Waste Corporation of Arkansas LLC v. Wastesolutions LLC et al

Filing 18

ORDER granting in part and denying in part 12 defendants' Motion to Dismiss (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 5/10/2017. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
WASTE CORPORATION OF
ARKANSAS, LLC,
Plaintiff,
vs.
WASTESOLUTIONS LLC and
NORRIS GRAVES,
Defendants.

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Case No. CIV-17-14-M

ORDER
Before the Court is defendants’ Motion to Dismiss, filed March 7, 2017. On March 28,
2017, plaintiff filed its response, and on April 3, 2017, defendants filed their reply.
I.

Introduction1
In June 2016, defendant WasteSolutions LLC (“WasteSolutions”) entered into a contract

with the United States government, by which WasteSolutions agreed to perform or cause to be
performed certain waste and recycling services at Little Rock Air Force Base, located in Arkansas.2
The contract was awarded to WasteSolutions pursuant to Section 8(a) of the Small Business Act.
Upon being awarded the contract, WasteSolutions, through defendant Norris Graves (“Graves”),
sought out plaintiff to inquire whether it would be willing to continue to provide the same
subcontracting services to WasteSolutions that it provided to Street Legal, but for a limited term
of only a few months. WasteSolutions declined to enter into such a short term agreement but
offered to perform the same subcontracting services if WasteSolutions agreed to a three-year term

The facts set forth in this Introduction are based upon the facts alleged in plaintiff’s Complaint.
Prior to WasteSolutions being awarded the contract, a company called Street Legal Industries,
Inc. (“Street Legal”) provided the same services. Plaintiff previously served as subcontractor to
Street Legal in connection with these services.
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and identical payment provisions. WasteSolutions, through Graves, accepted plaintiff’s offer on
September 30, 2016.
WasteSolutions immediately began performance, but by mid-October, WasteSolutions
informed plaintiff that it was repudiating and intended to terminate their contract, based on
WasteSolutions’ belief that plaintiff’s performance under the contract would cause WasteSolutions
to fall out of compliance with applicable rules and regulations governing its contract with the
United States government. On or by November 15, 2016, WasteSolutions began placing its own
waste collection bins at the Little Rock Air Force Base and instructed plaintiff to cease
performance under the contract. WasteSolutions paid plaintiff for its services rendered under the
contract.
On January 5, 2017, plaintiff filed the instant action against defendants, alleging causes of
action for breach of contract, fraud, and quantum meruit/unjust enrichment. Defendants now move
this Court, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss the causes of action
alleged against them in the Complaint for failure to state a claim upon which relief may be granted.
II.

Standard for Dismissal
Regarding the standard for determining whether to dismiss a claim pursuant to Federal

Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted, the
United States Supreme Court has held:
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. A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct
alleged. The plausibility standard is not akin to a “probability
requirement,” but it asks for more than a sheer possibility that a
defendant has acted unlawfully. Where a complaint pleads facts that
are merely consistent with a defendant’s liability, it stops short of
the line between possibility and plausibility of entitlement to relief.
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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted). Further,
“where the well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged - but it has not shown - that the pleader is entitled to relief.”
Id. at 679 (internal quotations and citations omitted). Additionally, “[a] pleading that offers labels
and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does
a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement.” Id. at
678 (internal quotations and citations omitted). A court “must determine whether the complaint
sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief
under the legal theory proposed.” Lane v. Simon, 495 F.3d 1182, 1186 (10th Cir. 2007) (internal
quotations and citation omitted). Finally, “[a] court reviewing the sufficiency of a complaint
presumes all of plaintiff’s factual allegations are true and construes them in the light most favorable
to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir. 1991).
III.

Discussion
A.

