Mesa Associates, Inc et al v. Pas-Coy, LLC et al (TV2)
Filing
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MEMORANDUM, OPINION AND ORDER denying Defendant Pas-Coy's 7 Motion for Partial Dismissal. Signed by Chief District Judge Thomas A Varlan on 7/23/13. (ABF)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
UNITED STATES OF AMERICA for Use and
Benefit of MESA ASSOCIATES, INC.,
Plaintiff,
v.
PAS-COY, LLC, and
TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA,
Defendants.
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No.: 3:12-CV-568
(VARLAN/GUYTON)
MEMORANDUM OPINION AND ORDER
This civil action is before the Court on Defendant Pas-Coy, LLC’s Motion for
Partial Dismissal [Doc. 7]. Use-plaintiff United States of America for Use and Benefit of
MESA Associates, Inc. (“plaintiff”) responded [Doc. 13] in opposition to the motion, and
PAS-COY, LLC (“PAS-COY”) filed a reply [Doc. 14]. The Court has reviewed the
relevant law and arguments and, for the reasons stated below, will deny the motion for
partial dismissal.
I.
Positions of the Parties
PAS-COY moves, pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, for an order partially dismissing the complaint [Doc. 1], specifically plaintiff’s
Third Cause of Action, for failure to state a claim upon which relief could be granted.
The complaint alleges four causes of action, the first of which is for breach of contract
against PAS-COY, the second of which is for breach of the implied covenant of good
faith and fair dealing against PAS-COY, the third of which is for quantum meruit
recovery against PAS-COY, and the fourth of which is for a Miller Act payment bond
against Travelers Casualty and Surety Company of America. In its motion for partial
dismissal, PAS-COY seeks an order dismissing the third cause of action, for recovery
under a theory of unjust enrichment, or quantum meruit, because the parties have a valid
and enforceable contract in the form of an express written agreement, making recovery
under a theory of quantum meruit unavailable to plaintiff. The relevant factual basis set
forth in the complaint is as follows:
7.
On or about November 7, 2007, PAS-COY, a general contractor,
entered into a written designed-build contract with BWXT Y-12, LLC on
behalf of the United States of America, by and through the United States
Department of Energy, contract number 4300062152 (hereinafter, ‘Prime
Contract’) by the terms of which Pas-Coy agreed to perform all work for a
project known as ‘Steam Plant Life Extension Project, Steam Plaint
Replacement Sub-project’ at the Y-12 National Security Complex at Oak
Ridge, Tennessee (‘Project’).”
8.
On or around, January 17, 2008, Mesa and Performance Contracting,
Inc. entered into a written subcontract agreement in connection with the
project for the performance of, among other things, engineering and design
services. (the ‘Subcontract’) A true and correct copy of the Subcontract is
attached hereto as Exhibit A and incorporated by this reference.
9.
On or about February 29, 2008, Mesa, Performance Contracting, Inc.
and Pas-Coy entered into an assignment of contract in which Performance
Contracting Inc. assigned its Subcontract with Mesa to Pas-Coy. A true
and correct copy of this assignment of contract is attached hereto as Exhibit
B and incorporated by this reference.
[Doc. 1, ¶¶ 7-9].
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PAS-COY asserts that there are no facts alleged in the complaint that would
challenge the validity of the contract, subcontract, or the assignment of contract, or that
could provide a basis for equitable relief under a theory of unjust enrichment. PAS-COY
correctly points out that, under Tennessee law, a party may only recover under a quantum
meruit theory when there is no valid contractual agreement between the parties or any
such contract has become unenforceable. See Whitehaven Cmty. Baptist Church v.
Holloway, 973 S.W.2d 592, 596 (Tenn. 1998). A party may not so recover when a valid
contract and enforceable exists. See Metro. Gov’t of Nashville & Davidson Cnty. v.
CIGNA Healthcare of Tenn., Inc., 195 S.W.3d 28, 32-33 (Tenn. 2005). Because, in the
present case, plaintiff admits that the project at issue and relationship between PAS-COY
and plaintiff is governed by a written agreement, PAS-COY argues that the Court should
dismiss the claim for relief based upon a theory of quantum meruit.
Plaintiff responds that it is well-established under Rule 8(d) of the Federal Rules
of Civil Procedure that a complaint may plead alternative theories and that many courts
have construed this rule to allow parties to alternatively plead claims for quantum meruit
and breach of contract. Plaintiff cites to several cases, many of them from federal courts
in Tennessee, supporting its position that, while a party may not recover under both a
breach of contract and an unjust enrichment theory, the party may plead both alternative
theories of recovery [Doc. 13, pp. 2-3 (citing Union Leasing, Inc. v. Advantage, Inc., No.
2-12-0666, 2012 WL 5331566, at *3 (M.D. Tenn. Oct. 26, 2012); Town of Smyrna, Tenn.
v. Mun. Gas Auth. of Ga., No. 3:11-0642, 2012 WL 1313340, at *13 (M.D. Tenn. Apr.
