In & Out Welders Inc v. Sunbelt Rentals Inc
OPINION AND ORDER denying 37 Motion to Dismiss for Failure to State a Claim. Defendant's Answer due by 6/6/2017. Signed by Honorable Mary Geiger Lewis on 5/23/2017.(abuc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
IN & OUT WELDERS, INC.,
SUNBELT RENTALS, INC.,
CIVIL ACTION NO. 7:16-04021-MGL
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANT’S MOTION TO DISMISS
This is a breach of contract putative class action. This is one of several putative class lawsuits
filed against Defendant Sunbelt Rentals, Inc. (Defendant) across the United States. The Court has
jurisdiction over the matter under 28 U.S.C. § 1332.
Pending before the Court is Defendant’s motion to dismiss the First Amended Class Action
Complaint (Complaint) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Having
reviewed the motion, the response, the reply, the record, and the applicable law, the Court will deny
FACTUAL AND PROCEDURAL HISTORY
The Court draws the relevant facts for purposes of this motion from the Complaint.
Plaintiff In & Out Welders, Inc. (Plaintiff) is an Alabama corporation. Defendant is a North
Carolina corporation with its principal place of business in South Carolina. Plaintiff has rented
equipment from Defendant in at least sixteen states, including South Carolina.
Plaintiff alleges Defendant requires every customer seeking to rent equipment to enter into
a standard, pre-printed rental contract. Plaintiff attached a blank form contract to the Complaint,
which Plaintiff states contains identical relevant language for every transaction throughout the
putative class period. This form contract establishes, in relevant part:
Customer is responsible for (i) all rental rates, fees, licenses, taxes and
governmental charges based on Customer’s use of the Equipment[;] (ii) delivery
and pickup costs to and from the Store; [and] (vi) fuel used during the Rental Period
(Customer may either return the Equipment fully fueled or a fuel charge shall be
assessed (designed to cover [Defendant’s] direct and indirect costs of refueling the
Equipment)) . . . .
ECF No. 29-1 at 3. Pursuant to the rental contracts, if Defendant refuels or transports equipment,
it may charge for (1) refueling an amount “designed to cover [Defendant’s] direct and indirect
costs of refueling” (the Refueling Charges) and for (2) transportation an amount designed to cover
its “delivery and pickup costs to and from the Store” (the Transportation Surcharges). ECF No.
29 at 8-9.
The Complaint avers Defendant knowingly breached these contractual mandates by
assessing (1) Refueling Charges not designed to cover just its refueling costs, which resulted in
Defendant recovering far more than those costs, and (2) Transportation Surcharges on top of what
Defendant already charged for pickup and delivery, ensuring Defendant recovered far more than
its pickup and delivery costs. Plaintiff maintains no putative class member in this action could
have had full knowledge of the alleged unlawful nature of Defendant’s conduct.
Defendant filed its motion to dismiss on April 21, 2017, to which Plaintiff filed a response
and Defendant filed a reply. In Defendant’s motion to dismiss, it attached a sample contract
purportedly reflecting a September 10, 2014, rental transaction between Plaintiff and Defendant,
along with related invoices. ECF Nos. 37-2 to -5. The Court, having been fully briefed on the
relevant issues, is now prepared to discuss the merits of Defendant’s motion.
STANDARD OF REVIEW
AThe purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint.@ Edwards
v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a motion to dismiss, the
Federal Rules of Civil Procedure require a complaint contain Aa short and plain statement of the
claim showing that the pleader is entitled to relief.@ Fed. R. Civ. P. 8(a) (2).
Although Rule 8(a) does not require A>detailed factual allegations,=@ it requires Amore than
an unadorned, the-defendant-unlawfully-harmed-me accusation,@ Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), to A>give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests,=@ Twombly, 550 U.S. at
555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). In other words, Aa complaint must contain
sufficient factual matter, accepted as true, to >state a claim to relief that is plausible on its face.=@
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible Awhen
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.@ Id. (citing Twombly, 550 U.S. at 556).
The court may consider only the facts alleged in the complaint, which may include any
documents either attached to or incorporated in the complaint, and matters of which the court may
take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
Although the court must accept the plaintiff=s factual allegations as true, any conclusory allegations
are unentitled to an assumption of truth, and even those allegations pled with factual support need
be accepted only to the extent Athey plausibly give rise to an entitlement to relief.@ Iqbal, 556 U.S.
at 678-79. In sum, factual allegations must be enough to raise a right to relief above the speculative
level, on the assumption all the allegations in the complaint are true, even if doubtful in fact.
Twombly, 550 U.S. at 555.
