FMW/MJH At 2604 Hillsborough LLC v. WSA Construction, LLC et al
ORDER denying 24 Motion to Dismiss for Failure to State a Claim; denying 65 Motion to Dismiss Quantum Meruit; denying 121 Motion to Dismiss Renewed Motion to Dismiss Quantum Meruit. Signed by Senior Judge Graham Mullen on 08/08/2014. (Pro se litigant served by US Mail.)(jlk)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
DOCKET NO. 3:13-CV-703-GCM
FMW/MJH AT 2604 HILLSBOROUGH
WSA CONSTRUCTION, LLC; AGUILAR
EXTERMINATING CO., INC.; ALL
SEASONS CLEANING SERVICE, INC.;
AMERICAN CONCRETE PUMPING,
INC.; ASSOCIATED FIRE PROTECTION,
INC.; BARKDALE CONSTRUCTION,
INC.; BOYCO CORP. LLC; C.K. SUPPLY;
CAPITAL SIGN SOLUTIONS, LLC;
CAPITOL RECYCLING, LLC; CECIL
HOLCOMB RENOVATIONS, INC.;
ENGLER, MEIER & JUSTUS, INC. D/B/A
CIRCLE SUPPLY OF RALEIGH;
CUSTOM BRICK COMPANY, INC.;
CABINETRY, INC.; E T SALES, INC.
D/B/A CAROLINA COUNTERS; EAGLE
MAILBOX SALES, INC.; ELITE
FLOORING & DESIGN, INC.; FATHER
AND SON PAINTING CUSTOM
PAINTING; FRANCO MASONRY
CONCRETE, INC.; GERDAU
AMERISTEEL US INC.; GREENWAY
WASTE SOLUTIONS OF APEX, LLC;
HARRIS VENTURES, INC. D/B/A STAFF
ZONE; JRF MECHANICAL, INC.; M
AND M CONSTRUCTION COMPANY,
INC.; MARTIN’S BRICKLAYING; MAZZ
WELDING & FABRICATION, INC.; M R
ON TIME CONSTRUCTION, INC.;
NATIONAL CONSTRUCTION RENTALS,
INC.; NEWCOMB LAND SURVEYORS,
PLLC; ORLANDO CABALLERO D/B/A
OC DRYWALL & STUCCO; PAINTING
& DRYWALL BY VILLANUEVA, INC.;
PINNACLE FIRE SYSTEMS, INC.;
PROBUILD COMPANY LLC; RALEIGH
WATERPROOFING, INC.; R.L.
BRADSHER CONTRACTING, INC.;
CORPORATION; S.T. WOOTEN
CORPORATION; SUNBELT RENTALS,
INC.; SUPERIOR WATERPROOFING,
INC.; TALBERT BUILDING SUPPLY,
INC.; TRIANGLE CONSTRUCTION
SERVICES, INC.; TRIANGLE NORTH
EXTERIORS, INC.; WHITE CAP
CONSTRUCTION SUPPLY, INC.;
WILDER’S INC.; ZOCAM PLUMBING,
THIS MATTER is before the Court upon Plaintiff’s Renewed1 Motion to Dismiss
Quantum Meruit/ Unjust Enrichment Counterclaims of Defendants Pinnacle Fire Systems, Inc.,
JRF Mechanical, Inc., Sunbelt Rentals, Inc., Raleigh Waterpoofing, Inc., Talbert Building
Supply, Inc., and Orlando Caballero D/B/A OC Drywall & Stucco (“Counterclaiming
All Counterclaiming Subcontractors have filed responses in opposition to
Plaintiff’s motion except for Defendant JRF Mechanical, Inc. Plaintiff has replied and this
matter is now ripe for disposition.
For the reasons set forth below, Plaintiff’s Motion to Dismiss is DENIED.
Plaintiff (“FMW/MJH”) owns a student housing development located at 2604
Hillsborough Street in Raleigh, North Carolina (“the Premises”). (Compl. at 6). On October 19,
2012, FMW/MJH entered into a construction contract with general contractor WSA
Construction, LLC (“WSA”), under which WSA agreed to furnish the labor and materials
necessary to complete the development (“the Project). (Id.). The contract required that WSA turn
over a substantially completed Project to FMW/MJH on or before June 28, 2013. (Compl. at 8).
WSA independently engaged multiple subcontractors and suppliers to provide labor and
materials for the Project, including the Counterclaiming Subcontractors. WSA entered into
contracts with the Counterclaiming Subcontractors under which the Counterclaiming
Plaintiff had previously moved to dismiss the quantum meruit counterclaims of the listed Counterclaiming
Subcontractors, but subsequently filed a First Amended Complaint adding an additional party. (Doc. No. 89).
Several of the existing Defendants then filed additional Answers to the First Amended Complaint restating their
counterclaims. To avoid confusion, Plaintiff renewed its previously filed Motion to Dismiss against the listed
Counterclaiming Subcontractors. Defendants E T Sales, Inc. d/b/a Carolina Counters and Elite Flooring & Design,
Inc. have voluntarily removed their counterclaims for quantum meruit against the Plaintiff in their answers to the
First Amended Complaint and therefore Plaintiff’s motions as to those two Defendants are now moot.
Subcontractors agreed to provide labor, materials, equipment, or transportation necessary for
WSA to complete the Project.
