 2d 875, 884 (Ala. 2008) ("It is a principle of fundamental justice that if a promisor is himself the cause of the failure of performance, either of an obligation due him or of a condition upon which his own liability depends, he cannot take advantage of the failure."); World's Exposition Shows, Inc. v. B.P.O. Elks, No. 148, 186 So. 721, 724 (1939) (same). 10

dismissal of two related cases, without comment. The two orders in evidence merely state th e fact of dismissal of both actions; they say nothing of why. The Court is not free at this ju n c tu re to take Bell Aero at its word. Therefore, the Motion to Dismiss is due to be denied to the extent is seeks dismissal of Glenn Constructions claims for failure to comply with the A la b a m a General Contractor's Practice Act.3 C . Contractual Dispute Resolution Procedure Bell Aero next claims that Glenn Construction's claims against it are due to be d is m is s e d because Glenn Construction failed to comply with the mandatory dispute re s o lu tio n procedure outlined in the governing contract. This argument is based upon the a p p lic a tio n of a contractual term that requires an aggrieved party to the contract to commence a n action challenging the engineer's determination about performance under the contract w it h i n sixty days of such decision. Bell aero uses this term, together with the date of B W S C 's decision in this case (January 12, 2009) and the date Glenn Construction c o m m e n c e d this action (March 25, 2009), to argue that Glenn Construction is bound by the e n g in e e r's determination, having commenced its case out of time. The Court denied Glenn Construction's Motion to Strike generally and specifically w ith respect to Exhibit D, the engineer's written decision on the contract. That document is d a te d January 12, 2009, and there can be no dispute that Glenn Construction commenced this a c tio n greater than sixty days from that date. However, Glenn Construction disputes the

Because of this holding, the Court does not reach the thornier issue of whether Bell Aero's version of the facts would operate to block Glenn Construction's claims. 11

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veracity of the date on the report, arguing in its response that the letter dated January 12, 2 0 0 9 , was back-dated and was neither sent nor received before February 10, 2009. According to the February 10 date, Glenn Construction's action was timely.4 The Court will n o t grant a motion to dismiss based on a disputed portion of an evidentiary exhibit because th e Court's authority to consider documents attached to the motion to dismiss is limited to d o c u m e n ts about which there is no dispute. See Fin. Sec. Assur., Inc. v. Stephens, Inc., 500 F .3 d 1276, 1284 (11th Cir. 2007) ("This court recognizes an exception, however, in cases in w h ic h a plaintiff refers to a document in its complaint, the document is central to its claim, its contents are not in dispute, and the defendant attaches the document to its motion to d is m is s ." ) (emphasis added); see also Pension Benefit Guar. Corp. v. White Consol. Ind., 998 F .2 d 1192, 1196 (3rd Cir. 1993) ( "[A] court may consider an undisputedly authentic d o c u m e n t that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's c la im s are based on the document."(emphasis added)); Hoffman-Pugh v. Ramsey, 193 F. S u p p . 2d 1295, 1297 n.1 (N.D. Ga. 2002). Hence, for purposes of this Motion to Dismiss, th e re is not uncontroverted evidence or allegations that evince a failure of Glenn C o n s tru c tio n to comply with the dispute resolution procedures in the contract. D . Claims for Work on Open Account and Work and Labor Done Bell Aero claims that Glenn Construction's claims based upon an alleged open a c c o u n t and work and labor done do not state cognizable causes of action because all rights

The Court need not consider Glenn Construction's other rebuttal arguments, and so makes no comment on their merit. 12

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and obligations of Glenn Construction and Bell Aero in the underlying transaction are s p e c if ic a lly dictated by express contractual terms. Glenn Construction argues Braswell v. M a lo n e , 78 So. 2d 631 (Ala. 1955), allows it to bring both causes of action. G le n n Construction cannot recover for work and labor done because the terms of the e x p re s s contract exclusively determine the rights of the party to it. Mantiply v. Mantiply, 951 S o . 2d 638, 656 (Ala. 2006) ("[W]hen an express contract exists, an argument based on q u a n tu m meruit recovery in regard to an implied contract fails"); Burgess Mining & Constr. C o . v. Lees, 440 So. 2d 321, 337 (Ala. 1983) ("[T]he obligation, if any, to pay for work and la b o r done rests on quantum meruit . . . ."). Braswell does not save Glenn Construction's c la im because that case provides for non-contractual recovery only where the defendant (here B e ll Aero) prevented the plaintiff (Glenn Construction) from performing the contract, and th e re are no such allegations in the Complaint. See Sanders v. J.W. Snyder Constr. Co., 681 S o . 2d 576, 579 (Ala. Civ. App. 1996). Indeed, Glenn Construction alleges that it fully p e rf o rm e d its obligations under the contract. Similarly, the existence of an integrated contract, final and complete as to all its terms, p re c lu d e s recovery under an open account theory. "An open . . . account is one where a p ro v is io n of the contract is left open for further negotiations." Wal-Mart Stores, Inc. v. A n n is to n Dev. Co., 856 So. 2d 218, 332 (Ala. 2002). Here, the contract is complete and final a s to all of its terms, so Glenn Construction cannot maintain an action for open account. Glenn Construction argues that the contract allows for changes and adjustments, particularly o f amounts payable to the contractor. However, the provisions in the contract that provide 13

for adjustments in payment do not change the Court's conclusion, as the adjustments must b e made in accordance with the terms of the contract, which are not themselves left open to f u rth e r negotiation. See id. at 220S21. Therefore, the Motion to Dismiss is due to be granted w ith respect to Glenn Construction's claims for work and labor done and open account. Accordingly, those claims are due to be dismissed. CONCLUSION F o r the foregoing reasons, it is hereby ORDERED that the Motion to Exclude Matters Extraneous to the Complaint (Doc. # 13) is DENIED. It is further ORDERED that the Motion to Dismiss (Doc. # 7) is GRANTED in part a n d DENIED in part. The Motion is granted insofar as it sought dismissal of the claims a g a i n s t it sounding in work and labor done and open account; the motion is denied in all o th e r respects. DONE this the 21st day of December, 2009.

/s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE

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