Pioneer Civil Constr., LLC v. Ingevity Ark., LLC

• Docket Number: Case No. 1:22-cv-1034
• Decision Date: 03 March 2023
• Citation: 659 F.Supp.3d 977
• Parties: PIONEER CIVIL CONSTRUCTION, LLC, Plaintiff v. INGEVITY ARKANSAS, LLC; and Ingevity Corporation, Defendants
• Court: U.S. District Court — Western District of Arkansas

659 F.Supp.3d 977

PIONEER CIVIL CONSTRUCTION, LLC, Plaintiff v. INGEVITY ARKANSAS, LLC; and Ingevity Corporation, Defendants

Case No. 1:22-cv-1034

United States District Court, W.D. Arkansas, El Dorado Division

Signed March 3, 2023

Judy Simmons Henry, Michael A. Thompson, Patrick Collins Hickman, Jr., Wright, Lindsey & Jennings LLP, Little Rock, AR, for Plaintiff.

Dorsey R. Carson, Kathryn Goff, Carson Law Group, PLLC, Jackson, MS, for Defendants.

ORDER

Susan O. Hickey, Chief United States District Judge

Before the Court is Plaintiff's Motion to Dismiss Amended Counterclaim.¹ECF No. 47.Defendants have responded.ECF No. 51.The Court finds the matter ripe for consideration.

I.BACKGROUND

PlaintiffPioneer Civil Construction, LLC("Pioneer") is an Arkansas limited liability company.DefendantIngevity Arkansas, LLC("Ingevity AR") is a Delaware limited liability company registered to do business in Arkansas, and DefendantIngevity Corporation("Ingevity Corp.") is a Delaware corporation with its principal place of business in South Carolina.In the fall of 2021, Pioneer placed a bid to Ingevity AR to perform certain work for construction of an asphalt road within Ingevity AR's facility in Crossett, Arkansas.Pioneer was later selected to build the road.The agreement for the work Pioneer was to perform for Ingevity AR is documented in a Revised Purchase Order #4502392369 ("Purchase Order") dated October 4, 2021.ECFNo. 14-1.The Purchase Order references "Ingevity Terms and Conditions"("Terms and Conditions"), a separate document that puts forth additional requirements of the contract.The parties now dispute whether those Terms and Conditions are included in the contract for Pioneer's construction work at Ingevity AR's facility in Crossett.

Pioneer alleges that Ingevity Corp. ceased to pay invoiced charges for the construction project in November 2021.Pioneer further alleges that it would have completed the project by the end of 2021 absent the delays caused by Ingevity AR.Defendants allege that Pioneer had submitted invoices for work it had not completed.In early January 2022, Ingevity AR terminated its contract with Pioneer for the construction of the asphalt road and barred Pioneer from accessing the Crossett facility.Defendants allege that the termination resulted from Pioneer's failure to adhere to workplace safety requirements and that Pioneer's work on the asphalt road was defective and did not adhere to the construction standards set forth in the contract.Pioneer alleges that these safety standards were not part of the overall contract and were applied retroactively to Pioneer's construction work.

On May 9, 2022, Pioneer filed its first complaint against Defendants in the Circuit Court of Ashley County, Arkansas.ECF No. 3.Pioneer alleged alternative claims of breach of contract, promissory estoppel, unjust enrichment, and interference with business expectancy.Pioneer's original complaint attached the now disputed "Terms and Conditions" document.Id. at p. 18-26.On May 10, 2022, Pioneer sent a cease-and-desist letter to Ingevity AR to prevent it from further deconstruction of the asphalt road Pioneer had built in the Crossett facility.On May 13, 2022, Pioneer filed a Motion for Preliminary Injunction or Temporary Restraining Order(ECFNo. 22-1), seeking to prevent Defendants from any further demolition of the asphalt road, to allow Pioneer to access the remaining road and road materials to gather evidence for its claims, and to require Defendants to preserve any remaining material from the asphalt road.A hearing was held on that motion on May 19, 2022, at which Defendants chose not to participate.At the hearing, the president of Pioneer, Lance Griffin, testified to his understanding that the Terms and Conditions were a part of the contract for constructing the asphalt road.²ECFNo. 21-4, p. 33-35.At the conclusion of the hearing, the State court indicated it would grant Pioneer's request for an injunction so that it could gather evidence necessary for its claims.Id. at p. 43-50.Pioneer later provided that court with an order simply stating that the requested injunction was granted without detailing the specifics of the injunction.ECF No. 2-1, p. 74-75.