CONTENTIONS OF THE PARTIES
In Defendant’s motion, it first contends Plaintiff’s claim for breach of contract fails because
the Complaint neglects to allege a material breach or damages. Defendant states, by way of
example, the September 10, 2014, contract expressly disclosed the amount of the Transportation
Surcharges at the inception of the rental transaction. Further, Defendant claims it disclosed the
amount of the Refueling Charges at the end of the transaction, and the contract made clear Plaintiff
would be responsible for refueling the equipment. Essentially, Defendant asseverates Plaintiff
paid the amounts it agreed to pay, as shown by the example of the September 10, 2014, contract
and invoices, and therefore Plaintiff cannot bring a breach of contract claim.
Next, Defendant maintains Plaintiff’s second cause of action alleging breach of the implied
covenant of good faith and fair dealing fails as a matter of law. Finally, Defendant urges Plaintiff’s
claims are barred by the voluntary payment doctrine because Plaintiff voluntarily paid the
Transportation Surcharges and the Refueling Charges without protest or inquiry.
Plaintiff takes issue with each of Defendant’s assertions.
DISCUSSION AND ANALYSIS
For organizational purposes, the Court will discuss Defendant’s three arguments in an order
different than Defendant presents them. The Court first turns to Defendant’s argument Plaintiff’s
claim for breach of the implied covenant of good faith and fair dealing fails as a matter of law.
Defendant argues it is entitled to dismissal of this claim, alleging South Carolina does not
recognize this claim as an independent cause of action. Plaintiff responds by asserting it brings
this claim as an additional ground for breach of contract, stating Defendant “has breached the
contract, additionally, by acting in bad faith, arbitrarily, and without honesty in fact.” ECF No. 39
at 19. In South Carolina, “the implied covenant of good faith and fair dealing is not an independent
cause of action separate from the claim for breach of contract.” RoTEC Servs, Inc. v. Encompass
Servs, Inc., 597 S.E.2d 881, 884 (S.C. Ct. App. 2004). Rather, it is subsumed under the claim for
breach of contract. Id. at 883. The implied covenant of good faith and fair dealing is “another
term of the contract at issue” and is “implied in every contract.” Id. at 884. Therefore, the Court
will deny Defendant’s motion to dismiss as it pertains to Plaintiff’s claim for breach of the implied
covenant of good faith and fair dealing, with the clarification that this claim is another ground
upon which Plaintiff alleges the contract was breached, and not a separate cause of action.
Next, the Court addresses Defendant’s argument Plaintiff’s claims are barred by the voluntary
payment doctrine. Defendant seeks to use the September 10, 2014, contract to show it fully
disclosed the amount of the Refueling Charges through invoices at the conclusion of the
transaction and the amount of the Transportation Surcharges in the contract at the inception of the
rental transaction. See Philips v. Pitt Cty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (stating
courts may consider documents “attached to the motion to dismiss, so long as they are integral to
the complaint and authentic” when reviewing a Rule 12(b)(6) motion). Defendant also states
Plaintiff voluntarily paid the Refueling Charges and the Transportation Surcharges for years.
In South Carolina, “[i]t is well-settled law that money voluntarily paid with full knowledge of
all material facts and without any fraud, duress, or extortion cannot be recovered, although there was
no legal obligation to make such payment.” Shockley v. Wickliffe, 148 S.E. 476, 477 (S.C. 1929)
(citing Hardaway v. S. Ry., 73 S.E. 1020, 1025 (S.C. 1912)). The voluntary payment doctrine is an
affirmative defense; consequently, Defendant’s motion to dismiss should be granted only if the
applicability of the doctrine is apparent from the face of the Complaint. See Goodman v. Praxair,
Inc., 494 F.3d 458, 464 (4th Cir. 2007). As noted above, Plaintiff maintains no putative class
member in this action could have had full knowledge of the alleged unlawful nature of Defendant’s
conduct at the time the payments were made.
Viewing the factual allegations of the Complaint in the light most favorable to Plaintiff,
the Court holds the face of the Complaint fails to show whether Plaintiff had full knowledge of
Defendant’s alleged wrongful conduct. The Court is firmly of the view determining the state of
Plaintiff’s knowledge, and thus the voluntariness of payment, are fact-intensive inquiries properly
reserved for any motion or motions for summary judgment the parties may decide to file at the
close of discovery.
Accordingly, the Court holds, at this juncture, Defendant’s arguments
regarding the voluntary payment doctrine are premature.
Finally, the Court examines Defendant’s contention Plaintiff’s claim for breach of contract
fails as a matter of law. But, the only contracts in the record are the blank form contract provided
by Plaintiff and the September 10, 2014, contract provided by Defendant. The Court is unprepared,
at this very early stage of the litigation, without any discovery having taken place, to grant
Defendants’ motion on this issue. Therefore, the Court will deny the remainder of Defendants’
motion to dismiss.
Wherefore, based on the foregoing discussion and analysis, it is the judgment of this Court
Defendant’s motion to dismiss is DENIED.
IT IS SO ORDERED.
Signed this 23rd day of May, 2017, in Columbia, South Carolina.
s/Mary Geiger Lewis
MARY GEIGER LEWIS
UNITED STATE DISTRICT JUDGE
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