Simpson Plastering LLC v. Skanska-Trident et al
ORDER granting in part and denying in part 17 Defendants' Motion to Dismiss. The Court DISMISSES Plaintiff's claim for injunctive relief under the amended complaint's second cause of action and DISMISSES Plaintiff's claims under the amended complaint's fourth and fifth causes of action. The motion to dismiss is otherwise DENIED. AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 2/27/2017.(sshe, )
IN THE UNITED STATES DISTRICT COllJR1VED CLERK'S OFFICE
DISTRICT OF SOUTH CAROLINA
lOll FEB 21 P 12: 29
Simpson Plastering, LLC,
SkanskaiTrident, et al. ,
. l>..T. r~ flt!r'lTAp,til1iDT~JfG
ORDER AND OPINION
This matter is before the Court on Defendants' motion to dismiss. Defendants seek
dismissal of Plaintiffs second, third, fourth, fifth, and seventh causes of action. For the reasons
set forth below, the Court grants in part and denies in part Defendants' motion.
Plaintiff Simpson Plastering, LLC provided manpower for interior and exterior plastering
at the Gaillard Center Project in Charleston (the "Project"). (Dkt. No. 11
SkanskaiTrident, a joint venture partnership between Skanska USA Building, Inc. and Trident
Construction, LLC, contracted with the City of Charleston to serve as the construction manager at
risk l for the Project on January 25, 2011. (ld ~ 12.) Defendants Zurich American Insurance
Company, Fidelity and Deposit Company of Maryland, Liberty Mutual Insurance Company,
Federal Insurance Company, the Continental Insurance Company, Travelers Casualty and Surety
Simpson alleges SkanskaiTrident was the Project's general contractor. (Dkt. No. 11 ~ 12.)
SkanskaiTrident asserts that it was a construction manager and not a general contractor. Although
allegations typically are assumed true when considering a motion to dismiss, it does appear that
SkanskaiTrident was contracted as construction manager at risk on the Project. See, e.g., Gailliard
Performance Hall Foundation, Contractor's Goal: On Time, on Budget, and Being a Good
Neighbor (Sept. 5, 2012), http://www.gaillardfoundation.org/latest-news/contractors-goalon-time
on-budget-and-being-a-good-neighbor/. The distinction between a general contractor and a
construction manager at risk is immaterial to the Court's consideration of the present motion.
Company of America (together, the "Sureties") issued a payment bond for the Project. (Id.
SkanskalTrident allegedly subcontracted Defendant Horus Construction of NC, Inc. for interior
and exterior plastering at the Project. (Id.
14.) Defendant GPM, Inc. contracted Simpson to
provide manpower for plastering at the Project. (Id.
of Horus. (Id.
15.) Simpson alleges GPM is an alter ego
Simpson alleges that it provided manpower for the Project under its contract with GPM
and that SkanskalTrident directly paid Simpson $1.7 million by means of checks payable jointly
to Horus and Simpson, but that SkanskalTrident did not pay the final amount due of $225,399.96.
26.) Simpson brings the present action to recover that amount, plus damages and fees.
According to Simpson, SkanskalTrident has refused to pay because of a dispute regarding
Simpson's warranty obligations. (Id.
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits the dismissal of an action if
the complaint fails "to state a claim upon which relief can be granted." Such a motion tests the
legal sufficiency of the complaint and "does not resolve contests surrounding the facts, the merits
of the claim, or the applicability of defenses. . .. Our inquiry then is limited to whether the
allegations constitute' a short and plain statement of the claim showing that the pleader is entitled
to relief.'" Republican Party ofN.e. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (quotation marks
and citation omitted). In a Rule 12(b)(6) motion, the Court is obligated to "assume the truth of all
facts alleged in the complaint and the existence of any fact that can be proved, consistent with the
complaint's allegations." E. Shore MIas., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th
Cir. 2000). However, while the Court must accept the facts in a light most favorable to the non
moving party, it "need not accept as true unwarranted inferences, unreasonable conclusions, or
To survive a motion to dismiss, the complaint must state "enough facts to state a claim to
relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although
the requirement of plausibility does not impose a probability requirement at this stage, the
complaint must show more than a "sheer possibility that a defendant has acted unlawfully."
