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Louisiana Environmental Concepts, LLC v. BKW, Inc.

United States District Court, E.D. Louisiana

May 7, 2019

LOUISIANA ENVIRONMENTAL CONCEPTS, LLC
v.
BKW, INC.

         SECTION "F"

          ORDER AND REASONS

          MARTIN L. C. FELDMAN, UNITED STATES DISTRICT JUDGE.

         Before the Court is third-party defendant MLU Services, Inc.'s motion to dismiss BKW, Inc.'s third-party complaint. For the reasons that follow, the motion is GRANTED.

         Background

         This litigation is fall-out from a cancelled hurricane disaster recovery project in the U.S. Virgin Islands.

         MLU Services, Inc. provides disaster recovery and relief services, including demolition, right of way clearing, hazardous tree removal, construction, workforce management, logistics, temporary housing, and related services to governments and private citizens. MLU successfully bid on a project to provide hurricane emergency response assistance services to St. John Island after Hurricane Irma; Virgin Islands Waste Management Authority entered into a prime contract with MLU to provide disaster relief services. To fulfill its obligations under the prime contract, MLU subcontracted with WTL Corporation; MLU and WTL memorialized their agreement in a Master Subcontractor Agreement on December 12, 2017, as well as a Task Order, as contemplated by the MSA, signed the next day.

         BKW, Inc. specializes in land clearing, earth moving, underground utilities, erosion control, storm drainage, debris management, and trucking. Effective January 23, 2018, BKW agreed to lease certain equipment to MLU pursuant to a Vehicle/Equipment Lease. BKW, in turn, contracted with Louisiana Environmental Concepts, LLC (LEC), which agreed to lease roll-off boxes on an open account basis.[1] MLU separately contracted with barge operators to transport equipment to St. John.

         No work was completed under the MSA or the Task Order. MLU's participation in the project was cancelled by the U.S. Virgin Islands Waste Management Authority when the barge transporting the equipment took 30 (instead of five) days to arrive to St. John. By then, the U.S. Virgin Islands Waste Management Authority deemed its contract with MLU “expired” and hired a different company to provide disaster relief services.[2]

         On October 4, 2018, Louisiana Environmental Concepts, LLC sued BKW, LLC in state court, alleging that BKW owes $77, 860 under BKW's open account with LEC. LEC alleges that BKW contracted with LEC for the rental of roll-off boxes on an open account basis; between January 1, 2018 and March 10, 2018 LEC leased roll-off boxes to BKW. BKW removed the lawsuit to this Court, invoking the Court's diversity jurisdiction under 28 U.S.C. § 1332. BKW answered LEC's state court petition and filed a third-party complaint against MLU Services, Inc., alleging that: MLU subcontracted with BKW for “services” (including loading, hauling, separation, and unloading) in relation to the “Work” identified in the Master Subcontractor Agreement; BKW sub-contracted with LEC for the rental of roll-off boxes to be used in relation to the Work in the Virgin Islands; BKW caused its and LEC's property, machinery, and materials, including LEC roll-off boxes, to be loaded onto a barge provided by MLU for transport to the Virgin Islands; upon the barge's arrival in the Virgin Islands, MLU informed BKW that it no longer needed BKW's work and refused to allow it to complete the work; MLU did so without first sending written notice of its intention to terminate the contract as required by the Master Subcontractor Agreement at Section 5.2; MLU breached the Task Order and the Master Subcontractor Agreement; and BKW sent two invoices to MLU, neither of which have been paid, thus leaving $227, 554.18 due and owing to BKW “pursuant to the Task Order and Master Subcontractor Agreement.” BKW also seeks indemnification from MLU for any amounts BKW owes to LEC because BKW's sub-contract with LEC was terminated due to MLU's breach of the Task Order and Master Subcontractor Agreement.

         MLU now moves to dismiss the third-party complaint for failure to state a claim upon which relief may be granted.

         I.

         Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. Such a motion is rarely granted because it is viewed with disfavor. See Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982)).

         Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)(citing Fed.R.Civ.P. 8). "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         In considering a Rule 12(b)(6) motion, the Court “accept[s] all well-pleaded facts as true and view[s] all facts in the light most favorable to the plaintiff.” See Thompson v. City of Waco, Texas, 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel. Magee v. Covington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th Cir. 2012)(en banc)). But, in deciding whether dismissal is warranted, the Court will not accept conclusory allegations in the complaint as true. Id. at 502-03 (citing Iqbal, 556 U.S. at 678).

         To survive dismissal, “‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal quotation marks omitted). “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).” Twombly, 550 U.S. at 555 (citations and footnote omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (“The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.”). This is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. “Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. at 678 (internal quotations omitted) (citing Twombly, 550 U.S. at 557). “[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief'”, thus, “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (alteration in original) (citation omitted).

         Finally, “[w]hen reviewing a motion to dismiss, a district court ‘must consider the complaint in its entirety, as well as other sources ordinarily examined when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011)(quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). If the Court considers materials outside of the pleadings, the motion to dismiss must be treated as a motion for summary judgment under Rule 56. See Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004); see also Fed.R.Civ.P. 12(d).

         II.

         A.

         A federal court sitting in diversity applies the substantive law of the forum state; here, Louisiana. See Wisznia Co., Inc. v. General Star Indm. Co., 759 F.3d 446, 448 (5th Cir. 2014).[3] MLU moves to dismiss BKW's third-party claims for breach of contract and indemnity. “The essential elements of a breach of contract claim are (1) the obligor's undertaking an obligation to perform, (2) the obligor failed to perform the obligation (the breach), and (3) the failure to perform resulted in damages to the obligee.” Favrot v. Favrot, 68 So.3d 1099, 1108-09 (La.App. 4 Cir. ...


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