On June 13, 2022, Defendants removed the matter to this Court pursuant to 28 U.S.C. § 1332 diversity jurisdiction.³ECF No. 2.Defendants later moved to have the preliminary injunction imposed by the State court reversed or modified.ECF No. 31.The Court granted Defendants' request to modify the injunction after finding that the state court injunction did not meet federal standards.ECF No. 53.The modified injunction entered by the Court placed a time limit on which Pioneer had to access the Crossett facility to obtain whatever evidence it needed for its claims.ECF No. 54.

On July 12, 2022, Pioneer filed its Amended Complaint.ECF No. 14.In its amended complaint, Pioneer alleges that the Terms and Conditions were not properly incorporated into the Purchase Order and overall contract.Id. at p. 2-3.Pioneer brings five claims in the alternate: a claim for breach of contract in which the Purchase Order is the full extent of the contract, a claim for breach of contract in which the Terms and Conditions are determined to be properly incorporated into the contract, a claim for promissory estoppel, a claim for unjust enrichment, and a claim for tortious interference with contract.Id. at p. 10-16.Defendants filed a motion to dismiss Plaintiff's claims(ECF No. 18), which the Court later denied (ECF No. 56).

On July 26, 2022, Defendants filed their first Answer and Counterclaim to Pioneer's Amended Complaint.ECF No. 19.Pioneer filed a motion to dismissDefendants' initial counterclaim in its entirety.ECF No. 31.Defendants subsequently filed an Amended Answer and Counterclaim.ECF No. 43.Defendants' amended answer alleges that Pioneer should never have been awarded the contract to construct the asphalt road because its accumulated safety violations from prior projects made it ineligible to work at Defendants' facility.Id. at p. 29-30.Defendants also allege that Pioneer was awarded the contract despite its safety record and despite not being the lowest bidder because of kickbacks that Lance Griffin offered to one of Defendants' prior employees who was a project manager.Id.Defendants further allege that Pioneer's construction of the asphalt road was beset by multiple failures prior to the contract's termination and that an evaluation of the road afterward indicated that all of Pioneer's work needed to be demolished and replaced.Id. at pg. 31-41.Defendants assert eight claims against Pioneer related to the formation and performance of the contract to construct the asphalt road: breach of contract, negligence, breach of warranty, civil conspiracy, fraudulent inducement, negligent misrepresentation, tortious interference with contract, and unjust enrichment.Id. at p. 41-51.Defendants seek restitution, compensatory damages, punitive damages, attorney's costs and fees, and pre- and post-judgment interest.Id. at p. 52.

On September 13, 2022, Pioneer filed the instant motion to dismissDefendants' counterclaim in its entirety.ECF No. 47.Pioneer argues that every claim fails because they do not meet pleading standards, either generally or for the specific claims alleged, or fail to include necessary parties.ECF No. 48, p. 2-15.Pioneer also argues that nothing alleged in Defendants' counterclaim, even accepted as true, justifies the possibility of punitive damages.Id. at p. 15-16.Defendants responded in opposition, generally arguing that they have sufficiently met the plausibility pleading standard for each of their claims.ECF No. 51.

II.LEGAL STANDARD AND APPLICABLE LAW

A.Motion to Dismiss Standard

A pleading must "contain a short and plain statement of the claim showing that the pleader is entitled to relief."Fed. R. Civ. P. 8(a)(2).This standard "does not require 'detailed factual allegations,' but it demands more that an unadorned, the-defendant-unlawfully-harmed-me accusation."Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009)(quotation omitted).While factual allegations in a complaint are presumed true, unsupported legal conclusions presented as facts are not sufficient to show a pleader is entitled to relief.Seeid.(citations omitted).There must be factual allegations underlying a complaint such that the claim of misconduct is sufficiently plausible on its face and not merely a possibility.Seeid. at 678-79, 129 S.Ct. 1937(citations omitted).Sufficiently supporting a claim "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do."Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007)(citation omitted).Upon motion, a party against whom a claim for relief is sought may assert the defense that the claim is not one upon which relief can be granted.SeeFed. R. Civ. P. 12(b)(6).In evaluating a motion to dismiss pursuant to Rule 12(b)(6), the Court evaluates the complaint in the light most favorable to the non-moving party.Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454(8th Cir.2010)(citations omitted).

B.Applicable Law

The question of which state's law is applicable to the claims in this matter has been presented by the parties in their motions to dismiss.Defendants assert that South Carolina law governs the claims because the Terms and Conditions contained a choice-of-law provision stating as much.Pioneer asserts that the Terms and Conditions were not properly incorporated into the overall contract and that Arkansas law should apply because that is where the contract was formed and all actions pursuant to the contract occurred.The Court previously declined to make a legal determination on whether the Terms and Conditions were incorporated into the contract in evaluating ...