Astar Abatement, Inc. v. Cincinnati City Sch. Dist. Bd. of Educ.
| Decision Date | 14 February 2012 |
| Docket Number | Case No. 1:11-cv-587 |
| Parties | Astar Abatement, Inc., Plaintiff, v. Cincinnati City School District Board of Education, et al. Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
This matter is before the Court on Defendants' Motion to Dismiss for Failure to State a Claim (doc. 5). Plaintiff Astar Abatement, Inc. ("Astar") has sued Defendants Cincinnati School District Board of Education ("CPS") and Pinnacle Environmental Consultants, Inc. ("Pinnacle") to recover payment and damages arising from asbestos abatement services it provided for CPS. Astar asserts breach of contract and unjust enrichment claims against CPS and a negligence claim against Pinnacle. Both Defendants have moved to dismiss the claims against them pursuant to Rule 12(b)(6) of the Federal Civil Rules of Procedure.
The allegations stated in Astar's Complaint (doc. 1) are taken as true for purposes of the Motion to Dismiss. The key allegations can be briefly summarized here. Additional allegations relevant to particular claims are stated in the Analysis section below.
Prior to August 26, 2010 CPS solicited bids for asbestos abatement work to be performed at the Sayler Park School in Cincinnati, Ohio. (Doc. 1 at 2.) Upon information and belief, Pinnacle designed and prepared for bid the asbestos abatement work to be performed.(Id.) Pinnacle agreed to design, prepare, administer and oversee the abatement work, to inspect and approve the work, and to recommend payments and compensation. (Id.) Pinnacle served as the project engineer and CPS's representative at the project. (Id. at 7.)
Astar bid to perform asbestos work at the Sayler Park project and was awarded the bid. (Id. at 1-2.) On September 20, 2010, Astar signed a written contract which included a standard "Contract Form" prepared by the State of Ohio/Ohio School Facilities Commission and a standard "General Conditions" form (collectively, "the Contract"). (Doc. 8-1.)1 During the course of its performance at the Sayler Park project, Astar encountered differing site conditions that resulted in substantial extra work and additional costs for Astar. (Doc. 1 at 3.) Astar also incurred additional costs when CPS and Pinnacle required it to utilize a different method of asbestos disposal than it had intended to use. (Id. at 4.) Astar performed its obligations under the Contract, including providing notice to CPS and Pinnacle of items that resulted in additional work, delays, or additional costs. (Id.) Defendants refused to execute change orders or to pay for Astar's additional work performed and costs incurred. (Id. at 4-8.)
On August 4, 2011, Astar filed the instant action against Defendants CPS and Pinnacle. Defendants filed the pending Motion to Dismiss on November 14, 2011. The Motion is fully briefed and ripe for adjudication.
Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A district court "must read all well-pleaded allegations of the complaint as true." Weiner v. Klaisand Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997). However, this tenet is inapplicable to legal conclusions, or legal conclusions couched as factual allegations, which are not entitled to an assumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949-50 (2009).
To withstand a dismissal motion, a complaint "does not need detailed factual allegations," but it must contain "more than labels and conclusions [or] a formulaic recitation of the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[T]he complaint must contain either direct or inferential allegations respecting all material elements to sustain a recovery under some viable legal theory." Harvard v. Wayne Cty., 436 F. App'x 451, 457 (6th Cir. 2011) (). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.2 The Court does not require "heightened fact pleading of specifics, but only enough facts to state a claim for relief that is plausible on its face." Id. at 570. "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, 129 S. Ct. at 1949.
In Count I of the Complaint, Astar alleges that CPS breached the Contract. Defendants seek to dismiss this claim on the basis that Astar has failed to state a claim upon which relief can be granted. Defendants generally assert that Astar did not allege sufficient facts to meet thestandards set forth in Iqbal and Twombly that the right to relief be raised above a speculative level. "A breach of contract claim in Ohio has four elements: (1) the existence of a contract; (2) the plaintiff's performance; (3) the defendant's breach; and (4) the existence of damages." Veracity Group, Inc. v. Cooper-Atkins Corp., Inc. No. 1:11-cv-526, 2012 WL 203415, at *6 (S.D. Ohio Jan. 24, 2012) (citing Pavlovich v. Nat'l City Bank, 435 F.3d 560, 565 (6th Cir. 2006) ( Ohio law)). "To survive a motion to dismiss a plaintiff need not describe all the details of the alleged breach, but must plead sufficient facts to show that he is entitled to relief." Robins v. Global Fitness Holdings, LLC, No. 1:11-cv-1373, 2012 WL 163031, at *7 (N.D. Ohio Jan. 18, 2012).