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17, 2012); Holt v. Macy’s Retail Holdings, Inc., 719 F. Supp. 2d 903, 916 (W.D. Tenn.
2010); Broadnax v. Smith Trans. Co., Inc., 694 F. Supp. 2d 947, 952 (W.D. Tenn. 2010);
In re Nissan N. Am., Inc. Odometer Litig., 664 F. Supp. 2d 873 (M.D. Tenn. 2009);
Sheller, Ludwig & Sheller P.C. v. Equitrac, No. 07-2310, 2008 WL 2370826, at *5 (E.D.
Pa. June 9, 2008); MACTEC, Inc. v. Bechtel Jacobs Co., LLC, No. 3:05-CV-340, 2007
WL 1891244, at *1 (E.D. Tenn. June 28, 2007)].
Thus, plaintiff asserts that it is
permitted under the Federal Rules of Civil Procedure to plead quantum meruit, as an
alternative theory to its breach of contract claim, and that it will ultimately be entitled to
recovery under only one of the two theories, to be determined by the Court upon further
factual development. Plaintiff submits that PAS-COY’s “stated ground for dismissal is
necessarily predicated upon the finding or admission of a valid and enforceable contract
between the parties, [making] dismissal under Fed. R. Civ. P. 12(b)(6) . . . inappropriate
until at least such a finding or admission has been made.” [Id., p. 3 (citing Son v. Coal
Equity, Inc., 122 F. App’x 797, 801 (6th Cir. 2004) (reversing the dismissal of an
alternate quantum meruit claim as premature because a finding on the contract claim had
not yet been made)]. Plaintiff argues that, if the Court were to grant the partial motion to
dismiss, PAS-COY could then deny the validity or enforceability of the contract and, if
successful, would leave plaintiff without an avenue of recovery. See Son, 122 F. App’x
at 80.
PAS-COY replies that both plaintiff and PAS-COY have already conceded the
validity of the contracts governing the relationship between the two, meaning that the
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quantum meruit claim must be dismissed, as there is no dispute as to the existence and
enforceability of the contracts in question. PAS-COY additionally argues that plaintiff
did not properly plead the alternative claim, as it did not specifically clarify in the
complaint that the quantum meruit claim was plead “in the alternative.”
II.
Analysis
Federal Rule of Civil Procedure 8(a)(2) sets out a liberal pleading standard, Smith
v. City of Salem, 378 F.3d 566, 576 n.1 (6th Cir. 2004), requiring only “‘a short and plain
statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the
[opposing party] fair notice of what the . . . claim is and the grounds upon which it
rests,’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)). Detailed factual allegations are not required, but a party’s
“obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than
labels and conclusions.” Twombly, 550 U.S. at 555. “[A] formulaic recitation of the
elements of a cause of action will not do,” nor will “an unadorned, the-defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
In deciding a Rule 12(b)(6) motion to dismiss, a court must construe the complaint
in the light most favorable to the plaintiff, accept all factual allegations as true, draw all
reasonable inferences in favor of the plaintiff, and determine whether the complaint
contains “enough facts to state a claim to relief that is plausible on its face.” Twombly,
550 U.S. at 570; Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citation
omitted). “A claim has facial plausibility when the plaintiff pleads factual content that
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allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. “Determining whether a complaint states a
plausible claim for relief will [ultimately] . . . be a context-specific task that requires th[is
Court] to draw on its judicial experience and common sense.” Id. at 679.
Upon review of the complaint and claims at issue, as well as the relevant law, the
Court finds that it would be premature to dismiss plaintiff’s quantum meruit claim at this
point. As the Sixth Circuit determined in Son, while PAS-COY has admitted in its
answer that a valid contract exists, such that PAS-COY would likely be judicially
estopped from later arguing that there is no contractual relationship, “[t]he course of
litigation . . . is never certain, and there is no guarantee that [PAS-COY] might not
attempt to repudiate the concession [later in the suit].” 122 F. App’x at 802. Moreover,
Rule 8(d) of the Federal Rules of Civil Procedure allows a party to “state as many
separate claims or defenses as it has, regardless of consistency[,]” and to “set out 2 or
more statements of a claim or defense alternatively or hypothetically, either in a single
count or defense or in separate ones.” Fed. R. Civ. P. 8(d)(2), (3).
Accordingly, while plaintiff may not obtain double recovery for the same
violation, and thus would likely be entitled to recover only on either the breach of
contract claim or the quantum meruit theory, allowing both claims to proceed at this point
adequately protects plaintiff’s rights. See Son, 122 F. App’x at 802.
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III.
Conclusion
For the reasons explained above, the Court hereby DENIES Defendant Pas-Coy,
LLC’s Motion for Partial Dismissal [Doc. 7].
IT IS SO ORDERED.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
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