Mcclung-Logan Equip. Co. v. Harbour Constructors Co.

• Decision Date: 16 May 2018
• Docket Number: Civil Action No. ELH-17-2726
• Parties: MCCLUNG-LOGAN EQUIPMENT COMPANY, INC., Plaintiff, v. HARBOUR CONSTRUCTORS CO. et al, Defendants.
• Court: U.S. District Court — District of Maryland

MCCLUNG-LOGAN EQUIPMENT COMPANY, INC., Plaintiff,
v.
HARBOUR CONSTRUCTORS CO. et al, Defendants.

Civil Action No. ELH-17-2726

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

May 16, 2018

MEMORANDUM OPINION

Plaintiff McClung-Logan Equipment Company, Inc. ("McClung") filed suit against Harbour Constructors, Co. ("Harbour") and Cross-Land Harbour, Inc. ("Cross-Land"), alleging claims for breach of contract, unjust enrichment, and quantum meruit. ECF 1 (Complaint). In the Complaint, which is supported by exhibits, McClung seeks damages of $233,147.73, plus interest and costs. Id.

According to McClung, defendants rented construction equipment from plaintiff but failed to make timely payments and are in default. Id. ¶¶ 8, 11. Although plaintiff asserts that defendants made their last payment on April 4, 2011 (id. ¶ 10), this suit was not filed until September 13, 2017. Before this suit was filed, however, the parties were involved in litigation in state court in Virginia, as well as this Court.

Defendants have moved to dismiss the Complaint for failure to state a claim, pursuant to Fed. R. Civ. P. 12(b)(6). ECF 11. The motion is supported by a memorandum of law. ECF 11-1 (collectively, "Motion"). In the Motion, defendants argue that plaintiff's claims are barred by Maryland's three-year statute of limitations. ECF 11-1 at 5-6; see Md. Code (2013 Repl. Vol.,

Page 2

2017 Supp.), § 5-101 of the Courts and Judicial Proceedings Article ("C.J."). Defendants also assert that the Complaint fails to state a claim upon which relief may be granted. ECF 11-1 at 6-14.

Plaintiff opposes the Motion (ECF 12, "Opposition"), and has submitted six additional exhibits. The gravamen of plaintiff's Opposition is that prior proceedings in a Virginia State court and defendant's alleged misdeeds in this Court have equitably tolled the statute of limitations. See ECF 12 at 2-9. Moreover, plaintiff argues that the Complaint is not deficient. Id. at 9-12. Defendant replied. ECF 13 ("Reply").

No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion, without prejudice, and with leave to amend.

I. Legal Standard

A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law "to state a claim upon which relief can be granted."

Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed. R. Civ. P. 8(a)(2). That rule provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendants with "fair notice" of the claims against them and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

Page 3

To survive a motion under Fed. R. Civ. P. 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) ("Our decision in Twombly expounded the pleading standard for 'all civil actions' . . . ." (citation omitted)); see also Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). But, a plaintiff need not include "detailed factual allegations" in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules "do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, Miss., ___ U.S. ___, 135 S. Ct. 346, 346 (2014) (per curiam).

Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action," it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely." Twombly, 550 U.S. at 556 (internal quotations omitted).

In reviewing a Rule 12(b)(6) motion, a court "must accept as true all of the factual allegations contained in the complaint" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. Maryland Transit Admin., 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But,

Page 4

a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). "A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).

In general, courts do not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses" through a Rule 12(b)(6) motion. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). But, "in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6)." Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long Term Disability Plan, 533 F.3d 334, 336 (4th Cir. 2009); see also U.S. ex rel. Oberg v. Penn. Higher Educ. Assistance Agency, 745 F.3d 131, 148 (4th Cir. 2014). However, because Rule 12(b)(6) "is intended [only] to test the legal adequacy of the complaint," Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), "[t]his principle only applies . . . if all facts necessary to the affirmative defense 'clearly appear[ ] on the face of the complaint.'" Goodman, 494 F.3d at 464 (quoting Forst, 4 F.3d at 250) (emphasis added in Goodman).

Under limited circumstances, when resolving a Rule 12(b)(6) motion, a court may consider documents beyond the complaint without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). In particular, a court may properly consider documents that are "explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits."

Page 5

Goines, 822 F.3d at 166 (citations omitted); see also U.S. ex rel. Oberg v. Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999).

However, "before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it." Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998)). Of import here, "[w]hen the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper." Goines, 822 F.3d at 167. Conversely, "where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true." Id.

Plaintiff attached to its Complaint the alleged rental contract with defendants (ECF 1-2) and a statement showing defendants' unpaid balance (ECF 1-3). I consider these exhibits to be incorporated into the Complaint, and I shall therefore consider them, to the extent they are relevant. As indicated, plaintiff attached six other exhibits to its Opposition. These exhibits are not integral to the Complaint, and plaintiff has offered no legal basis for the Court to consider them at this stage of litigation. However, I shall refer to them with regard to this case's procedural history.

Page 6

II. Discussion A.

Defendants argue that plaintiff's suit is barred by the statute of limitations. ECF 11-1 at 1-2. Because this case comes to this Court on the basis of diversity jurisdiction, I must apply the substantive law of the forum state, including its statute of limitations. See Brown v. Am. Broad. Co., Inc., 704 F.2d 1296, 1299 (4th Cir. 1983); see also Coe v. Thermasol, Inc., 785 F.2d 511, 514 n.5 (4th Cir. 1986) (noting that "federal courts sitting in diversity apply the forum state's statute of limitations"). Therefore, I shall apply Maryland law.

Under Maryland law, "[a] civil action shall be filed within three years from the date it accrues unless another provision of the Code provides" otherwise. C.J. § 5-101. Breach...