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint has "facial plausibility" where the
pleading "allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Id.
Simpson asserts a statutory cause of action for attorneys' fees (first cause of action) and
six different theories ofrecovery for the $225,399.96 allegedly due: injunctive relief (second cause
of action), quantum meruit (third), conversion (fourth), declaratory judgment (sixth), payment
bond action (seventh), and breach of contract (eight). Simpson also seeks an equitable accounting
of all Project monies and assets (fifth cause of action). Defendants deny Simpson's entitlement to
relief and move for dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure of all
asserted causes of action except the causes of action for attorneys' fees, declaratory judgment, and
breach of contract.
Second Cause of Action - Lien on Contract Funds
In its second cause of action, Simpson seeks a declaratory ruling that under South Carolina
Code § 29-7-10, Simpson is entitled to a first lien on funds received by SkanskaiTrident for the
construction of the Project and an injunction directing SkanskalTrident to pay Simpson
$225,399.96. South Carolina Code § 29-7 -10 provides that "laborers, as well as all subcontractors
and persons who shall furnish material for [the erection, alteration, or repair of a] building, shall
have a first lien on the money received by such contractor for the erection, alteration, or repair of
such building in proportion to the amount oftheir respective claims." The lien is against the money
paid by the property owner to the prime contractor. Lowndes Hill Realty Co. v. Greenville
Concrete Co., 93 S.E.2d 855, 865 (S.C. 1956). Laborers asserting the lien need not be employed
by the contractor who receives the money. CR. Meyer & Sons Co. v. Custom Mech CSRA, LLC,
773 S.E.2d 361, 364 (S.C. Ct. App. 2015). Any unpaid laborer who worked on the building may
be entitled to a lien on funds paid by the owner to the prime contractor for the building project. Id.
Simpson has alleged facts sufficient for a plausible claim to a first lien under S.C. Code § 29-7-10
against monies SkanskaiTrident received from the City of Charleston.
memorandum in support of its motion to dismiss presents no arguments to the contrary, instead
arguing only that Simpson is not entitled to injunctive relief.
In addition to a declaratory ruling that it has a lien on project funds, Simpson seeks an
injunction ordering SkanskaiTrident to pay the amount Simpson claims is due. "An injunction is
a drastic remedy issued by the court in its discretion to prevent irreparable harm suffered by the
plaintiff." Scratch Golf Co. v. Dunes W Residential Golf Props., Inc., 603 S.E.2d 905, 907-08
(S.C. 2004). The plaintiff must establish, inter alia, that it would suffer irreparable harm if the
irUunction were not granted and that there is an inadequate remedy at law. Id. Generally, harms
reparable by an award of money are not irreparable harms.
Hughes Network Sys., Inc. v.
InterDigital Commc'ns Corp., 17 F.3d 691,694 (4th Cir. 1994). And generally, a party may not
obtain injunctive relief where it is claiming a loss that can be adequately remedied at law by an
award of money damages. "Yet, even where the ultimate relief sought is money damages, federal
courts have found preliminary injunctions appropriate where it has been shown that the defendant
'intended to frustrate any judgment on the merits' by 'transfer[ring its assets] out of the
jurisdiction,'" In re Feit & Drexler, Inc., 760 F.2d 406,416 (2d Cir. 1985), or is judgment-proof,
Lakeview Tech. Inc. v. Robinson, 446 F.3d 655, 657 (7th Cir. 2006), or in other extraordinary
In such circumstances, injunctive relief operates "to preserve the plaintiff s
opportunity to receive an award of money damages at judgment." See Hughes Network Sys., 17
F.3d at 694.
