Scott Hutchison Enterprises, Inc. v. Cranberry Pipeline Corporation et al

Filing 30

MEMORANDUM OPINION AND ORDER granting in part 6 MOTION by Cabot Oil & Gas Corporation, Cranberry Pipeline Corporation to Dismiss Complaint with respect to Count Three and denying in part with respect to Counts One, Two and Four; denying 13 MO TION by Cabot Oil & Gas Corporation, Cranberry Pipeline Corporation to Strike 11 Memorandum of Law in Reply to Response; granting 14 MOTION by Scott Hutchison Enterprises, Inc. to File a Surreply. Signed by Judge Robert C. Chambers on 3/11/2016. (cc: attys; any unrepresented parties) (mkw)

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION

SCOTT HUTCHISON ENTERPRISES, INC.,
Plaintiff,
v.

CIVIL ACTION NO. 3:15-13415

CRANBERRY PIPELINE CORPORATION and
CABOT OIL & GAS CORPORATION,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the Court are Defendants’ Motion to Dismiss Complaint (ECF No. 6),
Defendants’ Motion to Strike Memorandum of Law in Reply to Response (ECF No. 13), and
Plaintiff’s Motion to File a Surreply (ECF No. 14). For the reasons set forth below, Defendants’
Motion to Dismiss (ECF No. 6) is GRANTED in part with respect to Count Three and DENIED
in part with respect to Counts One, Two, and Four; Defendants’ Motion to Strike Memorandum
of Law in Reply to Response (ECF No. 13) is DENIED1; and Plaintiff’s Motion to File a Surreply
(ECF No. 14) is GRANTED.
I.

Background

As alleged in Plaintiff’s Complaint, this case involves a gas pipeline, known as the C-1004
pipeline, which is owned and operated by the Defendants. A portion of the C-1004 pipeline
transverses property owned by the Plaintiff, known as the Ridgewood Subdivision. Plaintiff

1

Although, as Defendants point out in their Motion to strike, Plaintiff initially filed a surreply without
seeking leave of the Court pursuant to L. R. Civ. P. 7.1(a)(7), Plaintiff later filed a motion requesting leave
of the Court. Therefore, for reasons appearing to the Court, the Court GRANTS Plaintiff’s Motion for leave
to file its surreply (ECF No. 14) and DENIES Defendants’ Motion to strike Plaintiff’s “Surreply” (ECF No.
13).

acquired the Ridgewood Subdivision from Miracle Investments LLC., on or about April 1, 2013.
Compl., at ¶ 5. Richard G. Dehart, the owner and organizer of Miracle Investments LLC., the
predecessor in interest to the property known as the Ridgewood Subdivision, informed Scott
Hutchison, the Vice President of the Plaintiff, that the C-1004 pipeline existed within the
Ridgewood Subdivision by virtue of permission from Miracle Investments LLC., and its
predecessors in title to the property. Id. at ¶ 6. He also informed Plaintiff that the gas company had
no legal easement or right for the gas line to cross the property. Id. Plaintiff claims that prior to
Plaintiff’s purchase of the Ridgewood Subdivision, Defendants represented to Scott Hutchison that
the pipeline would not affect Plaintiff’s development of the property. Id. at ¶ 7.
After purchasing the property, Plaintiff began improving an existing roadway. Defendants
directed that Plaintiff cease construction of the roadway, representing to Plaintiff that construction
was a threat of serious injury or death due to the location of the C-1004 Pipeline on the property
in relation to the construction. Id. at ¶ 8. Based on the actions of Defendants, in directing Plaintiff
to stop construction prematurely, Plaintiff alleges that slips developed on the property. Id. As a
result of the pipeline interfering with Plaintiff’s development of the property, on or about May 15,
2015, Plaintiff revoked Defendants’ permission to have the pipeline across the property and
requested the pipeline’s immediate removal. Id. at ¶ 9. Since Plaintiff revoked Defendants’
permission to continue to utilize the C-1004 pipeline within the Ridgewood Subdivision,
Defendants have not removed the pipeline. Id. at ¶ 10.
II.

Standard of Review

A. 12(b)(6) Motion to Dismiss
To overcome a motion to dismiss under Rule 12(b)(6), a complaint must be plausible. Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 546 (2007). This standard requires a plaintiff to set forth the

