Boardman Steel Fabricators, LTD v. Andritz, Inc.

Filing 14

MEMORANDUM OPINION & ORDER: the Defendants' motion to dismiss count two (R. 6 ) is DENIED. Signed by Judge Gregory F. VanTatenhove on 5/23/2014.(AKR)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
FRANKFORT

BOARDMAN STEEL
FABRICATORS, LTD.,
Plaintiff,
V.
ANDRITZ, INC.,
Defendant.

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Civil No. 14-2-GFVT

MEMORANDUM OPINION
&
ORDER

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The Motion to Dismiss before the Court raises a singular legal question. Under
Kentucky law, may a plaintiff allege breach of an express contract between the parties and, in
the alternative, seek relief in quantum meruit? The answer to this question is “yes.”
I
Boardman Steel Fabricators is a company that engineers, fabricates and delivers steel.
[R. 9 at 1.] On July 3, Boardman and Andritz entered into a contract whereby Broadman
agreed to design, engineer, fabricate and supply steel for an annealing and pickling1 line at the
North American Stainless (NAS) plant in Ghent, Kentucky. [R. 6-1 at 1.] Boardman alleges
that Andritz has breached the agreement and now seeks relief pursuant to two legal theories:
breach of contract and, in the alternative, unjust enrichment or quantum meruit.2 [R. 1.]

1

Annealing is a process whereby steel is heated and then cooled. By definition, anneal means “to heat and
then cool usu[ally] for softening and rendering less brittle.” Webster’s Third New International Dictionary
87 (2002)). Pickling is a means of dipping annealed steel in acid to clean the steel of various impurities
that develop during the annealing process. According to the dictionary, pickle, in the context of Steel, is a
process whereby “a bath of dilute sulfuric or nitric acid [is] used to cleanse or brighten the surface of
castings or other articles of metal.” Webster’s Third New International Dictionary 87 (2002)).
2
Boardman pleads “Unjust Enrichment/Quantum Meruit” in Count Two of its complaint [R. 1] and the

II
Andritz argues that “[t]he doctrine of unjust enrichment has no application in a
situation where there is an explicit contract which has been performed.” Codell Const. Co. v.
Com., 566 S.W.2d 161, 165 (Ky. Ct. App. 1977); see also Guarantee Elec. Co. v. Big Rivers
Elec. Corp., 669 F. Supp. 1371 at FN 9 (W.D. Ky. 1987). Because Boardman admits the
existence of an express contract in its Complaint, Andritz contends that the quantum meruit
claim must be dismissed. [R. 6-1 at 4-5.]
Broadman acknowledges that it may not recover both in contract and quantum meruit
but contends that it is permitted to plead both as long as the quantum meruit claim is pled in
the alternative. [R. 9 at 4.] In support of this proposition, Broadman looks both to the Federal
Rules of Civil Procedure and to applicable case law. Rule 8(d)(2) provides that:
A party may set out 2 or more statements of a claim or defense alternatively or
hypothetically, either in a single count or defense or in separate ones. If a party makes
alternative statements, the pleading is sufficient if any one of them is sufficient.
Fed. R. Civ. P. 8(d)(2). The rule then goes a step further, providing that “a party may state as
many separate claims or defenses as it has, regardless of consistency.” Fed. R. Civ. P. 8(d)(3)
(emphasis added). Broadman also depends on W. Kentucky Coca-Cola Bottling Co., Inc. v.
Red Bull N. Am., Inc., 2008 WL 2548095 (W.D. Ky. June 20, 2008), where the defendant,
Red Bull, similarly argued that Coca-Cola could not “maintain an unjust enrichment claim
when it has alleged the existence of an explicit contract.” Id. The Court permitted Coca-Cola

parties use the terms interchangeably in their briefing. The Court notes that while these two concepts are
often conflated and very similar, under Kentucky law they are independent theories of recovery. See
MidAmerican Distribution, Inc. v. Clarification Tech., Inc., 807 F. Supp. 2d 646, 680 (E.D. Ky. 2011) aff'd,
485 F. App'x 779 (6th Cir. 2012); see also Realty Unlimited, Inc. v. Ball Homes, 2009 WL 50179 (Ky. Ct.
App. Jan. 9, 2009). For purposes of clarity in this Order, the Court will uniformly refer to the relief sought
in Count two as a claim in quantum meruit.

