Boyd and Company, LLC v. Tom's Backhoe Service, Inc. et al

Filing 91

ORDER ADOPTING REPORT AND RECOMMENDATION (Written Opinion). Signed by Judge Wilhelmina M. Wright on 02/07/2018. (TJB)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Boyd and Company, LLC,

Case No. 17-cv-0178 (WMW/LIB)
Plaintiff,
ORDER ADOPTING REPORT AND
RECOMMENDATION

v.
Tom’s Backhoe Service, Inc., et al.
Defendants.

This matter is before the Court on the November 30, 2017 Report and
Recommendation (R&R) of United States Magistrate Judge Leo I. Brisbois. (Dkt. 56.)
The R&R recommends denying Defendant Prairie Winds Services, LLC’s motion to
dismiss Defendant Tom’s Backhoe Service, Inc.’s cross-claim for breach of contract and
granting the motion to dismiss Tom’s Backhoe’s cross-claim for negligence. 1 Both
defendants filed timely objections to the R&R.2 For the reasons addressed below, the
Court overrules the objections and adopts the R&R.

1

For this motion, Prairie Winds is a cross-defendant seeking to dismiss
cross-claims asserted by Tom’s Backhoe.
2

Because Prairie Winds electronically filed its objections to the R&R on
December 12, 2017, Tom’s Backhoe’s December 29, 2017 response to Prairie Winds’s
objections is untimely and will not be considered. See LR 72.2(b)(2) (providing that a
party may respond to another party’s objection within 14 days after service).

BACKGROUND3
In February 2016, Tom’s Backhoe entered into a contract with the City of
Brainerd, Minnesota, to install underground piping for utility services. Tom’s Backhoe
subsequently subcontracted with Prairie Winds to perform directional drilling on the
project. Because Prairie Winds threatened to abandon its work when Tom’s Backhoe
questioned whether Prairie Winds possessed the equipment and personnel to complete the
directional drilling, Tom’s Backhoe permitted Prairie Winds to subcontract with Plaintiff
Boyd and Company, LLC.

Tom’s Backhoe alleges that “there were substantial

problems” with the directional drilling work that Prairie Winds and Boyd negligently
performed. In October 2016, Boyd served a written demand for payment on Defendant
Travelers Casualty and Surety Company of America, which had issued the payment bond
on the project. Travelers denied Boyd’s claim, and Boyd subsequently initiated this
lawsuit seeking payment. Tom’s Backhoe asserted cross-claims against Prairie Winds for
breach of contract and negligence, which Prairie Winds moves to dismiss. See Fed. R.
Civ. P. 12(b)(6).
ANALYSIS
To defeat a Rule 12(b)(6) motion to dismiss, a claimant must allege sufficient facts
that, when accepted as true, state a facially plausible claim for relief. Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). The factual allegations need not be detailed, but they must
“raise a right to relief above the speculative level” in order to “state a claim to relief that
is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007).
3

Additional relevant factual and procedural background is addressed in detail in the
R&R and need not be repeated at length.
2

When determining whether a complaint states a claim for relief that is plausible on its
face, a district court accepts as true all factual allegations in the complaint and draws all
reasonable inferences in the plaintiff’s favor. Blankenship v. USA Truck, Inc., 601 F.3d
852, 853 (8th Cir. 2010).
For different reasons, both Prairie Winds and Tom’s Backhoe object to the
recommendation of the R&R to grant in part and deny in part Prairie Winds’s motion to
dismiss. Prairie Winds objects to the recommendation to deny its motion to dismiss
Tom’s Backhoe’s cross-claim for breach of contract, arguing that the magistrate judge
erred by declining to consider documents attached to Prairie Winds’s motion to dismiss.
Tom’s Backhoe objects to the recommendation to dismiss its negligence claim,
contending that Tom’s Backhoe alleges negligence by Prairie Winds that exceeds a
failure to perform contractual duties. The Court reviews these objections de novo and
addresses each in turn.

See 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(3);

LR 72.2(b)(3); Grinder v. Gammon, 73 F.3d 793, 795 (8th Cir. 1996) (per curiam).
I.

Prairie Winds’s Objections

Prairie Winds objects to the recommendation to deny its motion to dismiss Tom’s
Backhoe’s cross-claim for breach of contract.

Prairie Winds maintains that the

magistrate judge erred by failing to consider the documents attached to Prairie Winds’s
motion to dismiss. When these documents—purportedly the contracts governing the
relationship between Tom’s Backhoe and Prairie Winds—are considered, Prairie Winds
contends, it is evident that Tom’s Backhoe’s cross-claim for breach of contract fails to
allege the satisfaction of conditions precedent to Prairie Winds’s contractual obligation of

3

performance. Prairie Winds asserts that this deficiency warrants dismissal of Tom’s
Backhoe’s cross-claim for breach of contract.
Although matters outside the pleadings generally may not be considered when
deciding a motion to dismiss, a district court may consider documents necessarily
embraced by the pleadings. Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th
Cir. 2012). Materials are necessarily embraced by the pleadings when a complaint
alleges the contents of the materials and no party questions their authenticity. Zean v.
Fairview Health Servs., 858 F.3d 520, 526 (8th Cir. 2017). The contract on which a
breach-of-contract claim rests ordinarily is embraced by the pleadings. See Gorog v. Best
Buy Co., Inc., 760 F.3d 787, 791 (8th Cir. 2014).
The R&R determines that the documents Prairie Winds attaches to its motion to
dismiss are not necessarily embraced by the pleadings because Tom’s Backhoe
challenges the authenticity of the attached documents. Prairie Winds objects to this
determination, arguing that Tom’s Backhoe waived its authenticity challenge by failing to
raise it until the hearing on the motion. For this reason, it was procedurally unfair for the
magistrate judge to consider the authenticity challenge, Prairie Winds contends.
Prairie Winds’s argument mischaracterizes the record. In its brief opposing Prairie
Winds’s motion to dismiss, Tom’s Backhoe maintains that the reason the Court “must not
consider the . . . alleged subcontracts” is because the documents are not the contracts
governing the relationship between the parties. This is the same argument that Tom’s
Backhoe advanced during the hearing before the magistrate judge.

