United States for the Use and Benefit of Master Masonry LLC v. Travelers Casualty and Surety Company of America et al
ORDER DENYING 26 DEFENDANT GREENLANDS MOTION TO DISMISS. Signed by Chief Judge Gina M. Groh on 12/7/16. (njz)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
UNITED STATES FOR THE USE AND
BENEFIT OF MASTER MASONRY, LLC,
a West Virginia limited liability company,
CIVIL ACTION NO.: 3:16-CV-50
TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA, a Connecticut corporation,
GREENLAND ENTERPRISES, INC.,
a Virginia corporation, and
FIRST COLONIAL BUILDERS, INC.,
a Virginia corporation,
ORDER DENYING DEFENDANT GREENLAND’S MOTION TO DISMISS
Currently pending before the Court is Defendant Greenland Enterprises, Inc.’s
Motion to Dismiss [ECF No. 26], filed on September 26, 2016. For the following reasons,
the Court DENIES the motion.
This case arises out of an alleged failure to pay pursuant to a sub-subcontract
between First Colonial Builders, Inc. (“First Colonial”), and the Plaintiff. In early 2014,
Greenland Enterprises, Inc. (“Greenland”), contracted with the United States Department
of Veterans Affairs to complete a federal boiler plant upgrade project (“the project”). On
January 2, 2014, Greenland executed a Miller Act payment bond1 with Travelers Casualty
The Miller Act, 40 U.S.C. §§ 3131-3134, requires contractors to post bond on any government construction
contract exceeding $100,000.00. 40 U.S.C. § 3131(b)(2).
and Surety Company of America (“Travelers”) in the amount of $7,343,489.00.
Greenland then entered into a subcontract with First Colonial to provide labor, materials,
equipment and other services required to complete the project. Thereafter, on January
7, 2015, First Colonial entered into a sub-subcontract with the Plaintiff to perform masonry
work and construction of a boiler plant control room, which was required to complete the
project. When the Plaintiff completed its work on the sub-subcontract, First Colonial
refused to pay. On July 9, 2015, the Plaintiff notified Greenland of First Colonial’s failure
to pay the $23,269.53 outstanding balance. The Plaintiff also submitted a claim to
Travelers for payment under the bond, but it was denied.
Based on the aforementioned, on April 18, 2016, the Plaintiff filed a complaint with
this Court alleging breach of contract against First Colonial, quantum meruit against First
Colonial and Greenland and a Miller Act violation against Travelers. On September 26,
2016, Greenland filed its motion to dismiss. The Plaintiff filed its response on October
10, 2016, and one week later Greenland filed its reply. This matter is now ripe for
II. Standard of Review
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a defendant to
challenge the sufficiency of a complaint by moving to dismiss it for failing “to state a claim
upon which relief can be granted.” When reviewing a 12(b)(6) motion, the Court must
assume all of the allegations contained within the complaint to be true, resolve all doubts
and inferences in favor of the plaintiff and view the allegations in a light most favorable to
the plaintiff. Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999). If a
complaint fails to allege “enough facts to state a claim to relief that is plausible on its face,”
it must be dismissed. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Even though
“detailed factual allegations” are not required, a complaint must offer “more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (internal quotations and citation omitted). For example, a complaint that
provides “labels and conclusions or a formulaic recitation of the elements of a cause of
action will not do.” Id. (internal quotations and citation omitted). Likewise, a complaint
that tenders only “naked assertion[s] devoid of further factual enhancement” does not
suffice. Id. (alteration in original) (internal quotations and citation omitted). A plaintiff is
required to articulate facts that, when accepted as true, “show” he is plausibly entitled to
relief. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (citing Iqbal, 556 U.S. at
678). In reviewing a Rule 12(b)(6) motion, courts may consider facts derived from sources
beyond the four corners of the complaint, including documents attached to the complaint
and the motion to dismiss, “so long as they are integral to the complaint and authentic.”