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“grounds” for an “entitle[ment] to relief” that is more than mere “labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (internal quotation
marks and citations omitted). To survive a motion to dismiss, a complaint must contain “sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Facial plausibility exists
when a claim contains “factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Id. (citation omitted).
Accepting the factual allegations in the complaint as true (even when doubtful), the
allegations “must be enough to raise a right to relief above the speculative level . . . .” Id. (citations
omitted). If the allegations in the complaint, assuming their truth, do “not raise a claim of
entitlement to relief, this basic deficiency should . . . . be exposed at the point of minimum
expenditure of time and money by the parties and the court.” Id. at 558 (internal quotation marks
and citations omitted). Finally, “[a]lthough for the purposes of a motion to dismiss we must take
all of the factual allegations in the complaint as true, we ‘are not bound to accept as true a legal
conclusion couched as a factual allegation.’” Id. (quoting Twombly, 550 U.S. at 555).
B. Statute of Limitations Defense
The Supreme Court of Appeals of West Virginia has established a five-step analysis to
determine whether a cause of action has been time-barred:
First, the court should identify, the applicable statute of limitation of each cause of
action. Second, the court (or, if material questions of fact exist, the jury) should
identify when the requisite elements of the cause of action occurred. Third, the
discovery rule should be applied to determine when the statute of limitation began
to run by determining when the plaintiff knew, or by the exercise of reasonable
diligence should have known, of the elements of a possible cause of action . . . .
Fourth, if the plaintiff is not entitled to the benefit of the discovery rule, then
determine whether the defendant fraudulently concealed facts that prevented the
plaintiff from discovering or pursuing the cause of action. Whenever a plaintiff is
able to show that the defendant fraudulently concealed facts which prevented the
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plaintiff from discovering or pursuing the potential cause of action, the statute of
limitation is tolled. And fifth, the court or the jury should determine if the statute
of limitation period was arrested by some other tolling doctrine.
Dunn v. Rockwell, 689 S.E.2d 255, 265 (W. Va. 2009). “Only the first step is purely a question of
law; the resolution of steps two through five will generally involve questions of material fact that
will need to be resolved by the trier of fact.” Id.
Additionally, the “discovery rule” tolls the running of a statute of limitation until a plaintiff
knew or should have known of a claim:
[U]nder the discovery rule the statute of limitations begins to run when the plaintiff
knows, or by the exercise of reasonable diligence, should know (1) that the plaintiff
has been injured, (2) the identity of the entity who owed the plaintiff a duty to act
with due care, and who may have engaged in conduct that breached that duty, and
(3) that the conduct of that entity has a causal relation to the injury.
Gaither v. City Hosp., Inc., 487 S.E.2d 901, Syl. 4 (W. Va. 1997).
III.

Analysis

The Court finds that Plaintiff’s Complaint sufficiently states plausible claims for trespass,
negligence, and unjust enrichment.2 As this stage of litigation, Defendants’ statute of limitation
defenses and arguments on the viability of Plaintiff’s unjust enrichment claim are premature. As
such, Plaintiff’s claim for trespass, negligence, and unjust enrichment survive Defendants’ Motion
to Dismiss.
First, Defendants argue that Plaintiff’s trespass and negligence claims are time-barred.
The parties agree that an action for trespass and negligence in West Virginia must be brought
within the applicable two year statute of limitation period as provided in W. Va. Code § 55-2-12.
Accepting Plaintiff’s allegations as true for purposes of Defendants’ Motion to Dismiss, Plaintiff

Plaintiff “concedes that, as a corporate entity, it cannot sustain the type of harm to support its tort of
outrage claim as set forth in Count Three of Plaintiff’s Complaint.” ECF No. 8, at 2. Therefore, Defendants’
Motion to Dismiss with respect to Count Three is GRANTED.
2

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alleges that Plaintiff’s revocation of permission for Defendants’ continued use of Plaintiff’s land
on May 15, 2015 triggered its trespass claim. ECF No. 8, at 11. As such, because Plaintiff’s
Complaint was filed later in 2015, Plaintiff has presented allegations upon which a reasonable
inference can be drawn that its trespass claim is not time-barred by the applicable two year statute
of limitations. Next, Plaintiff’s negligence claim asserts that Defendants’ wrongful conduct in
instructing Plaintiff to cease excavation work, effectively caused slips which damaged Plaintiff’s
property. ECF No. 8, at 13. Plaintiff alleges that these slips were not discovered on the property
until spring of 2014. Id. Plaintiff filed its Complaint within two years of the alleged development
of the slips (as Plaintiff’s Complaint was filed in 2015). Therefore, again, Plaintiff has presented
facts, at this stage of litigation, sufficient to establish that its negligence claim is not time barred
by the applicable two year statute of limitations.
Finally, Plaintiff’s unjust enrichment claim is also sufficiently pled to proceed. The
elements of unjust enrichment are: “(1) a benefit conferred upon the [defendant], (2) an
appreciation or knowledge by the defendant of such benefit, and (3) the acceptance or retention by
the defendant of the benefit under such circumstances as to make it inequitable for the defendant
to retain the benefit without payment of its value.” Veolia Es Special Servs., Inc. v. Techsol Chem.
Co., No. 3:07-cv-0153, 2007 WL 4255280, at *9 (S.D. W. Va. Nov. 30, 2007). Here, Plaintiff
alleges that Defendants have continued to use the C-1004 pipeline, a portion of which is located
on Plaintiff’s property, even after Plaintiff claims that Defendants’ permission was expressly
revoked. ECF No. 8, at 8. Additionally, Plaintiff claims that “Defendants continue to be conferred
a benefit from the profit derived from the gas being pumped through the pipeline, at the expense
of the Plaintiff’s use of the property, as well as the land damage caused as a result of the negligent
acts of the Defendants.” Id. As discussed supra, to survive a motion to dismiss, a complaint must

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contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Here,
Plaintiff sufficiently pleads all elements of an unjust enrichment claim, and therefore states a claim
to relief that is plausible on its face.
I.

Conclusion

For the foregoing reasons, Defendants’ Motion to Dismiss (ECF No. 6) is GRANTED in
part with respect to Count Three and DENIED in part with respect to Counts One, Two, and
Four; Defendants’ Motion to Strike Memorandum of Law in Reply to Response (ECF No. 13) is
DENIED; and Plaintiff’s Motion to File a Surreply (ECF No. 14) is GRANTED.
The Court DIRECTS the Clerk to send a copy of this written Opinion and Order to counsel
of record and any unrepresented parties.

ENTER:

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March 11, 2016