Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Yor Wic Construction Co. Inc. v. Engineering Design Technologies Inc.

United States District Court, W.D. Louisiana, Shreveport Division

March 28, 2019





         Before the Court is Third-Party Defendant Fidelity and Deposit Company of Maryland's (“F&D”) Motion to Dismiss[1] pursuant to Federal Rule of Civil Procedure 12(b)(6). See Record Document 59. Third-Party Plaintiff Engineering Design Technologies, Inc. (“EDT”) opposes the motion. See Record Document 67. F&D seeks dismissal of EDT's claims for detrimental reliance and subcontract breach. For the reasons set forth below, F&D's motion is hereby GRANTED.

         I. BACKGROUND

         This case concerns the rights and obligations of multiple parties under a subcontract (the “Subcontract”) executed by EDT, as general contractor, and Yor-Wic Construction Co., Inc. (“Yor-Wic”), as subcontractor. See Record Document 46 at 10. In addition, F&D, as surety, issued a Subcontract Performance Bond (the “Bond”) on behalf of Yor-Wic, as principal, and EDT, as obligee. See Record Document 59-1 at 1-2.

         On January 3, 2017, Yor-Wic filed 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 at 1. This suit was initiated by Yor-Wic after 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. 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 2.

         The 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. Yor-Wic alleged that, prior to the execution of the Subcontract, it advised EDT that Yor-Wic's EMR exceeded the maximum rate permitted by the Prime Contract. See id. at 3. 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.

         In its original Petition, Yor-Wic contended 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. Because of the failure of the suspensive condition, Yor-Wic sought a judgment declaring the Subcontract invalid, void, null, unenforceable, extinguished, and/or without cause or consent. See id. at 4. In addition, Yor-Wic sought the same declaration as to the payment and performance bonds that secured performance of the Subcontract. See id.

         On February 1, 2017, EDT removed the case to federal court on the basis of diversity jurisdiction pursuant to 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 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 id. at 34. 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 non-compliance with the EMR rating. See Record Document 13; Record Document 30-1 at 7; Record Document 32.

         On July 11, 2018, this Court issued a Memorandum Ruling granting in part and denying in part a Partial Motion for Judgment on the Pleadings filed by EDT, which dismissed all of Yor-Wic's claims except for its subjective novation claim. See Record Document 73 at 16. On March 2, 2018, EDT filed a Second Amended Answer and Counterclaim against Yor-Wic and a Third-Party Demand (the “Third-Party Complaint”) against F&D and United Fire and Casualty Company, Yor-Wic's general liability insurer. See Record Document 46; Record Document 59-1 at 2. In the Third-Party Complaint, EDT asserts several claims including, inter alia, that Yor-Wic and F&D are jointly, severally, and solidarily liable for EDT's damages under its claims for “Contract Default” and “Subcontract Default.” See Record Document 46 at 19-20. Additionally, EDT asserts a claim for “Detrimental Reliance” for EDT's reliance on alleged representations made by Yor-Wic concerning Yor-Wic's EMR and ability to complete performance of the Subcontract. See id. at 20. On May 8, 2018, F&D filed the instant Motion to Dismiss, seeking dismissal of EDT's claims for detrimental reliance and subcontract breach asserted against it in the Third-Party Complaint. See Record Document 59.


         A. Pleading and 12(b)(6) Motion to Dismiss Standards

         Rule 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 and its progeny. 550 U.S. 544, 127 S.Ct. 1955 (2007). 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) (citation omitted).

         Federal Rule of Civil Procedure 12(b)(6) allows parties to seek dismissal of a party's pleading for failure to state a claim upon which relief may be granted. In deciding a Rule 12(b)(6) motion to dismiss, a court generally may not “go outside the pleadings.” Colle v. Brazos Cty., Tex., 981 F.2d 237, 243 (5th Cir. 1993). However, a court may rely upon “documents incorporated into the complaint by reference and matters of which a court may take judicial notice” in deciding a motion to dismiss. Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008).[2] Additionally, courts must accept all factual allegations in the complaint as true. See Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949. However, courts do not have to accept legal conclusions as facts. See id. A court does not evaluate a plaintiff's likelihood for success, but instead determines whether a plaintiff has pleaded a legally cognizable claim. See U.S. ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004). Courts considering a motion to dismiss under Rule 12(b)(6) 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, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.