Astar has pleaded facts, not mere conclusory allegations, as to each element. First, Astar pleaded that it was awarded the Contract for asbestos abatement services at the Sayler Park School following a bidding process. (Doc. 1 at 2-3.) Astar pleaded that the Contract contained specific provisions which shifted the risk of additional costs created by "differing site conditions" to CPS as the project owner. (Id. at 3.) Second, Astar pleaded that it fulfilled its obligations under the Contract, despite the fact that it allegedly encountered delays and incurred additional costs as a result of "differing site conditions" and Defendants' insistence on more costly methods. (Id. at 3-4.) Third, Astar pleaded that CPS breached the Contract in multiple ways, including by requiring Astar to utilize a more costly method to dispose of asbestos, refusing to execute change orders and pay for additional work and increased costs, and failing to pay for work performed pursuant to the contract. (Id.) Fourth, Astar pleaded that it incurred costs as result of CPS's breach, including costs associated with performing additional work,costs resulting from delays and increased overhead, and costs associated with having to change its methods, and lost profits and business opportunities. (Id. at 4-5.)
CPS argues that these allegations are insufficient because Astar did not specifically plead that it satisfied each express prerequisite in the contract to recover payment for the work performed. For one example, the Contract required Astar to stop work and provide written notice to CPS if it encountered differing site conditions. (Contract General Conditions ¶ 7.5.2., Doc. 8-1 at 14.) CPS faults Astar for not specifically pleading that it stopped work and provided written notice. Rule 8 of the Federal Rules of Civil Procedure does not require such specificity, even in the age of Iqbal and Twombly. Astar is "not required under Rule 8 to allege each specific fact that supports their claims." Bishop v. Children's Center for Dev. Enrichment, No. 2:08-cv-766, 2011 WL 5506105, at *13 (S.D. Ohio Nov. 10, 2011). The relevant issue is not whether Astar could have included additional factual allegations, but rather the sufficiency of the factual allegations which were included. See DSW, Inc. v. Zina Eva, Inc., No. 2:11-cv-0036, 2011 WL 1336569, at *3 (S.D. Ohio Apr. 6, 2011).
Astar pleaded that "[i]n accord with its contractual obligations, Astar notified both Pinnacle and [CPS] of each and every item which resulted in extra or additional work, delays, disruption, or additional costs." (Doc. 1 at 4.) It further pleaded that it "performed each and every obligation required under the Contract." (Id.) The Complaint allegations, taken as a whole, are sufficient to give CPS "fair notice of [Astar's] breach of contract claim and the grounds upon which it rests." See Bishop, 2011 WL 5506105, at *13. CPS's arguments to the contrary, that Astar did not meet the contractual notice requirements, can be addressed more properly at summary judgment.
CPS makes two other arguments that bear discussion. First, CPS asserts that the claim should be dismissed because Astar failed to plead that it complied with the dispute resolution process set forth in Article 8 of the General Conditions to the Contract. This Article 8 argument is akin to raising the affirmative defense of failure to exhaust administrative remedies. See Cent. Allied Ents., Inc. v. Adjutant Gen.'s Dept., No. 10AP-701, 2011 WL 4477250, at *9 (Ohio App. Sept. 27, 2011) (); see also Jones v. Bock, 549 U.S. 199, 211-12 (2007) (); Dworning v. Euclid, 119 Ohio St. 3d 83, 86, 892 N.E.2d 420, 423 (2008) (same). In the absence of controlling authority to the contrary, this Court will not dismiss this breach of contract claim pursuant to Rule 12(b)(6) based on an argument that Astar had to anticipate and plead facts sufficient to defeat an affirmative defense.3
Next, CPS argues that the State of Ohio, and not CPS, is the true party subject to the Contract. The Contract states in the preamble as follows:
THE CONTRACT, evidenced by this Contract Form, is made and entered into by and between: ASTAR ABATEMENT, INC. . . . (the "...
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