Because Tom’s

Backhoe challenges the authenticity of the documents attached to Prairie Winds’s motion

4

to dismiss, the R&R correctly determines that the attached documents are not necessarily
embraced by the pleadings. Prairie Winds’s objections are overruled.
II.

Tom’s Backhoe’s Objections

Tom’s Backhoe objects to the recommendation to dismiss its negligence
cross-claim against Prairie Winds for failure to allege that Prairie Winds breached a duty
of care that is distinct from its duty to perform its contractual obligations.

Tom’s

Backhoe argues that its negligence claim survives for two reasons. First, Tom’s Backhoe
contends that it alleges damages that arise from a breach of a duty of care that is beyond
the scope of Prairie Winds’s contractual obligations.

Second, according to Tom’s

Backhoe, the magistrate judge erred by ignoring the legal authority Tom’s Backhoe cited
that supports the claim’s survival.
Under Minnesota law, a plaintiff asserting a negligence claim must establish the
existence of a duty of care, a breach of that duty, and an injury proximately caused by the
breach. Doe 169 v. Brandon, 845 N.W.2d 174, 177 (Minn. 2014). Negligent breach of a
contractual duty is not a claim that exists under Minnesota law. Glorvigen v. Cirrus
Design Corp., 816 N.W.2d 572, 584 (Minn. 2012) (“When a contract provides the only
source of duties between the parties, Minnesota law does not permit the breach of those
duties to support a cause of action in negligence.” (internal quotation marks omitted)).
Here, Tom’s Backhoe alleges a contractual relationship with Prairie Winds in which
Prairie Winds agreed to perform certain drilling operations. In support of its negligence
cross-claim, Tom’s Backhoe alleges that Prairie Winds caused extensive damage by
negligently performing the drilling that it was contractually obligated to complete. But

5

simply alleging damages that exceed the scope of Prairie Winds’s drilling operations does
not establish a legally cognizable duty of care that is separate and distinct from Prairie
Winds’s contractual obligations.
The legal authority that Tom’s Backhoe cites in support of its objection does not
cure the substantive defect in its pleadings. Tom’s Backhoe primarily relies on Pacific
Fire Insurance Co. v. Kenny Boiler & Manufacturing Co., which recognized that a
contractee may hold a general contractor liable for the negligence of its subcontractor.
277 N.W. 226, 228 (Minn. 1937). But the circumstance here is distinguishable. Tom’s
Backhoe is not a contractee suing a general contractor for a subcontractor’s alleged
negligence. Instead, Tom’s Backhoe is suing its own subcontractor for negligence.
Tom’s Backhoe neither cites, nor has this Court’s research located, any case law that
permits a general contractor to sue its subcontractor for negligent performance of the
subcontractor’s contractual duties.4
For these reasons, Tom’s Backhoe’s objections to the R&R are overruled, and its
cross-claim for negligence is dismissed for failure to state a plausible claim for relief.
See Fed. R. Civ. P. 12(b)(6).

4

Tom’s Backhoe’s reliance on Waldor Pump & Equipment v. Orr-SchelenMayeron & Associates, Inc., 386 N.W.2d 375 (Minn. Ct. App. 1986), is equally
unavailing. In Waldor, the Minnesota Court of Appeals held that an engineer providing
“professional services” may be held to a duty of care independent from its contractual
obligations to support a negligence claim. 386 N.W.2d at 377. But contractors like
Prairie Winds are excluded under Minnesota law from the category of professionals held
to such an independent duty for providing their services. See, e.g., City of Mounds View
v. Walijarvi, 263 N.W.2d 420, 423-24 (Minn. 1978) (distinguishing professional services
performed by an architect from those performed by a contractor when holding architect to
an independent duty of care).
6

Finally, this Court reviews those portions of the R&R to which no objections have
been made for clear error. See Fed. R. Civ. P. 72(b) 1983 advisory committee note;
Grinder, 73 F.3d at 795. Having reviewed those portions of the R&R to which no party
objects, the Court concludes that the R&R is neither clearly erroneous nor contrary to law.
ORDER
Based on the foregoing analysis, the November 30, 2017 Report and
Recommendation, and all the files, records and proceedings herein, IT IS HEREBY
ORDERED:
1.

Defendant Prairie Winds Services, LLC’s objections to the Report and

Recommendation, (Dkt. 59), are OVERRULED;
2.

Defendant Tom’s Backhoe Service, Inc.’s objections to the Report and

Recommendation, (Dkt. 60), are OVERRULED;
3.

The November 30, 2017 Report and Recommendation, (Dkt. 56), is

ADOPTED; and
4.

Defendant Prairie Winds Services, LLC’s motion to dismiss the

cross-claims of Defendant Tom’s Backhoe Service, Inc., (Dkt. 36), is GRANTED as to
the cross-claim for negligence and DENIED as to the cross-claim for breach of contract.

Dated: February 7, 2018

s/Wilhelmina M. Wright
Wilhelmina M. Wright
United States District Judge

7