Here, Simpson seeks an injunction to recover a sum certain allegedly due on a contract plus
fees and money damages related to Defendants' purported failure to tender that sum. Money
damages awarded in a judgment are usually an adequate remedy for a failure to pay a contractual
debt. Simpson therefore must show that injunctive relief is necessary to preserve the opportunity
to receive a judgment for money damages. Simpson, however, alleges only that SkanskalTrident
may otherwise utilize monies due Simpson, an allegation true in nearly any action to collect a
Simpson has not plausibly pleaded any allegation that SkanskalTrident is
judgment proof, that SkanskalTrident intends to transfer assets to frustrate judgment, or that
injunctive relief is otherwise essential. The Court therefore grants the motion to dismiss as to the
claim for injunctive relief in the second cause of action, but denies it as to the claim for a
declaratory ruling that Simpson is entitled to a lien on project funds.
Third Cause of Action - Quantum Meruit
Simpson also seeks payment from SkanskalTrident on a theory of quantum meruit.
Quantum meruit requires (l) a benefit conferred upon the defendant by the plaintiff, (2) realization
of that benefit by the defendant, and (3) defendant's retention of the benefit such that it is unjust
for defendant to retain it without paying its value. Williams Carpet Contractors, Inc. v. Skelly,
734 S.E.2d 177, 180 (S.C. Ct. App. 2012). Simpson alleges that its services on the Project
benefited SkanskaJTrident as construction manager for the Project and that SkanskalTrident has
realized that benefit, and that it is unjust for SkanskalTrident to retain that benefit without payment.
(Dkt. No. 11
Defendants argue Simpson cannot assert a quantum meruit claim as a matter of law,
because an express contract (with GPM) encompasses payment for Plaintiffs' services. (Dkt. No.
17-2 at 7-8.) Defendants' argument is without merit. Where services rendered "are encompassed
within the terms of an express contract which has not been abandoned or rescinded, the plaintiff
may not recover under quantum meruit. ... Case law bars recovering under both theories."
Williams Carpet Contractors, 734 S.E.2d at 181 (emphasis in original). There is no rule against
pleading under both theories: "A breach of contract claim and quantum meruit claim can be
alternative rather than inconsistent remedies." Id. Recovery under breach of contract is preferred
to recovery under quantum meruit where there is an express contract covering services rendered
because the recovery for those services should be the contractually agreed amount rather than an
amount determined in equity, not because contracts bar quantum meruit claims. See Johnston v.
Brown, 348 S.E.2d 391, 395 (S.C. Ct. App. 1986), rev'd on other grounds, 357 S.E.2d 450 (S.C.
1987) ("While a recovery may be had in quantum meruit for services fully performed under an
express contract, [ J the plaintiffs recovery is limited to the amount the parties agreed should be
paid for the services."). The Court therefore denies the motion to dismiss as to the third cause of
Fourth Cause of Action - Conversion
Simpson also alleges SkanskaiTrident converted funds paid by the City of Charleston that
were intended for payment to Simpson. (Dkt. No. 11
50-52.) Defendants argue Simpson has
not stated a claim for conversion because Simpson only seeks payment of a debt (and damages
from alleged nonpayment). The Court agrees. "Money may be the subject of conversion ...
[h]owever, there can be no conversion where there is a mere obligation to pay a debt. Thus, where
there is merely the relationship of debtor and creditor, an action based on conversion of the funds
representing the debt is improper." Owens v. Andrews Bank & Tr. Co., 220 S.E.2d 116, 119 (S.C.
1975). In other words, failure to pay an amount due under a contract is not tortious conversion,
because "[c]onversion is the unauthorized exercise of ownership over the personal property of
another." See Richardson's Rests., Inc. v. Nat'l Bank o/S.c., 403 S.E.2d 669, 672 (S.C. Ct. App.
1991). Conversion applies to money only when "there is an obligation on the defendant to deliver
a specific, identifiable fund to the plaintiff." Id.
Simpson misapprehends the rule that conversion does not arise from the mere obligation
to pay a debt as applying only when the debtor did not act improperly, observing that courts have
allowed conversion actions regarding money where the defendants acted wrongly. (See Dkt. No.
