American Builders & Contractors Supply Co., Inc. v. Precision Roofing and Consulting, LLC et al
MEMORANDUM OPINION AND ORDER: It is hereby ORDERED as follows: 1. The Motion to Dismiss (Doc. # 25 ) is GRANTED as to counterclaim count IV. 2. The Motion to Dismiss (Doc. # 25 ) is DENIED but this case is STAYED as to counterclaim counts I, III, and IIII pending disposition of Precision Roofing and Consulting, LLC v. American Builders & Contractors Supply. Co., Inc. et al., Case No. 17-A0302202, pending the Superior Court of Gwinnett County, Georgia. Signed by Honorable Judge W. Harold Albritton, III on 8/9/2017. (kh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
AMERICAN BUILDERS & CONTRACTORS )
SUPPLY CO., INC., d/b/a ABC SUPPLY CO. )
PRECISION ROOFING AND
CONSULTING, LLC d/b/a PRECISION
ROOFING, INC., and MICHAEL S. DUNN, )
Civil Action No. 2:17CV97-WHA
MEMORANDUM OPINION AND ORDER
This cause is before the court on a Motion to Dismiss Defendant Precision Roofing and
Consulting, LLC’s Counterclaim Under Fed. R. Civ. P. 12(b)(1) and 12(b)(6) (Doc. #25), filed
by the Plaintiff, American Builders & Contractors Supply Co., Inc. (“ABC”).
ABC filed a Complaint bringing claims against the Defendant arising out of a
construction contract with the Defendants for installation of a roof at ABC’s Montgomery,
Alabama facility. Defendant Precision Roofing and Consulting, LLC counterclaimed, bringing
counterclaims against ABC for breach of express warranty (Count I), breach of implied
warranties (Count II), unjust enrichment (Count III), and breach of the contract for roof
installation at the Montgomery, Alabama facility (Count IV). ABC has moved to dismiss all four
For reasons to be discussed, the Motion to Dismiss is due to be granted as to
counterclaim count IV and the remaining counterclaim counts are due to be stayed.
STANDARDS FOR MOTION TO DISMISS
A Rule 12(b)(1) motion challenges the district court=s subject matter jurisdiction and
takes one of two forms: a Afacial attack@ or a Afactual attack.@ A Afacial attack@ on the complaint
requires the court to assess whether the plaintiff has alleged a sufficient basis for subject matter
jurisdiction, while a Afactual attack@ challenges the existence of subject matter jurisdiction based
on matters outside the pleadings. Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990).
The burden of proof on a Rule 12(b)(1) motion is on the party averring jurisdiction. Thomson v.
Gaskill, 315 U.S. 442, 446 (1942).
In the context of a Rule 12(b)(6) motion, the court accepts the factual allegations as true,
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984), and construes the pleading in the pleaders’
favor, Duke v. Cleland, 5 F.3d 1399, 1402 (11th Cir. 1993). In analyzing the sufficiency of
pleading, the court is guided by a two-prong approach: one, the court is not bound to accept
conclusory statements of the elements of a cause of action and, two, where there are wellpleaded factual allegations, a court should assume their veracity and then determine whether they
plausibly give rise to entitlement to relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
A[A] plaintiff's obligation to provide the >grounds= of his >entitle[ment] to relief= requires more
than labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.@ Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to
dismiss, a pleading need not contain Adetailed factual allegations,@ but instead must contain Aonly
enough facts to state a claim to relief that is plausible on its face.@ Id. at 570. The factual
allegations Amust be enough to raise a right to relief above the speculative level.@ Id. at 555.
The allegations relevant to the counterclaim counts brought by Precision Roofing and
Consulting, LLC (“Precision”) are as follows:
Precision is a company engaged in the business of installing and maintaining commercial
and industrial roofs. Precision alleges in its counterclaim that ABC distributed and sold roofing
material called thermoplastic polyolefin (“TPO”), which Precision ordered from ABC and
installed as roofs at hundreds of locations throughout its territory. Precision alleges that ABC
warranted that the products would be free of defects for at least 15 years. Beginning in 2011,
Precision began to receive reports from customers about defects in roofs installed using ABC’s
roofing material. Precision alleges that the roofing material was not designed or manufactured
consistent with the heat and humidity present in the southeastern United States. Precision began
to set-off funds due to ABC. Beginning in October of 2016, ABC withheld payment to Precision
of funds due for installation of a roof at a facility in Montgomery, Alabama.
