United States District Court, W.D. Louisiana, Shreveport Division
YOR-WIC CONSTRUCTION CO., INC.
ENGINEERING DESIGN TECHNOLOGIES, INC.
HORNSBY MAGISTRATE JUDGE.
MAURICE HICKS, JR., CHIEF JUDGE.
the Court is Plaintiff, Yor-Wic Construction Company, Inc.,
(“Yor-Wic”) seeking a declaration of rights
pursuant to La. Code Civ. Proc. art. 1871 with regard to its
subcontract with Defendant, Engineering Design Technologies,
Inc. (“EDT”). More specifically, Yor-Wic is
requesting this Court find the subcontract invalid, null,
unenforceable, extinguished and/or without cause or consent.
See Record Document 1-1 at p. 3, ¶¶ 14-17,
State Court Petition. EDT filed a Partial Motion to Dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6).
See Record Document 30. However, the present Motion
is more appropriately classified as a Partial Motion for
Judgment on the Pleadings pursuant to Federal Rule of Civil
Procedure 12(c), which will be discussed further
infra. The Court having considered EDT's Partial
Motion for Judgment on the Pleadings (Record Document 30),
the Motion is GRANTED IN PART AND DENIED IN
January 3, 2017, Yor-Wic filed the present lawsuit, styled as
a “Petition for Declaratory Judgment with Reservation
of other Actions and Defenses, ” against EDT in the
26th Judicial District Court for the Parish of Bossier, State
of Louisiana. See Record Document 1-1, Original
Petition. This suit was initiated by Yor-Wic because EDT
defaulted Yor-Wic for non-performance. According to the
original Petition, EDT entered into a contract (the
“prime contract”) with the Naval Facilities
Engineering Command, Southeast (“NAVFAC”) for
construction of drainage improvements at Barksdale Air Force
Base. See id. at p.1, ¶ 3. EDT, in turn,
entered into a March 30, 2016, agreement (the
“subcontract”) with Yor-Wic to perform work under
the prime contract. See id. at p. 2, ¶ 5.
prime contract specified that EDT should not enter into any
contract with a subcontractor who did not comply with the
requisite Experience Modification Rate (“EMR”).
See id. at ¶ 8. Prior to the execution of the
subcontract, Yor-Wic alleges that it advised EDT that its EMR
exceeded the maximum permitted by the prime contract. See
id. at p. 3, ¶ 9. Thereafter, EDT submitted
Yor-Wic's EMR to NAVFAC, but NAVFAC rejected Yor-Wic as a
subcontractor. See id. at ¶ 10. Following the
initial rejection, “EDT submitted a written request for
additional consideration to the [c]ontracting [o]fficer due
to Yor-Wic's failure to meet the specified acceptable EMR
range, but NAVFAC refused to approve Yor-Wic as a
subcontractor to EDT for the [p]roject.” Id.
at ¶ 11.
original Petition, Yor-Wic contends that the subcontract, by
incorporating the EMR, included a suspensive condition that
NAVFAC must approve Yor-Wic as a subcontractor for the
project. See id. at ¶ 12. Because of
the failure of the suspensive condition, Yor-Wic seeks a
judgment declaring the subcontract invalid, void, null,
unenforceable, extinguished, and/or without cause or consent.
See id. at p. 4, ¶ 15. In addition, Yor-Wic
seeks the same declaration as to the payment and performance
bonds that secured performance of the subcontract. See
id. at ¶¶ 16-17.
February 1, 2017, EDT removed the case to federal court on
the basis of diversity jurisdiction, 28 U.S.C. § 1332.
Also on February 1, Yor-Wic filed a Motion for Leave to File
First Amending and Supplemental Petition and Incorporated
Memorandum, and this Court administratively entered
Yor-Wic's First Amending, Supplemental and Restated
Petition on February 19, 2017. See Record Document
9-1 at p. 26. In Yor-Wic's amended Petition, it added
several more claims including equitable estoppel,
impossibility of performance based on a fortuitous event,
subjective novation, nullity based on an alleged False Claims
Act violation and lack of consent due to error as to person.
See Record Document 9-1 at p. 34, ¶¶
20-25, Amended Petition. EDT filed an original and amended
Answer with affirmative defenses and counterclaims against
Yor-Wic based on Yor-Wic's alleged termination for
default due to Yor-Wic's unilateral abandonment of the
work, not due to any EMR rating non-compliance. See
Record Document 13; Record Document 30-1 at p. 7; Record
LAW AND ANALYSIS
noted supra, this Court's subject matter
jurisdiction rests on diversity, and the parties do not
appear to dispute that Louisiana substantive law governs the
issues at bar. Foradori v. Harris, 523 F.3d 477, 486
(5th Cir.2008) (“Under the Erie doctrine, federal
courts sitting in diversity apply state substantive law and
federal procedural law”) (citing Erie R.R. Co. v.