19 at 9.) Generally, a party found liable to another party is said to have acted improperly, and the
mere fact that the plaintiff won a case is not an analytically useful distinction. The cases Simpson
cites in support of its position are more usefully distinguished in seeking recovery of the plaintiffs'
own money contributed or deposited with the defendants, rather than payment of a debt owed for
the plaintiffs' services. See Owens, 220 S.E.2d at 119-120 (S.C. 1975) (holding it conversion
when a bank withheld a check for the balance of a closed account from a plaintiff to pressure her
husband regarding his unrelated obligations); Mullis v. Trident Emergency Physicians, 570 S.E.2d
549,550-51 (S.c. Ct. App. 2002) (holding a physician's equity contribution to a partnership had
Had Simpson invoiced the City of Charleston, had the City of Charleston given funds in
payment of those invoices to SkanskaiTrident for delivery to Simpson, and had SkanskaiTrident
instead taken those funds for its own use, then Simpson might have a claim for conversion. But
Simpson has not alleged anything suggesting the City of Charleston identified specific funds for
delivery to Simpson by SkanskaiTrident. Instead, Simpson only alleges that the City of Charleston
"intended" SkanskaiTrident to pay Simpson. (Dkt. No. 11
50.) That the City of Charleston
presumably intended, in a general sense, for its payments to SkanskaiTrident to cover
SkanskaiTrident's costs, which include employees, vendors, and subcontractors, does not
somehow convert SkanskaiTrident's revenues into a constructive bailment and every contract
action brought by SkanskaiTrident's employees, vendors, or subcontractors into a conversion
action. Because a conversion action does not arise from the obligation to pay a debt owned for
services rendered, which is precisely what Simpson alleges here, the Court grants Defendants
motion to dismiss Plaintiff's conversion claim.
Fifth Cause of Action - Equitable Accounting
Simpson also seeks "a full accounting ofall monies and assets obtained by SkanskaiTrident
on the Project." (Dkt. No. 11
59.) "The equitable remedy of 'accounting' ... refers to 'an
adjustment ofthe accounts of the parties and a rendering of a judgment for the balance ascertained
to be due.'" Historic Charleston Holdings, LLC v. Mallon, 673 S.E.2d 448, 453 (S.C. 2009)
(quoting 1 Am. Jur. 2d Accounts and Accounting § 52). Where there is no fiduciary relationship,
an accounting is usually appropriate only where there is a need to discover the amount due. See,
e.g., Consignment Sales, LLC v. Tucker Oil Co., 705 S.E.2d 73, 77 (S.C. Ct. App. 2010) (finding
accounting appropriate where "[defendant] was in exclusive control of the information needed to
determine the amount [plaintiff] is owed"). By contrast, "[a]n accounting is not available in an
action where the plaintiff alleges the right to recover a sum certain or a sum that can be made
certain by calculation." 1 Am. Jur. 2d Accounts and Accounting § 52. Here, Simpson alleges the
right to recover a sum certain: A principal amount of $225,399.96 (merely 0.2% of the payment
bond) for services rendered under a contract. (See Dkt. No. 11 ~ 26.). Simpson's claims, ifproven,
will be fully satisfied by payment of that sum and, possibly, additional amounts arising from the
failure to pay as agreed. Simpson has not alleged any facts suggesting it has a right to a full
accounting of the finances of the entire project. The Court therefore grants the motion to dismiss
as to fifth cause of action.
Seventh Cause of Action - Payment Bond Claim
The Sureties provided a $110 million payment bond for the Project. (Dkt. No. 11-1.)
Simpson sues on that payment bond, alleging that it provided the proper notice under the terms of
the bond yet the Sureties have refused to pay its claim. (Dkt. No. 11 ~~ 67-70.) Defendants argue
Simpson is a third-tier subcontractor and, as such, is too far removed from the payment bond to
assert a claim on it. Defendants' argument is without merit. The payment bond defines "claimant"
to include (1) anyone with a direct contract with the SkanskafTrident, (2) anyone with a direct
contract with any subcontractor ofSkanskafTrident, and (3) anyone who "has rightfully asserted a
claim under an applicable mechanic's lien or similar statute against the real property upon which
the Project is located." (Dkt. No. 11-1 at 3.) South Carolina Code 29-5-20 states, "Every laborer,
mechanic, subcontractor, or person furnishing material for the improvement of real estate when
the improvement has been authorized by the owner has a lien thereon ... to the value of the labor
or material so furnished, including the costs of the action and a reasonable attorney's fee ...."