2

to plead both theories, noting that they were pled in the alternative and that the Federal Rules
of Civil Procedure allow for this. Id.
The Sixth Circuit addressed this exact issue even more directly in the unpublished
decision of Son v. Coal Equity, Inc., 122 F. App'x 797, 801 (6th Cir. 2004). In that case the
Plaintiff pled both an express breach of contract claim and a claim in quantum meruit. After
finding that “an express contract for payment existed,” and that “an essential element of
a quantum meruit claim is the absence of such an agreement,” the District Court dismissed the
claim. Son, 122 F. App'x at 801 (emphasis in original). The Sixth Circuit reversed, holding
that the Plaintiff was entitled to plead quantum meruit as an alternative theory of recovery and
that dismissal of the claim was premature.
The course of litigation [ ] is never certain, and there is no guarantee that [the
Defendant] might not attempt on remand to repudiate the concession contained in its
appellate brief. Moreover, the Federal Rules of Civil Procedure permit pleading in the
alternative and even the pleading of inconsistent claims. Fed.R.Civ.P. 8(e)(2). In light
of these considerations, we believe that the quantum meruit claim should remain as an
alternative theory available to the plaintiff, at least until the contract claim is
concluded.
To hold otherwise might prove to be premature and would fail to adequately protect
the rights reserved by [the Plaintiff]. We note, however, that [the Plaintiff’s] quantum
meruit claim is only an alternative theory of recovery permitted by the Federal Rules
of Civil Procedure. [The Plaintiff], of course, may not recover twice for the same
violation. See EEOC v. Waffle House, Inc., 534 U.S. 279, 297, 122 S.Ct. 754, 151
L.Ed.2d 755 (2002) (It “goes without saying that courts can and should preclude
double recovery.”).
Son, 122 F. App'x at 802; see also Netherlands Ins. Co. v. Lexington Ins. Co., 2013 WL
2120817 (W.D. Ky. May 15, 2013) (Recognizing that, despite Plaintiff’s admission that a
contract existed, the quantum meruit claim could not be dismissed on this basis because it had
pled “its quantum meruit theory in the alternative, meaning that if there was no express
contract between the parties, the theory applies.”)

3

The Court recognizes that there is not a dispute in this case about whether an explicit
contract exists. As Andritz points out, the fabrication contract is attached to Boardman’s
Complaint. [R. 1-3.] Boardman does, however, raise the possibility that a trier of fact could
find that not all the work was completed pursuant to the contract. [R. 9.] In this
circumstance, recovery in quantum meruit might be appropriate as an alternative means of
relief. As is recognized in Son v. Coal Equity, Inc., the course of litigation is unpredictable
and the Rules of Civil Procedure permit the pleading of alternative and inconsistent claims.
See Son., 122 F. App'x at 802. For this reason, “the quantum meruit claim should remain as
an alternative theory available to the plaintiff, at least until the contract claim is concluded.”
Son, 122 F. App'x at 802. Finally, the Court reiterates Broadman’s earlier concession [see R.
9 at 4] that it cannot recover damages under both theories of recovery. See Id. (citing EEOC
v. Waffle House, Inc., 534 U.S. 279, 297, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) (It “goes
without saying that courts can and should preclude double recovery.”))
III
Accordingly, having considered the record, applicable law and the arguments of the
parties, the Court hereby ORDERS the Defendants’ motion to dismiss count two [R. 6] is
DENIED.

This 23rd day of May, 2014.

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