On February 17, 2017, ABC filed the Complaint in the instant case bringing claims
against Precision arising from the roof installation at the Montgomery, Alabama facility.
On March 28, 2017, Precision filed a Complaint in the Superior Court of Gwinnett
County, Georgia. In that Complaint, Precision brought claims against ABC, Carlisle
Construction Materials, LLC; Carlisle Companies, Inc.; Carlisle Syntec, Inc. and Versico, LLC.
Counts I through IV were brought against the Carlisle Defendants. Counts V through VII were
brought against all Defendants, and Count VIII is brought only against ABC. The claims against
ABC in the Georgia case are for breach of express warranty, breach of implied warranty under
Georgia law, unjust enrichment, and breach of contract.
On April 17, 2017, Precision counterclaimed in this case, bringing counterclaim counts
against ABC for breach of express warranty, breach of implied warranties under Alabama and
Georgia law, unjust enrichment, and breach of the contract.
ABC moves to dismiss Precision’s counterclaims on the grounds of the first-filed rule,
standing under Alabama law, lack of privity of contract, and the Alabama statute of limitations.
At the outset, the court notes that in opposing the Motion to Dismiss, Precision has
clarified the scope of its claims in counterclaim counts I, II, and III. Precision states that those
counts “do not involve construction work performed on Plaintiff’s facility in Alabama.” (Doc.
#31 at p.1). Therefore, accepting Precision’s representation as to the scope of the claims pled in
counterclaim counts I, II, and III, the court turns to the grounds for dismissal as to all of the
A. First- Filed Rule as a Ground for Dismissal
ABC argues that this court should dismiss the counterclaim counts filed in this case under
a first-filed rule, because the case filed in Georgia state court was filed before the counterclaim
counts were filed in this court. Precision has responded that where concurrent cases are pending
in state and federal court, the appropriate analysis to apply is the Colorado River Waters
Conservation Dist. v. United States, 424 U.S. 800 (1976) abstention doctrine, not a first-filed
In supplemental briefing, ABC has cited the court to Merrill Lynch, Pierce, Fenner &
Smith, Inc. v. Haydu, 675 F.2d 1169, 1174 (11th Cir. 1982), to support application of a first-filed
rule when the cases are pending in state and federal court. As recognized by the Eleventh Circuit
in a case decided subsequent to Haydu, however, the Supreme Court has stated that “[g]enerally,
as between state and federal courts, the rule is that the pendency of an action in the state court is
no bar to proceedings concerning the same matter in the Federal court having jurisdiction.”
Ambrosia Coal & Const. Co. v. Pages Morales, 368 F.3d 1320, 1328 (11th Cir. 2004) (quoting
Colorado River Water Conservation District v. United States, 424 U.S. 800, 817 (1976)).
Following the Supreme Court, therefore, this court concludes that the pendency of a state court
action filed before the federal action does not necessarily bar a federal action, but is a factor in
application of Colorado River abstention analysis. See, e.g., Techjet Innovations Corp. v.
Benjelloun, 203 F. Supp. 3d 1219, 1230 (N.D. Ga. 2016) (examining Haydu, Ambrosia Coal, and
Colorado River and concluding that “the first-to-file bar does not apply to pending state and
B. Colorado River Abstention as a Ground for Dismissal
Abstention under the Colorado River analysis first requires a threshold determination that
the pending federal and state proceedings involve substantially the same parties and substantially
the same issues. Ambrosia Coal, 368 F.3d at 1330. All of the parties and claims do not have to be
the same in the two actions, as long as the cases are sufficiently similar. Id.
If the two cases involve substantially the same issues and parties, then a court must
consider six factors: (1) the order in which the courts assumed jurisdiction over property; (2) the
relative inconvenience of the fora; (3) the order in which jurisdiction was obtained and the
relative progress of the two actions; (4) the desire to avoid piecemeal litigation; (5) whether
federal law provides the rule of decision; and (6) whether the state court will adequately protect
the rights of all parties. TranSouth Fin. Corp. v. Bell, 149 F.3d 1292, 1294–95 (11th Cir. 1998).
Courts also are to consider whether the concurrent cases involve a federal statute that evinces a
policy favoring abstention. Ambrosia Coal, 368 F.3d at 1331. No one factor is determinative, and
the factors must be considered “flexibly and pragmatically.” Id.