Tompkins, 304 U.S. 64, 78-79, 58 S.Ct. 817, 822 (1938)).
Pleading Standards and the Federal Rule of Civil Procedure
8(a)(2) of the Federal Rules of Civil Procedure governs the
requirements for pleadings that state a claim for relief,
requiring that a pleading contain "a short and plain
statement of the claim showing that the pleader is entitled
to relief." The standard for the adequacy of complaints
under Rule 8(a)(2) is now a "plausibility" standard
found in Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 127 S.Ct. 1955 (2007), and its progeny. Under this
standard, "factual allegations must be enough to raise a
right to relief above the speculative level . . . on the
assumption that all the allegations in the complaint are true
(even if doubtful in fact)." Id. at 555-56, 127
S.Ct. at 1965. If a pleading only contains "labels and
conclusions" and "a formulaic recitation of the
elements of a cause of action," the pleading does not
meet the standards of Rule 8(a)(2). Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009)
EDT's Motion to Dismiss is couched as a Federal Rule of
Civil Procedure 12 (b)(6) Motion to Dismiss for Failure to
State a Claim, it should more properly be construed as a
Partial Motion for Judgment on the Pleadings pursuant to Rule
12(c). Under Rule 12(c) “[a]fter the pleadings are
closed--but early enough not to delay trial--a party may move
for judgment on the pleadings.” Fed.R.Civ.P. 12(c).
After the close of pleadings and prior to the start of trial,
EDT filed its Motion to Dismiss, which due to the timing of
filing, is construed as a Rule 12(c) judgment on the
pleadings. However, this distinction does not affect the
Court's legal analysis because the standards for motions
under Rule 12(b)(6) and Rule 12(c) are identical. See In
re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th
Cir. 2007) (“The standard for deciding such a motion is
the same as that for a Rule 12(b)(6) motion to dismiss for
failure to state a claim.”).
under Rule 12(c), courts must accept all allegations in a
complaint as true. See Iqbal, 556 U.S. at 678, 129
S.Ct. at 1949. However, “the complaint must contain
either direct allegations on every material point necessary
to sustain a recovery . . . or contain allegations from which
an inference may be fairly drawn that evidence on these
material points will be introduced at trial.”
Campbell v. City of San Antonio, 43 F.3d 973, 975
(5th Cir. 1995) (citation omitted). Moreover,
“conclusory allegations or legal conclusions
masquerading as factual conclusions will not suffice to
prevent a motion to dismiss.” Id. at 975
(quoting Fernandez-Montes v. Allied Pilots
Ass'n, 987 F.2d 278, 284 (5th Cir.1993)). Courts
considering a motion to dismiss under Rule 12(c) are only
obligated to allow those complaints that are facially
plausible under the Iqbal and Twombly
standard to survive such a motion. See Iqbal, 556
U.S. at 678-79, 129 S.Ct. at 1949, see also Twombly,
550 U.S. at 555, 127 S.Ct. at 1965.
12(c) is “designed to dispose of cases where material
facts are not in dispute and judgment on the merits can be
rendered by looking to the substance of the pleadings and any
judicially noticed facts.” Great Plains Trust Co.
v. Morgan Stanley Dean Witter & Co., 313 F.3d 305,
312 (5th Cir. 2002) (quoting Hebert Abstract Co., Inc. v.
Touchstone Properties, Ltd., 914 F.2d 74, 76 (5th
Cir.1990)). In other words, judgment on the pleadings
pursuant to Rule 12(c) is appropriate only if “material
facts are not in dispute and questions of law are all that
remain.” Voest-Alpine Trading USA Corp. v. Bank of
China, 142 F.3d 887, 891 (5th Cir.1998); see also
Brittan Communications Int'l Corp. v. Southwestern Bell
Tel. Co., 313 F.3d 899, 904 (5th Cir.2002). Like Rule
12(b)(6) motions to dismiss for failure to state a claim, a
motion to dismiss under Rule 12(c) is disfavored and rarely
granted. See, e.g., Lormand v. U.S.
Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009) (Rule
12(b)(6)); Boyd v. Dallas Indep. Sch. Dist., Civil
Action No. 3:08-0426, 2009 WL 159243, at *1 (N.D. Tex.
Jan.21, 2009) (Rule 12(c)). However, if the complaint does
not meet this standard, it can be dismissed "at the
point of minimum expenditure of time and money by the parties
and the court." Twombly, 550 U.S. at 558, 127
S.Ct. at 1966.
at the Rule 12(c) stage, courts may not go outside the
pleadings. However, in the present action, the Court may
consider the subcontract in assessing the Rule 12(c) Partial
Motion for Judgment on the Pleadings because it was referred
to in Yor-Wic's original and amended Petition, and it is
central to Yor-Wic's claims. See New Orleans City v.
Ambac Assur. Corp., 815 F.3d 196, 200 (5th Cir. 2016)
Federal Declaratory ...