Robinson Mech. Contractors Inc. v. PTC Grp. Holding Corp.
| Decision Date | 31 March 2016 |
| Docket Number | Case No. 1:15CV77 SNLJ |
| Parties | ROBINSON MECHANICAL CONTRACTORS INC. d/b/a ROBINSON CONSTRUCTION COMPANY, Plaintiff, v. PTC GROUP HOLDING CORP., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the court on defendant's motion to dismiss plaintiff's amended complaint. The motion has been fully briefed and the matter is ripe for disposition. For the following reasons, the motion will be granted in part and denied in part.
The purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim is to test the legal sufficiency of a complaint so as to eliminate those actions "which are fatally flawed in their legal premises and deigned to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity." Young v. City of St. Charles, 244 F.3d 623, 627 (8th Cir. 2001) (citing Neitzke v. Williams, 490 U.S. 319, 326-27 (1989)). A complaint must be dismissed for failure to state a claim if it does not plead enough facts to state a claim to relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 560 (2007). A petitioner need not provide specific facts to support his allegations, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam), but "must include sufficient factual information to provide the grounds on which the claim rests, and to raise a right to relief above a speculative level." Schaaf v. Residential Funding Corp., 517 F .3d 544, 549 (8th Cir. 2008), cert. denied, 129 S.Ct. 222 (2008) (quoting Twombly, 550 U.S. at 555-56 & n. 3).
In ruling on a motion to dismiss, a court must view the allegations of the complaint in the light most favorable to the petitioner. Scheuer v. Rhodes, 416 U.S. 232 (1974); Kottschade v. City of Rochester, 319 F.3d 1038, 1040 (8th Cir. 2003). "To survive a motion to dismiss, a claim must be facially plausible, meaning that the factual content . . . allows the court to draw the reasonable inference that the respondent is liable for the misconduct alleged." Cole v. Homier Dist. Co., Inc., 599 F.3d 856, 861 (8th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). When determining the facial plausibility of a claim, the Court must "accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party." Id. (quoting Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005)).
"In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). To meet Rule 9(b) requirements, a pleading must include "such matters as the time, place and contents of the false representations, as well as the identity of the person making the misrepresentations and what was obtained or given up thereby." Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001). "The special nature of fraud does not necessitate anything other than notice of the claim; it simply necessitates a higher degree of notice, enablingthe defendant to respond specifically, at an early stage of the case, to potentially damaging allegations of immoral and criminal conduct." Id. Furthermore, the overarching principles of notice pleading dictate that a plaintiff does not need to plead fraud "with complete insight before discovery is complete." Gunderson v. ADM Investor Servs., Inc., 230 F.3d 1363 (table), 2000 WL 1154423, at *3 (8th Cir. 2000) (quoting Maldonado v. Dominguez, 137 F.3d 1, 9 (1st Cir. 1998)). As a result, Rule 9(b) does not require a plaintiff to set out specific facts concerning matters that are likely solely known by the defendant. See, e.g., Abels, 259 F.3d at 921. "Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Id. at 920.
Plaintiff filed this action alleging claims for breach of contract, breach of duty of good faith and fair dealing, fraudulent misrepresentation, negligent misrepresentation, promissory estoppel, and quantum meruit. In response, defendant filed a motion to dismiss the complaint for failure to join a required party under Federal Rule of Civil Procedure 19 and failure to state a claim. The motion was rendered moot by the filing of the first amended complaint. Defendant filed another motion to dismiss plaintiff's amended complaint alleging the same grounds.
The following facts pled in plaintiff's amended complaint are accepted as true for purposes of this motion. Plaintiff Robinson Mechanical Contractors Inc. d/b/a Robinson Construction Company ("plaintiff" or "Robinson") is a Missouri corporation with its principal place of business in Perryville, Missouri. Defendant PTC Group Holdings Corp. ("defendant" or "PTC Group") is a Delaware corporation with its principal place ofbusiness located in Wexford, Pennsylvania. PTC Group wholly owns, directs, and controls PTC Seamless Tube Corporation, f/k/a PTC Alliance Pipe Acquisition LLC ("Seamless"), also a Delaware corporation, and PTC Alliance Corp. At all relevant times, PTC Group's CEO, Peter Whiting, and CFO, Thomas Crowley, are listed as and represent themselves to be the CEO and CFO, respectively, of Seamless.