A federal court considering abstention must weigh these factors with a heavy bias in
favor of exercising jurisdiction because federal courts have a “virtually unflagging obligation” to
exercise jurisdiction where it exists. TranSouth Fin. Corp., 149 F.3d at 1295. “[D]ismissal of an
action in deference to parallel state proceedings is an extraordinary step that should not be
undertaken absent a danger of a serious waste of judicial resources.” Jackson-Platts v. Gen. Elec.
Capital Corp., 727 F.3d 1127, 1140 (11th Cir. 2013).
In this case, Precision has brought four counterclaims which are virtually identical to four
of its claims pending in a Georgia state court case. Claims pending in both cases for breach of
express warranty, breach of implied warranties, and unjust enrichment arise from issues with
TPO roofing material supplied by ABC and installed by Precision. (Doc. #6, Doc. #32-1). Both
cases also include a breach of contract claim based on the installation of a roof at a Montgomery,
Upon review of the two pleadings--the counterclaim in this court and the Georgia
complaint--it appears that the counterclaims in this case are virtually identical to the
corresponding claims brought in Georgia, except that the implied warranty claim pending in
Georgia specifically invokes only Georgia law, while the implied warranty claim pending here
specifically invokes both Alabama and Georgia law. (Doc. #32-1 at p.10, Doc. #6 at p. 17). The
court concludes, therefore, that counterclaim counts in this case and the claims in the Georgia
case brought by Precision against ABC involve substantially the same parties and substantially
the same issues so that the Colorado River threshold issue is met, and the analytical factors must
be analyzed. See Ambrosia Coal, 368 F.3d at 1330.
The first Colorado River factor is neutral in this case because this is not an in rem action.
The second factor also appears to be neutral, as there has been no showing of a significant
difference in convenience in litigating in Georgia and Alabama. The remaining factors, however,
weigh in favor of abstention by this court.
The Georgia court obtained jurisdiction over the similar claims first. As noted earlier,
Precision filed a Complaint in Georgia state court in March and filed substantially similar claims
as counterclaims in this case in April, 2017. Therefore, while perhaps not strongly, this factor
weighs in favor of abstention. Cf. Forehand v. First Alabama Bank of Dothan, 727 F.2d 1033,
1035 (11th Cir. 1984) (stating “Linda filed her federal action before she was added as a party to
the bank's state court proceeding. Thus the order in which jurisdiction was obtained dictates
As to the second factor of the avoidance of piecemeal litigation, district courts have
reasoned that if the two cases are identical, this factor weighs in favor of abstention. See
Leaderstat, LLC v. Abisellan, No. 8:06-cv-1337-T-23TGW, 2007 WL 5433486, at *3 (M.D. Fla.
Jan. 24, 2007) (“Because the plaintiff seeks to force the defendant to defend two identical
lawsuits in two different forums at unnecessary inconvenience and expense, a distinct danger of
oppressively duplicative, piecemeal litigation exists. The third factor weighs strongly in favor of
The Eleventh Circuit has cautioned, however, that although dual proceedings will likely
result in some repetition of efforts and possibly some piece-by-piece decision-making, abstention
is not appropriate where there is no indication that piecemeal litigation poses an issue of any
“greater waste” than in the vast majority of federal cases with concurrent state counterparts.
Ambrosia Coal & Const. Co., 368 F.3d at 1333. Instead, the piecemeal litigation must be
“abnormally excessive or deleterious.” Id.
One circumstance in which that standard can be met is a case involving hundreds of
claims. See Colo. River, 424 U.S. at 820 (noting the danger of piecemeal litigation in a case
involving approximately 1,000 water uses); Romine v. Compuserve Corp., 160 F.3d 337, 341
(6th Cir.1998) (“Moreover, the specter of judicial duplication of effort looms particularly
ominously in the class action context, where the potential for inefficiency is acute.”).
In this case, there are claims pending in two courts alleged to involve “hundreds of
installed roofs” at “hundreds of locations” “throughout the southeastern United States.” (Doc. #6
at p.14, 15, Doc. #32-1 at p.5,6).