Philips v. Pitt Cty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
Greenland argues that the express contractual agreement between the Plaintiff
and First Colonial Builders precludes the Plaintiff’s quantum meruit claim against it. In its
response, the Plaintiff contends that it is disputed whether the work it performed on the
project was within or outside the scope of the sub-subcontract with First Colonial. The
Plaintiff contends that if the work it performed is determined to be outside the scope of
the sub-subcontract with First Colonial, then a viable claim of quantum meruit exists
against Greenland based upon unjust enrichment. The Plaintiff requests, pursuant to
Rule 8(a)(3) of the Federal Rules of Civil Procedure, that it be permitted to plead this
alternative theory of relief until it is determined whether the work performed was within or
outside the scope of the sub-subcontract.
In actions under the Miller Act, unless there is a conflict between federal and state
law, state substantive law applies. United States ex rel. Coastal Steel Erectors, Inc. v.
Algernon Blair, Inc., 479 F.2d 638, 640 n.2 (4th Cir. 1973). Under West Virginia law, the
theory of quantum meruit “is based on an implied contract,” which “cannot arise, as
against one benefited by work performed, when such work was done under a special
contract with other persons.” Rosenbaum v. Price Constr. Co., 184 S.E. 261, 263-64 (W.
Va. 1936) (internal quotations and citation omitted). Simply put, quantum meruit is
inapplicable where an express contract covering the issue exists. See Ohio Valley Health
Servs. & Educ. Corp. v. Riley, 149 F. Supp. 3d 709, 720-21 (N.D. W. Va. 2015) (“[Q]uasicontract claims, like unjust enrichment or quantum meruit, are unavailable when an
express agreement exists because such claims only exist in the absence of an
agreement.” (emphasis in original)); Fed. Sav. & Loan Ins. Corp. v. Quality Hotels and
Resorts, Inc., 928 F.2d 399, at *4 (4th Cir. 1991) (unpublished table decision).
Here, First Colonial denies that the Plaintiff performed work under their subsubcontract.2 The Plaintiff contends that if this is true, then it performed work that “was
outside the scope of the express contract,” and thus the rule announced in Rosenbaum
would not apply to prohibit its quantum meruit claim. In other words, the Plaintiff maintains
that any work done by it outside of the express sub-subcontract is considered work
performed “in the absence of an agreement,” Ohio Valley Health, 149 F. Supp. 3d at 721,
which is precisely the circumstance where quantum meruit applies, see United States ex
In its answer, First Colonial “denies that Master Masonry LLC did work pursuant to their subcontract
agreement.” ECF No. 12 at 5.
rel. Kogok Corp. v. Travelers Cas. & Sur. Co. of Am., Civil Action No. 1:13CV240, 2015
WL 5634607, at *11 (N.D. W. Va. Sept. 24, 2015) (collecting cases). The Plaintiff avers
that its quantum meruit claim is pled in the alternative; that is, the quantum meruit claim
exists only insofar as the Plaintiff provided work on the project that did not arise under the
sub-subcontract with First Colonial. Insofar as the Plaintiff provided work on the project
that arose under the sub-subcontract, its claim for breach of contract—not quantum
Under federal law, a plaintiff is permitted to plead quantum meruit as an alternative
to contract recovery. See FMW/MJH at 2604 Hillsborough, LLC v. WSA Constr., LLC,
No. 3:13-CV-703-GCM, 2014 WL 6476187, at *2 (W.D.N.C. Nov. 19, 2014) (“[A] party
may plead breach of contract and unjust enrichment in the alternative.” (internal
quotations and citation omitted)); United States ex rel. All State Constr., Inc. v. SEI Grp.,
Inc., Civil Action No. DKC 14-0131, 2014 WL 3571980, at *3 (D. Md. July 18, 2014)
(“While [the plaintiff] may not recover under both breach of contract and quantum meruit,
it is entitled to plead these theories in the alternative.”); Ford v. Torres, No. 1:08cv1153,
2009 WL 537563, at *4 (E.D. Va. Mar. 3, 2009) (“Even though Plaintiffs will not be able
to recover under both contract and quasi-contract doctrines . . . they are not barred from
pleading alternative theories of recovery where the existence of a contract concerning the
subject matter is in dispute.” (internal quotations and citations omitted)). Accordingly,
because the Plaintiff’s quantum meruit claim is pled in the alternative, it may remain.
Upon consideration, the Court ORDERS that Defendant Greenland’s Motion to
Dismiss [ECF No. 26] is DENIED.
The Clerk is DIRECTED to transmit copies of this Order to all counsel of record
DATED: December 7, 2016
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