In 2013, Robinson entered into a Professional Services Agreement ("PSA") with Seamless for construction work on Seamless's pipe plant in Hopkinsville, Kentucky. Under the agreement, Robinson would be compensated for its work on a time and material basis. Due to the lack of information about the scope of work, both parties agreed that it was not possible to determine a maximum price. Robinson invoiced Seamless every two weeks for its work. By the middle of November 2014, Seamless owed Robinson more than $7 million on outstanding invoices.
On November 19, 2014, Doug Wilkins, PTC Group's Vice President of Global Manufacturing & Operational Excellence, came to Robinson's main office in Perryville, Missouri and met with Robinson's representatives, including its president Frank Robinson, vice-president Paul Findlay, and construction manager David Monier. Wilkins stated that PTC Group was happy with Robinson's work and that PTC Group's CEO Peter Whiting wanted Robinson to know that he also was very happy with Robinson's work and that they wanted Robinson, which had been working on Phase I of the Hopkinsville plant, to also be the contractor for Phase II. Wilkins noted in the meeting that the project was over PTC Group's budget and that PTC Group had funding and cash flow issues. He requested that Robinson agree to defer a payment then due until afterJanuary 1 and agree to extend the terms for payment from 30 days to 60 days. After the meeting, Wilkins called back and stated that he had been mistaken and that Peter Whiting requested that Robinson extend the payment terms to 90 days rather than 60 days for Phase I.
Subsequently, during the remainder of November and the first two weeks of December 2014, PTC Group made telephone calls to Robinson at its office in Perryville and sent emails to Robinson in Perryville in which the parties discussed PTC Group's request to defer the payment due to January and to extend the payment terms from 30 days to 90 days. Initially, the emails and phone conversations were by Wilkins, and later during the above-referenced period PTC Group's CFO Tom Crowley also engaged in negotiations and email communications with Robinson in Perryville, Missouri. During these discussions, Robinson expressed concern that stretching out the payments from 30 days to 90 days would require a substantial use of Robinson's line of credit and Robinson would be tying up several million dollars of its working capital in the project without being paid. Robinson told PTC Group that a failure to pay could be disastrous to Robinson, expressed concern about Seamless's ability to pay, and requested assurances from PTC Group that funds were available to pay Robinson for its work.
According to Robinson, PTC Group represented, promised, and assured Robinson that it had funds available to pay Robinson and that it would pay Robinson for its work on the Seamless construction project. In connection with these representations, PTC Group sent to Robinson in Perryville a PTC Group organizational chart and a PTC Group financial statement dated September 2014 as evidence that PTC Group had fundsavailable with which to pay Robinson for its work. PTC Group also sent to Robinson in Perryville a document entitled "Summary Borrowing Base Certificate" which showed an amount of $23,552,735 available under PTC Group's credit facilities and which PTC Group represented to Robinson was available to pay Robinson for its work. Crowley and Wilkins of PTC Group sent these documents to Robinson. Robinson made the decision to continue working pursuant to the PSA with Seamless and extend the payment terms to 90 days based on and in reliance on PTC Group's representations.
In reliance on PTC Group's representations and promises that it had funds available to pay Robinson for its work and that it would pay Robinson for its work on the Hopkinsville plant, Robinson entered into a letter agreement with PTC Group (though Seamless was not a signatory) on December 16, 2014, in which Robinson, among other things, agreed to defer a payment then due until January 2 and to extend payment terms for all invoices sent after December 1, 2014 from 30 days to 90 days. The letter includes the following provision:
Payments made on behalf of PTC Group Holdings Corp. and its subsidiaries, including PTC Seamless Tube Corp, are paid by PTC Group Holdings through its central cash management system. It is our intention that the payment of the remaining amount of $6,190,472.42 will be paid to Robinson Construction by wire transfer on January 2, 2015.
The letter agreement further provided that if there is any delay in payment beyond the terms agreed to in the letter agreement, Robinson shall have the right to cease work immediately...
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