Two different courts applying legal principals of various states to the same claims arising
from warranties made as to TPO roofing material installed on hundreds of roofs in hundreds of
locations presents an issue of waste similar to that posed by claims against 1,000 water users as
in the Colorado River decision or in a class action. The number of roofs and the number of
geographic locations poses a risk of “greater waste” than “the vast majority federal cases with
concurrent state counterparts.” Ambrosia Coal, 368 F.3d at 1333. This factor, therefore, weighs
in favor of abstention.
As to the fourth factor, while Precision and ABC dispute whether Alabama law applies as
to some claims, “the question for dismissal purposes is not which state law applies, but rather
whether federal or state law applies.” Am. Bankers Ins. Co. of Florida v. First State Ins. Co., 891
F.2d 882, 886 (11th Cir. 1990). In this case, there is no federal question at issue. See TranSouth
Fin. Corp., 149 F.3d at 1295 (stating that “resolution of the underlying dispute being governed
by federal law is a factor that strongly suggests a federal court should exercise its jurisdiction.”).
Although the lack of a federal issue is not dispositive, American Bankers Ins. Co., 891 F.2d at
886, in this case, the court does not conclude that this factor is neutral, but instead weighs at least
slightly in favor of abstention because at least one counterclaim count is a claim expressly
brought under Georgia statutory law, and the same claims are pending in the Georgia case. Cf.
Jackson-Platts v. Gen. Elec. Capital Corp., 727 F.3d 1127, 1143 (11th Cir. 2013) (stating this
factor favors abstention only where the applicable state law is particularly complex or best left
for state courts to resolve).
As to the final Colorado River analytical factor, Precision’s counterclaims which
duplicate the claims already pending in Georgia can be resolved in the Georgia state court case.
See Moorer v. Demopolis Waterworks & Sewer Bd., 374 F.3d 994, 997 (11th Cir. 2004)
(affirming abstention and stating “Moorer had the ability to ensure diligent prosecution in the
Marengo County State court action and thus the district court had no basis to believe that
Moorer's rights would not be protected.”). This factor, therefore, also weighs in favor of
The Colorado River analysis weighs in favor of abstention as to counterclaim counts I, II,
and III which arise from hundreds of roof installations, but it appears to the court that the factors
should be separately examined with regard to count IV of Precision’s counterclaim, which does
not arise from hundreds of installations, but arises from the contract for installation of a single
roof at ABC’s Montgomery, Alabama facility.
Precision urges in this case that if this court abstains from exercising jurisdiction, it must
abstain exercising jurisdiction over the entire case. Precision cites no authority to support this
argument. ABC argues that it did not duplicate and lodge its claims as counterclaims in Georgia,
so it should be able to proceed here on its claims, which concern the installation that took place
in Alabama and fall under Alabama laws.
Justice Rehnquist, writing for the plurality of the Court, recognized in Will v. Calvert
Fire Ins. Co., 437 U.S. 655, 666 (1978) (per curiam), that there may be circumstances under
which abstention may be exercised over less than an entire case. In that case, Justice Rehnquist
explained that the court below had only stayed some of the claims after applying abstention
principles, and not a federal claim which could concurrently be resolved by both courts, and that
that claim had remained pending in federal court after the court abstained. Id. District courts
have conducted Colorado River analysis and stayed some claims and allowed others to proceed.
See Giles v. ICG, Inc., 789 F. Supp. 2d 706, 714 (S.D.W. Va. 2011) (finding that grant of a
partial stay under Colorado River will efficiently sever the issues to be determined by the federal
and state courts); In re Countrywide Fin. Corp. Derivative Litig., 542 F. Supp. 2d 1160, 1172
(C.D. Cal. 2008) (finding that “Colorado River and its progeny authorize this Court to stay only
the class action claims in this case in favor of the Delaware Court of Chancery, even though
other claims cannot be so stayed.”); Big O Tires, LLC v. Felix Bros., No. 10-CV-00362-PABKLM, 2011 WL 6181448, at *5 (D. Colo. Dec. 13, 2011) (bifurcating plaintiff's breach of
contract claims from the rest of the action and staying proceedings as to the contract claims
under Colorado River).
In this case, count IV of the counterclaim, involving Precision’s contract with ABC for
installation of a single roof, is also brought in the Georgia case, but unlike counterclaim counts I,
II, and III, it is in the nature of a compulsory, not permissive, counterclaim in this case. See Fed.
