WALSH/GRANITE JV v. HDR ENGINEERING, INC.

Filing 75

MEMORANDUM ORDER indicating that, for reasons more fully stated within, that Walsh/Granites motion for partial dismissal 28 is denied, without prejudice, to Walsh/Granite renewing such arguments at the appropriate time in these proceedings; that H DR shall file its consolidated complaint on the docket in the lead case, 17-558, forthwith; and that, in accordance with Rule 12(a)(4), Walsh/Granite shall file an answer to the consolidated complaint on or before 11/27/17, given the Court holiday in that time period. Signed by Judge Nora Barry Fischer on 11/7/17. (jg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
WALSH/GRANITE JV,
Plaintiff,
v.
HDR ENGINEERING, INC.,
Defendant.
_________________________________
HDR ENGINEERING, INC.,
Plaintiff,
v.
WALSH/GRANITE JV, et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

2:17-cv-558
District Judge Nora Barry Fischer

MEMORANDUM ORDER
This is a dispute between two sophisticated entities relating to their respective roles in the
Pennsylvania Department of Transportation’s public-private partnership project to replace more
than 550 bridges across the Commonwealth of Pennsylvania over the next several years. Each
entity separately filed suit against the other in this Court, and shortly thereafter, both actions were
consolidated into this single action.1 Pending before the Court is a motion for partial dismissal
filed by Walsh/Granite, Joint Venture, et al. (“Walsh/Granite”), (Docket No. [28]), which seeks to
dismiss Counts II, III, IV, and VI of HDR Engineering, Inc.’s (“HDR”) consolidated complaint.
See 2:17-cv-782 (Docket No. 1). The Court heard extensive argument from the parties relative to

1

The first action, the lead case, was initiated on April 30, 2017 at Civil Number 17-558. The second
action, the member case, was initiated on June 13, 2017 at Civil Number 17-782. The two actions were
consolidated on June 23, 2017.

1

this motion, both at the September 29, 2017 case management conference and the October 12,
2017 oral argument, (Docket Nos. 60, 64), and the motion is fully briefed. (Docket Nos. 33, 37,
53). After careful consideration of the parties’ written submissions and oral arguments; the
allegations contained in HDR’s consolidated complaint; the applicable standards governing
motions to dismiss, see, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009); Connelly v. Lane Const. Corp., 809 F.3d 780, 790 (3d Cir. 2016); and
for the reasons that follow, Walsh/Granite’s motion is denied, without prejudice, to their arguments
being renewed at the appropriate times in these proceedings.
Walsh/Granite first argues that HDR’s claims for fraudulent and negligent
misrepresentation at counts III and IV of the consolidated complaint should be dismissed because
HDR fails to allege facts regarding the element of justifiable reliance. See Tran v. Metropolitan
Life Ins. Co., 408 F.3d 130, 136 & n. 8 (3d Cir. 2005) (“Justifiable reliance on an alleged
misrepresentation is an element of both fraudulent and negligent causes of action in
Pennsylvania.”). In the consolidated complaint, HDR alleges that during the performance of the
project, Walsh/Granite lodged two claims against HDR (a delay claim and an excess quantities
claim), causing it to suffer a significant amount of damages. HDR did not actually believe that
Walsh/Granite’s claimed damages were accurate, but given the complexity of the relevant
calculations, HDR alleges it was forced to conduct a comprehensive year-long investigation to
verify Walsh/Granite’s representations. The investigation, which cost HDR approximately $1.7
million, allegedly revealed that Walsh/Granite’s representations were overstated by tens-ofmillions of dollars.
Because HDR conducted an investigation into Walsh/Granite’s purportedly inflated
damages claims, Walsh/Granite contends that justifiable reliance cannot be established as a matter

2

of law. But, “justifiable reliance is typically a question of fact for the fact-finder to decide, and
requires a consideration of the parties, their relationship, and the circumstances surrounding their
transaction.” Toy v. Metro Life Ins. Co., 928 A.2d 186, 208 (Pa. 2007). Walsh/Granite cites no
authority in support of its assertion that HDR’s decision to conduct an investigation under these
circumstances is a per se bar to a finding of justifiable reliance, particularly at the pleading stage.
To the contrary, in this Court’s estimation, the consolidated complaint’s allegations, taken as true,
sufficiently plead the element of justifiable reliance, and Walsh/Granite’s arguments here are better
left to be assessed on a more fully developed factual record.
Similarly, at this stage of the proceedings, the Court declines to hold that the gist of the
action doctrine bars HDR’s claims for fraudulent and negligent misrepresentation. In light of the
complex nature of the parties’ dispute herein, in this Court’s opinion it is premature for the Court
to make a finding as a matter of law as to “whether the nature of the duty upon which the breach
of contract claims rest is the same as that which forms the basis for the tort claims.” Norfolk S.
Ry. Co. v. Pittsburgh & W. Va. R.R., 870 F.3d 244, 357 (3d Cir. 2017) (internal alteration removed)
(quoting Bruno v. Erie Ins. Co., 106 A.3d 48, 69 n. 17 (Pa. 2014)). Therefore, Walsh/Granite’s
motion to dismiss counts III and IV of the consolidated complaint is denied, without prejudice, to
be raised on a more fully developed record. See Kappe Assocs., Inc. v. Chesapeake Envtl. Equip.,
LLC, 2016 WL 1257665, at *10 (E.D. Pa. 2016) (collecting cases that declined to apply the gist of
the action doctrine at the pleading stage); Sensus USA, Inc. v. Elliot Bay Eng’g, Inc. 2011 WL
2650028, *8 (W.D. Pa. 2011) (“Because application of the gist of the action doctrine depends on
the facts of each particular case, … this issue is best left for resolution on a … post-discovery
motion for summary judgment.”).