Simpson has alleged that it provided notice of its claim to SkanskafTrident. (See Dkt. No. 11
29); cj S.C. Code § 29-5-20(B) (requirements of notice). Simpson is, therefore, a claimant on the
bond, if it proves its allegations.
Simpson's opposition devotes two pages to argument based on South Carolina Code § 11
35-3030(2)(c), South Carolina's "little Miller Act" governing state construction contracts, which
expressly provides a right of action on a payment bond for a "remote claimant" who has furnished
labor to a bonded contractor or his subcontractors, if timely notice is given. (Dkt. No. 19 at 11
13.) However, that statute does not appear to apply to contracts with the City of Charleston. See
S.C. Code §§ 11-35-40 (act applies only to governmental bodies as defined in the act), 11-35
310(18) ("governmental body" excludes municipalities).
The City of Charleston, not a
"governmental body" as defined in South Carolina Code § 11-35-310, contracted with
SkanskaiTrident for the construction of the project. (Dkt. No. 11
12.) No party has cited any
statute or other authority that appears to preempt the definition of "claimant" provided in the text
of the payment bond itself.
Moreover, even when assuming (without deciding) that a statute allowed only those with
a direct contractual relationship with a contractor or subcontractor-but not with a sub
subcontractor-to sue on a payment bond, South Carolina courts have found a direct agreement
with the subcontractor where the subcontractor "paid [the plaintiff] directly for materials used on
the project" and "agreed to be responsible for direct payment to [the plaintiff]." Moore Elec.
Supply, Inc. v. Ward, 450 S.E.2d 96, 99 (S.C. Ct. App. 1994). Here, Simpson has alleged
SkanskaiTrident entered into joint check agreements, under which SkanskaiTrident paid Simpson
directly. (Dkt. No. 11
25-26.) Simpson has alleged facts that may establish a direct agreement
(for payment bond purposes) with SkanskaiTrident to provide labor for the Project.
Finally, Simpson has plausibly alleged that GPM is an alter ego of Horus. (Dkt. No. 11
17-21.) Defendants correctly argue that application of the alter ego doctrine does not mean that
one company is liable for the acts of another company because there is really only one company
both exist as separate entities and the parent's limited liability is disregarded only to such extent
as the ends ofjustice require in the present case. (See Dkt. No. 17-2 at 13 & n.55.) But if Horus
is liable for GPM's contractual obligations with Simpson because GPM is an alter ego of Horus,
then GPM and Horus may "collapse" into a single tier for payment bond purposes. See United
States ex reI. Glob. Bldg. Supply, Inc. v. WNH Ltd P'ship, 995 F.2d 515, 519 (4th Cir. 1993)
(collapsing two legal entities into a single unit for Miller Act payment bond analysis is "appropriate
only where ordinary principles of corporate law permit the courts to disregard corporate forms").
Contrary to Defendants argument, proving GPM is an alter ego of Horus could move Simpson up
the chain of contracts. Thus, even if sub-subcontractors are somehow excluded from suing on the
payment bond for the Project, Simpson has alleged facts sufficient to state a claim on the payment
The Court therefore denies the motion to dismiss as to seventh cause of action.
For the foregoing reasons, the Court GRANTS IN PART AND DENIES IN PART
Defendants' motion to dismiss (Dkt. No. 17). The Court DISMISSES Plaintiffs claim for
injunctive relief under the amended complaint's second cause of action and DISMISSES
Plaintiffs claims under the amended complaint's fourth and fifth causes of action. The motion to
dismiss is otherwise DENIED.
AND IT IS SO ORDERED.
Richard Mark Gergel
United States District Court Judge
February '1./ , 2017
Charleston, South Carolina
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?