R. Civ. Pro. 13(a), (b). That is, ABC’s claims concern its contract for installation of a particular
roof and counterclaim count IV relates to that contract. While the danger of piecemeal litigation
is implicated by two separate proceedings involving the same hundreds of roofing claims in
hundreds of locations, the specific facility dispute in counterclaim count IV is distinct from those
claims. As to counterclaim count IV, therefore, the Colorado River factors weigh against
abstaining. Furthermore, it would be more efficient to proceed in this court on both ABC’s
claims and Precision’s compulsory counterclaim. Therefore, in this unique case where there is a
distinction between the types of claims brought, ie., claims arising from a single roof installation
and claims arising from hundreds of roof installations in multiple states, this court is persuaded
that it should abstain only from the claims concerning the hundreds of roof installations in
counterclaim counts I, II, and III. Accordingly, the Motion to Dismiss is due to be DENIED as to
counterclaim counts I, II, and III but the court will stay this case as to those claims. See Moorer,
374 F.3d at 998 (holding that a stay, not a dismissal, is the proper procedural mechanism for a
district court to employ when deferring to a parallel state-court proceeding under the Colorado
River doctrine). The court now turns to the grounds for dismissal as to counterclaim count IV.
C. Alabama Licensing Requirement as Ground for Dismissal
ABC argues that all of Precision’s counterclaims must be dismissed because unlicensed
contractors are barred from bringing lawsuits in Alabama to enforce contracts exceeding a
certain amount, or any claims derived from those contracts, citing Hawkins v. League, 398 So. 2d
232 (Ala. 1981).
Precision admits that it does not have an Alabama license, but argues specifically as to
counterclaim IV that the claim is not barred because the damages alleged by Precision arise from
a period of time after a licensed contractor, Hammer, Inc., became the general contractor.
Precision essentially argues that the licensing requirement does not bar its claim because it does
not apply to subcontractors. Precision cites no authority in support of this argument.
Under Alabama law, a contractor engaged in general contracting who violates Alabama
law by failing to obtain the necessary license, “cannot maintain a cause of action if, in order to
establish it, he must rely in whole or in part on an illegal or immoral act or transaction to which
he is a party.” White-Spunner Const., Inc. v. Constr. Completion Co., LLC, 103 So. 3d 781, 794
(Ala. 2012) (citations omitted). Alabama courts have made it clear that “courts will not be used
to assist ‘those who transgress the moral or criminal code.’” Id. This analysis was applied in
White-Spunner Const., Inc. to both general contractors and subcontractors, with the reasoning
that both are required to go through a licensing process. Id. In that case, a licensed general
contractor subcontracted with a licensed party who subcontracted with an unlicensed party. The
court reversed an award of damages to the subcontractor against the contractor on the basis that
the subcontractor’s contract with the unlicensed contractor was illegal due to the lack of a
license. Id. at 794-95.
Under Alabama law, Precision, as an admitted unlicensed subcontractor, cannot sue for
damages arising out of a contract for construction which without question meets the monetary
amount. The claim in counterclaim IV, therefore, is due to be dismissed.1
For the reasons discussed, the court finds that Colorado River abstention applies to
counterclaims I, II, and III, and that counterclaim four is due to be dismissed. Accordingly, it is
hereby ORDERED as follows:
1. The Motion to Dismiss (Doc. #25) is GRANTED as to counterclaim count IV.
2. The Motion to Dismiss (Doc. #25) is DENIED but this case is STAYED as to
counterclaim counts I, III, and IIII pending disposition of Precision Roofing and
Consulting, LLC v. American Builders & Contractors Supply. Co., Inc. et al., Case
No. 17-A0302202, pending the Superior Court of Gwinnett County, Georgia.
Done this 9th day of August, 2017.
/s/ W. Harold Albritton______________________
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE
It would appear that other claims arising from the contract work on Plaintiff’s facility in
Alabama, if they were pled in counterclaim counts I, II, and III potentially would similarly be
due to be dismissed. Cf. Architectural Graphics & Const. Servs., Inc. v. Pitman, 417 So. 2d 574,
576 (Ala. 1982) (in a suit on the note as opposed to a claim based on the contract, the court
explained that a suit to enforce the contract is foreclosed to an unlicensed contractor, so must be
a suit by the same unlicensed contractor to collect on a note secured by a mortgage given in
consideration of that contract). As noted, however, Precision has clarified in its brief that
counterclaim counts I, II, and III are not based on any contract work on Plaintiff’s facility in
Alabama. (Doc. #31 at p.1).
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