The Project was not substantially completed by June 28, 2013. In its Complaint,
FMW/MJH alleges it has disbursed to WSA a total of $1,576,130.79 of the agreed upon contract
sum of $1,832,556.55. (Compl. at 7). FMW/MJH alleges that as a result of liquidated damages,
outstanding warranty claims, and FMW/MJH’s costs incurred to remedy and complete the
Project, FMW/MJH owes no additional portion of the contract sum to WSA. (Id.). In October,
2013, FMW/MJH began receiving lien documents and other forms of notice from subcontractors
requesting payment from FMW/MJH of amounts allegedly unpaid by WSA. (Id. at 8–9). The
subcontractors have asserted competing claims to the remaining balance of the contract sum, and
the total amount of these claims substantially exceeds the remaining balance. (Id. at 9).
WSA has no intention or capability of performing any further obligations to FMW/MJH
under the contract. (Id. at 9). On December 23, 2013, FMW/MJH filed a Complaint in
Interpleader (Doc. No. 1) pursuant to 28 U.S.C. § 1335, in order to resolve the multiple
competing claims against FMW/MJH, its funds, and the Premises in a single proceeding. (Doc.
No. 133 at 4). FMW/MJH named as defendants all known subcontractors engaged by WSA on
the Project. (Id.). In this action, FMW/MJH has sought, among other relief, a declaration that the
lien claims filed by the subcontractors against FMW/MJH are improper and that FMW/MJH is
not required to pay the subcontractors for services at the Premises.
The Counterclaiming Subcontractors allege they have completed their contractual
obligations but have not been paid in full for their work. The Counterclaiming Subcontractors
have filed counterclaims against FMW/MJH for, inter alia, quantum meruit/unjust enrichment
and lien claims against the Premises and funds. FMW/MJH filed the present 12(b)(6) motion to
dismiss the quantum meruit/unjust enrichment counterclaims. (Doc. No. 121).
STANDARD OF REVIEW
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.
662, 663 (2009). A complaint, therefore, must allege each necessary element of the claim. Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 562 (2007). When faced with a Rule 12(b)(6) motion
to dismiss, courts are instructed to “accept as true all well-pleaded allegations and . . . view the
complaint in a light most favorable to the plaintiff.” Mylan Labs, Inc. v. Matkari, 7 F.3d 1130,
1134 (4th Cir. 1993). After “assum[ing] the veracity” of these factual allegations, the court is to
“determine whether they plausibly give rise to an entitlement to relief.” Ashcroft, 556 U.S. at
678. Thus, a “complaint may proceed even if it strikes a savvy judge that actual proof of [the
facts alleged] is improbable, and ‘that a recovery is very remote and unlikely.’” Twombly, 550
U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). However, the court “need
not accept as true unwarranted inferences, unreasonable conclusions, or arguments.” Eastern
Shore Mkts., Inc. v. J.D. Assocs. LLP, 213 F.3d 175, 180 (4th Cir. 2000).
“Quantum meruit serves as an equitable remedy to prevent unjust enrichment when there
is no express contract.” Neighbors Law Firm, P.C. v. Highland Capital Mgmt., L.P., 5:09-CV352-F, 2010 WL 3767126, at *4 (E.D.N.C. Sept. 24, 2010) (citing Whitfield v. Gilchrist, 348
N.C. 39, 42 (1998)). When there is an actual agreement between the parties, quantum meruit is
not an appropriate remedy “because ‘an express contract precludes an implied contract with
reference to the same matter,’” Ron Medlin Constr. v. Harris, 364 N.C. 577, 580 (2010).
However, plaintiffs may seek alternative forms of relief. Fed.R.Civ.P. 8(d); Eastway Wrecker
Serv., Inc. v. City of Charlotte, 599 S.E.2d 410, 412 (N.C. Ct. App. 2004). Accordingly, “a party
may plead breach of contract and unjust enrichment in the alternative.” Silicon Knights, Inc. v.
Epic Games, Inc., No. 5:07–CV–275–D, 2011 WL 1134453, at *16 (E.D.N.C. Jan. 25, 2011)
(citing Performance Sales & Mktg., LLC v. Lowe's Cos., Inc., No. 5:07–CV–140, 2010 WL
2294323, at *5 (W.D.N.C. June 4, 2010).
Although a quantum meruit claim can only prevail “in the absence of an enforceable,
express contract,” TSC Research, LLC v. Bayer Chemicals Corp., 552 F. Supp. 2d 534, 540
(M.D.N.C. 2008), dismissal is improper when the existence of such a contract has not been
proven by evidence before the court, see Eastway Wrecker, 599 S.E.2d at 412 (“[I]t was error for
the trial court to dismiss plaintiff's alternative claim for recovery in quantum meruit on the
ground that it was precluded by an [alleged] express contract between the parties”); Performance
Sales, 2010 WL 2294323, at *5 (W.D.N.C. June 4, 2010) (denying motion to dismiss quantum
meruit claim because the existence of an express contract had not yet been established by
evidence before the court).
FMW/MJH contends that because contracts exist between the Counterclaiming
Subcontractors and WSA regarding the work the Counterclaiming Subcontractors performed on
the Project, the quantum meruit counterclaims should be dismissed. (Doc. No. 66 at 12). While it
is true that an express contract precludes recovery in quantum meruit, the existence of valid
contracts has not been proven by evidence before the Court at this stage in the proceedings.
Therefore, the Counterclaiming Subcontractors may plead quantum meruit until the existence of
express contracts has been conclusively established at a later stage of this litigation.
IT IS THEREFORE ORDERED that Plaintiff’s Motion to Dismiss the quantum meruit
counterclaims of Pinnacle Fire Systems, Inc., JRF Mechanical, Inc., Sunbelt Rentals, Inc.,
Raleigh Waterpoofing, Inc., Talbert Building Supply, Inc., and Orlando Caballero D/B/A OC
Drywall & Stucco (Doc. Nos. 24, 65 & 121) is DENIED at this time.
Signed: August 8, 2014
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