Crystal Steel Fabricators, Inc. v. AMEC Foster Wheeler Programs, Inc.
| Decision Date | 01 June 2017 |
| Docket Number | CIVIL ACTION FILE NO. 1:16-CV-3284-MHC |
| Citation | 349 F.Supp.3d 1364 |
| Parties | CRYSTAL STEEL FABRICATORS, INC. and Memco, Inc., Plaintiffs, v. AMEC FOSTER WHEELER PROGRAMS, INC., Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
J. Ben Shapiro, Jr., Baker, Matthew James Leonard, Donelson, Bearman, Caldwell & Berkowitz, PC, Atlanta, GA, James Patrick Carney, Joseph A. McManus, Jr., Thomas B. Carr, McManus & Felsen LLP, Washington, DC, for Plaintiff.
Chad V. Theriot, William Emery Underwood, Jones Walker, LLP, Atlanta, GA, for Defendant.
This case comes before the Court on Defendant AMEC Foster Wheeler Programs, Inc.'s ("AMEC") Motion to Dismiss [Doc. 7]. For the reasons explained below, AMEC's motion is DENIED.
In June 2015, the United States Army Corps of Engineers issued a solicitation for a construction project in Poland (the "Project"). Compl. ¶ 6. Hoping to put together a proposal for the Project, AMEC asked subcontractors Crystal Steel Fabricators, Inc. and Memco, Inc. (collectively, "Plaintiffs") to submit proposals for supplying and erecting the Project's structural steel work. Id. ¶¶ 7-9. Plaintiffs agreed, and in September 2015, the parties entered into a contract—titled the "Teaming Agreement"—concerning the joint preparation and submission of a proposal for the Project. Id. ¶¶ 9-11; see Teaming Agreement, attached as Ex. A to Compl. [Doc. 1-1] ("Teaming Agreement").
According to the terms of the Teaming Agreement, Plaintiffs promised (1) to support AMEC's proposal for the structural steel work described in its statement of work, (2) to support only AMEC in its efforts to submit a successful proposal, and (3) to give up their rights to support other bidders for the Project as well as their rights to independently bid for the Project. Compl. ¶ 12; Teaming Agreement § I.C, II. In exchange, AMEC promised that, if awarded a contract, it would use its best efforts to negotiate in good faith with Plaintiffs to enter a subcontract for the Project's structural steel work. Compl. ¶ 12; Teaming Agreement § I.D, IV. In relevant part, the Teaming Agreement provided:
Plaintiffs allege that, although they fully performed their duties under the Teaming Agreement—and although AMEC relied on their proposal in successfully obtaining a contract for the Project—AMEC subsequently "failed to use any efforts" to negotiate in good faith with Plaintiffs to enter into a subcontract for the structural steel work and instead entered into a contract with another subcontractor. Compl. ¶¶ 14-20. Plaintiffs further allege that they incurred direct and indirect expenses and costs of at least $150,000.00 "in preparing and submitting to AMEC all appropriate materials, including price proposals, pertinent to the work assigned to ‘Subcontractor’ described in the Statement of Work." Id. ¶¶ 21, 56.
Plaintiffs now bring claims against AMEC for breach of contract (Count One), promissory estoppel (Count Two), unjust enrichment (Count Three), and quantum meruit (Count Four).
Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Under Federal Rule of Civil Procedure 12(b)(6), a claim will be dismissed for failure to state a claim upon which relief can be granted if it does not plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The Supreme Court has explained this standard as follows:
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. 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.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citation omitted). Thus, a claim will survive a motion to dismiss only if the factual allegations in the pleading are "enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955.
At the motion to dismiss stage, the court accepts all the well-pleaded facts in the plaintiff's complaint as true, as well as all reasonable inferences drawn from those facts. McGinley v. Houston, 361 F.3d 1328, 1330 (11th Cir. 2004) ; Lotierzo v. Woman's World Med. Ctr., Inc., 278 F.3d 1180, 1182 (11th Cir. 2002). Not only must the court accept the well-pleaded allegations as true, they must be construed in the light most favorable to the pleader. Powell v. Thomas, 643 F.3d 1300, 1302 (11th Cir. 2011). But the court need not accept legal conclusions, nor must it accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Thus, evaluation of a motion to dismiss requires the court to assume the veracity of well-pleaded factual allegations and "determine whether they plausibly give rise to an entitlement to relief." Id. at 679, 129 S.Ct. 1937. "A Rule 12(b)(6) dismissal on statute of limitations grounds is appropriate only if it is apparent from the face of the complaint that the claim is time-barred." Bhd. of Locomotive Eng'rs & Trainmen Gen. Comm. of Adjustment CSX Transp. N. Lines v. CSX Transp., Inc., 522 F.3d 1190, 1194 (11th Cir. 2008) (internal quotations and citation omitted).
As explained above, pursuant to the Teaming Agreement, Plaintiffs promised (1) to support AMEC's proposal for the structural steel work described in its statement of work, (2) to support only AMEC in its efforts to submit a successful proposal, and (3) to give up their rights to support other bidders for the Project as well as their rights to independently bid for the Project. Compl. ¶ 12; Teaming Agreement §§ I.C, II. In exchange, AMEC promised that, if awarded a contract for the Project, it would use its best efforts to negotiate in good faith with Plaintiffs over the subcontract for structural steel work on the Project. Teaming Agreement § I.D. However, AMEC now argues that, "by [its] very terms," the Teaming Agreement is an unenforceable "agreement to agree" that fails to include the essential elements of a contract under Georgia law. See Def.'s Mem. of Law in Supp. of its Mot. to Dismiss [Doc. 7-1] ("Def.'s Mem.") at 5.
The essential elements of a contract under Georgia law are: (1) parties able to contract; (2) consideration; (3) a subject matter upon which the contract can operate; and (4) the assent of the parties to the terms of the contract. O.C.G.A. § 13-3-1 ; TranSouth Fin. Corp. v. Rooks, 269 Ga. App. 321, 323, 604 S.E.2d 562 (2004). Generally, a so-called "agreement to agree" is unenforceable in Georgia where the parties have not assented to the "essential" terms of the contract. See Kreimer v. Kreimer, 274 Ga. 359 363, 552 S.E.2d 826 (2001) () (footnote and citation omitted). However, no Georgia court has directly addressed the issue of whether so-called "contracts to negotiate"1 make up a distinct category of enforceable contracts distinguishable from agreements to agree.2 See St. Joseph Hosp., Augusta, Georgia, Inc. v. Health Mgmt. Assocs., Inc., No. CV 107-104, 2011 WL 1225577, at *14 (S.D. Ga. Mar. 30, 2011), aff'd, 705 F.3d 1289 (11th Cir. 2013) ()." As a federal court sitting in diversity, this court must apply the law as declared by Georgia's highest court. Erie R. R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Therefore, in light of Georgia law's silence on the question of whether a contract to negotiate may be a binding contract, the Court must "determine the issues of state law as [it] believes the Georgia Supreme Court world." CSX Transp., Inc. v. Trism Specialized Carriers, Inc., 182 F.3d 788, 790 (11th Cir. 1999).
The modern trend among courts has been to carve out an exception to the rule against enforcing "agreements to agree" for so-called "contracts to negotiate" like the Teaming Agreement. Although the Eleventh Circuit has yet to address the issue, ...
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