3

Walsh/Granite next moves to dismiss HDR’s claim for declaratory judgment relief at count
VI of the consolidated complaint. In this count, HDR seeks a declaration from the Court as to the
interpretation of a specific provision of the parties’ contract that Walsh/Granite is currently using
to justify its withholding of approximately $29.5 million from HDR. Because the project is set to
last several more years and Walsh/Granite has indicated that it will withhold more of HDR’s
money in the future pursuant to this provision, HDR seeks a declaration from the Court as to the
parameters of the provision. According to Walsh/Granite, however, the Court should dismiss this
claim because it is duplicative to HDR’s breach of contract claim and because the resolution of
this claim only would result in unwarranted piecemeal litigation.
When considering only the allegations in the consolidated complaint, the Court concludes
that dismissal of the declaratory judgment claim is also premature because it is presently unclear
whether a declaration by the Court as to the particular contractual provision at issue would serve
as a useful clarification to the parties. Baker v. Deutschland GmbH, 240 F.Supp.3d 341, 349-50
(M.D. Pa. 2016). In this regard, the Court is mindful that “if there is any doubt as to whether the
[declaratory judgment claim] is redundant, the better course is to deny the motion to dismiss
without prejudice until the facts have been developed, either at summary judgment or at trial.”
Barnett v. Platinum Equity Capital Partners II, L.P., 2017 WL 3190654, at *4 (W.D. Pa. 2017);
see also Bancroft Life & Cas. v. Lo, 2013 WL364239, at *7 (W.D. Pa. 2013) (so long as the
declaratory judgment claim is more than symbolic and would serve a useful purpose, the Court
should decline to dismiss it at the pleading stage). Moreover, as recently noted by the Court of
Appeals for the Third Circuit, “[w]hen the legal claims are independent [of the declaratory claim],
courts generally will not decline the declaratory judgment action in order to avoid piecemeal
litigation.” Rarick v. Federated Svc. Ins. Co., 852 F.3d 223, 228 (3d Cir. 2017). Here, HDR’s

4

legal claims are independent of the declaratory judgment claim because “they are alone sufficient
to invoke the court’s subject matter jurisdiction and can be adjudicated without the requested
declaratory relief.” Id. Therefore, at this early stage of the case, the Court declines to dismiss count
VI of the consolidated complaint, as requested by Walsh/Granite.
Finally, Walsh/Granite seeks dismissal of HDR’s quantum meruit claim at count II of the
consolidated complaint because HDR expressly alleges that it has performed all of the obligations
under the parties’ contract and does not otherwise allege that: (1) the contract covers only a part
of the parties’ relationship; or, (2) the contract’s existence is uncertain or its validity is disputed.
See Vantage Learning (USA), LLC v. Edgenuity, Inc., 246 F.Supp.3d 1097, 1100-01 (E.D. Pa.
2017). However, “both the Federal Rules of Civil Procedure and well-established case law permit
plaintiffs to plead in the alternative,” even if the “breach of contract and unjust enrichment claims
generally cannot coexist in the end.” Sensus, 2011 WL 2650028, at *5 (citing Fed.R.Civ.P.
8(e)(2)); see also Powers v. Lycoming Engines, 328 Fed. App’x 121, 126 (3d Cir. 2009) (under
Pennsylvania law, unjust enrichment is a synonym for quantum meruit and is a form of restitution).
Consequently, the Court again finds that Walsh/Granite’s argument in support of dismissal is
premature, notwithstanding that this claim may ultimately prove to be inconsistent with the breach
of contract claim and subject to dismissal at a later stage of the case. See Target Global Logistics
Svcs, Co. v. KVG, LLC, 2015 WL 8014752, *4 & n. 5 (E.D. Pa. 2015) (“It is not unusual … for a
claim in restitution to coexist with a claim under the law of contracts at the pleadings stage when
… the status of the plaintiff's performance under the contract has yet to be determined, even if a
later finding that the plaintiff is entitled to contractual remedies may, but not necessarily, displace
the restitution claim.”).

5

Accordingly, IT IS HEREBY ORDERED that Walsh/Granite’s motion for partial
dismissal [28] is DENIED, without prejudice, to Walsh/Granite renewing such arguments at the
appropriate time in these proceedings.
IT IS FURTHER ORDERED that HDR shall file its consolidated complaint on the docket
in the lead case, 17-558, FORTHWITH; and,
IT IS FURTHER ORDERED that, in accordance with Rule 12(a)(4), Walsh/Granite shall
file an answer to the consolidated complaint on or before November 28, 2017, given the Court
holiday in that time period.
/s/ Nora Barry Fischer
Nora Barry Fischer
United States District Judge
Date: November 7, 2017
cc/ecf: All counsel of record.

6