Breach of contract

In Count I of its Complaint, plaintiff alleges that defendants breached their contract with
plaintiff by depriving or attempting to deprive plaintiff of the opportunity to continue to perform
under the contract for the remaining term thereof and/or by terminating or attempting to terminate
the contract prior to the expiration of its term. Defendants assert that the Complaint fails to state
a claim for breach of contract. Specifically, defendants contend: (1) the contract does not obligate
WasteSolutions to pay plaintiff for collection and disposal of the federal government’s waste at
the Little Rock Air Force Base; (2) the contract does not even call for any services to be provided
at the Little Rock Air Force Base; (3) plaintiff is nowhere identified in the contract; (4) based upon
the handwritten language “Government language to be added,” section 2 of the contract should be
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disregarded; (5) the contract is insufficiently definite to be enforced; (6) there was no foreseeability
requirement to the force majeure clause in the contract; and (7) given plaintiff’s refusal to agree to
terms that ensured compliance with federal law, Okla. Stat. tit. 15, § 104 excuses WasteSolutions’
performance and/or voids the contract ab initio.3
Under Oklahoma law, the elements of a breach of contract cause of action are: (1) the
formation of a contract; (2) breach of that contract; and (3) damages as a direct result of the breach.
See Dig. Design Grp., Inc. v. Info. Builders, Inc., 24 P.3d 834, 843 (Okla. 2001). Having carefully
reviewed plaintiff’s Complaint, and presuming all of plaintiff’s factual allegations are true and
construing them in the light most favorable to plaintiff, the Court finds that plaintiff has set forth
sufficient factual allegations to state a breach of contract claim. Specifically, the Court finds that
plaintiff has alleged sufficient facts showing the existence of a contract, a breach of that contract,
and damages to plaintiff as a direct result of the breach. Accordingly, the Court finds that
plaintiff’s breach of contract cause of action should not be dismissed.
B.

Fraud

In Count II of its Complaint, plaintiff alleges a claim for fraud. Defendants assert that
plaintiff’s Complaint fails to state a claim for fraud. Specifically, defendants contend that plaintiff
has not sufficiently alleged that defendants entered into the contract without any intent to perform
the contract, particularly in light of defendants’ performance of the contract. Plaintiff asserts that
in its Complaint, it expressly alleges that defendants made their misrepresentation regarding their
intent for plaintiff to provide services for a three-year period without the present intent to perform.

The Court would note that a number of defendants’ bases for dismissal are more appropriately
addressed through a motion for summary judgment or at trial. At the motion to dismiss stage of
the proceedings, this Court must determine whether plaintiff’s Complaint contains sufficient
factual matter, accepted as true, to state a breach of contract claim that is plausible on its face.
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Under Oklahoma law, the elements of fraud are: “1) a false material misrepresentation, 2)
made as a positive assertion which is either known to be false or is made recklessly without
knowledge of the truth, 3) with the intention that it be acted upon, and 4) which is relied on by the
other party to his (or her) own detriment.” See Bowman v. Presley, 212 P.3d 1210, 1218 (Okla.
2009). Having carefully reviewed plaintiff’s Complaint, and presuming all of plaintiff’s factual
allegations are true and construing them in the light most favorable to plaintiff, the Court finds that
plaintiff has set forth sufficient factual allegations to state a plausible claim for fraud. Specifically,
the Court finds that plaintiff has alleged sufficient facts showing that defendants represented to
plaintiff that they intended to retain plaintiff for a three-year period, that defendants knew at the
time they made such representation that they did not intend to perform for the three-year term, that
defendants intended for plaintiff to rely on their misrepresentation by performing services at the
Little Rock Air Force Base, and that plaintiff relied on the misrepresentation and was damaged
thereby. See Complaint at ¶¶ 28-33. Accordingly, the Court finds that plaintiff’s fraud cause of
action should not be dismissed.
C.

Quantum meruit/unjust enrichment

In Count III of its Complaint, plaintiff alleges a claim for quantum meruit/unjust
enrichment. Specifically, plaintiff alleges as follows:
36.
WCA provided services at the Base for Waste
Solutions’ benefit.
37.
WCA reasonably expected to be paid for those
services.
38.
Waste Solutions benefitted from those services.
39.
Under the circumstances, it would be unjust for
Waste Solutions to retain the benefit of those services without
payment.
Complaint at ¶¶ 36-39. However, in its Complaint, plaintiff also alleges that “Waste Solutions
paid WCA for its services rendered without question.” Complaint at ¶ 20. In light of plaintiff’s
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allegation that it was paid for its services, the Court finds that plaintiff has not sufficiently alleged
a claim for quantum meruit/unjust enrichment that is plausible on its face. Accordingly, the Court
finds that plaintiff’s quantum meruit/unjust enrichment cause of action should be dismissed.
IV.

Conclusion
For the reasons set forth above, the Court GRANTS IN PART and DENIES IN PART

defendants’ Motion to Dismiss [docket no. 12] as follows:
(A)

The Court GRANTS the motion to dismiss as to plaintiff’s quantum meruit/unjust
enrichment cause of action, and

(B)

The Court DENIES the motion to dismiss as to plaintiff’s breach of contract and
fraud causes of action.

IT IS SO ORDERED this 10th day of May, 2017.

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