US FOR ARGYLE CUT STONE v. PASCHEN CONTRACTORS, 86 C 4495.

• Citation: 664 F. Supp. 298
• Decision Date: 06 January 1987
• Docket Number: No. 86 C 4495.,86 C 4495.
• Court: United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
• Parties: UNITED STATES of America For the Use of ARGYLE CUT STONE CO., INC., an Illinois Corporation, Plaintiff, v. PASCHEN CONTRACTORS, INC., a Delaware Corporation; Gust K. Newberg, Inc., an Illinois Corporation; Paschen/Newberg Joint Venture, a Joint Venture; Thorlief Larsen & Son, Inc., an Illinois Corporation; the Aetna Casualty & Surety Company, an Insurance Corporation; Hartford Fire Insurance Company; and the United States of America, Veterans Administration, Defendants.

664 F. Supp. 298

UNITED STATES of America For the Use of ARGYLE CUT STONE CO., INC., an Illinois Corporation, Plaintiff, v. PASCHEN CONTRACTORS, INC., a Delaware Corporation; Gust K. Newberg, Inc., an Illinois Corporation; Paschen/Newberg Joint Venture, a Joint Venture; Thorlief Larsen & Son, Inc., an Illinois Corporation; the Aetna Casualty & Surety Company, an Insurance Corporation; Hartford Fire Insurance Company; and the United States of America, Veterans Administration, Defendants.

No. 86 C 4495.

United States District Court, N.D. Illinois, E.D.

January 6, 1987.

Anthony Campanale, Edward Boraz, Landesman & Schwartz, Chicago, Ill., for plaintiff.

Eileen M. Marutsky, Asst. U.S. Atty., Chicago, Ill., Kirk L. Miller, O'Halloran Lively & Walker, Northbrook, Ill., Eric A. Oesterle, Sonnenschein Carlin Nath & Rosenthal, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Plaintiff United States of America, for the use of Argyle Cut Stone, Inc. ("Argyle") has brought this action against several defendants asserting causes of actions under the Miller Act, 40 U.S.C. §§ 270a-270d, and several pendant state law claims. Currently before the Court is a motion to dismiss under Fed.R.Civ.P. 12(b)(6) Counts VII, IX and X of the amended complaint by pendant party defendant Thorlief Larsen & Son, Inc. ("Thorlief"). For the reasons stated below, we grant that motion in part and deny that motion in part.

Facts¹

Argyle's claims against Thorlief are just a few of the claims Argyle asserts in this action which originated out of a federal construction project. Defendants Paschen Contractors, Inc. ("Paschen") and Gust K. Newberg, Inc. ("Newberg") as Paschen/Newberg Joint Venture ("Joint Venture") were the prime contractors for the United States for the building of a veterans administration hospital in Chicago, Illinois. Argyle variously characterizes Thorlief as a general contractor or prime contractor on that same project.

With respect to its claims against Thorlief, Argyle maintains that it provided labor and material to the job site at first in reliance upon statements made by Thorlief, but later on the basis of an alleged agreement between the parties. In support of its claim that an agreement existed between the parties, Argyle appended a one-page paper dated September 24, 1985.² The paper appears to be payment schedule for labor and materials supplied by Argyle to the site. It is signed by four individuals, but there is no indication as to who the individuals represent, other than the initials TLS, which could refer to Thorlief, Larsen and Sons. Argyle has also appended nineteen delivery receipts as alleging the terms of the agreement between the parties.³

Argyle alleges that it provided the labor and material required by the parties' agreement and was not notified by Thorlief during its course of performance that it had provided nonconforming material or labor. Also, Argyle alleges that Thorlief, while in control of the construction site, accepted all labor and materials, but refused to pay Argyle. Argyle contends that it is due $55,013.78 for labor and materials provided to the site. Argyle further alleges that it believes that it was because of cost over-runs and a slim profit margin by Thorlief and not because Argyle's materials or labor were nonconforming, that Thorlief refused to pay.

Motion to Dismiss

Thorlief has raised a number of issues as to the sufficiency of Argyle's counts, but has also requested in the alternative that we strike Argyle's claims for attorneys' fees under each of its counts against Thorlief. We will address the motion to strike the attorneys' fees first.⁴

The American rule governing the award of attorneys' fees in federal courts is that "attorneys' fees are not recoverable in the absence of a statute or enforceable contract providing therefor." F.D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1973) (quoting Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475 (1967)).

Argyle appears to contend that because it has brought Miller Act claims against the other defendants, that the federal common law as to attorneys' fees governs its pendant state law claims against Thorlief. The Miller Act itself does not provide for attorneys' fees. However, the federal common law of attorneys' fees applies to Miller Act claims. United States ex rel. Garrett v. Midwest Construction Co., 619 F.2d 349, 352 (5th Cir.1980), and under federal common law there are exceptions to the general American rule.⁵ Yet, Argyle has no federal claim against Thorlief. Argyle's claims against Thorlief are present before this Court by way of pendant party jurisdiction. Argyle has asserted four state law claims against Thorlief over which this Court has jurisdiction, despite the lack of diversity because the claims arose out of the same factual situation as Argyle's claims against the other defendants under the Miller Act. Even if Argyle were successful on its Miller Act claims and also recovered attorneys' fees under the federal common law, it could still not recover attorneys' fees under the state law claims, cf. Clark v. City of Chicago, 595 F.Supp. 482, 488 (N.D.Ill.1984), unless the substantive law of Illinois so provided, because it is the state substantive law which governs pendant claims brought in conjunction with Miller Act cases. Miller Equipment Co. v. Colonial Steel & Iron Co., 383 F.2d 669 (4th Cir.), cert. denied, 390 U.S. 955, 88 S.Ct. 1049, 19 L.Ed.2d 1148 (1967). Under Illinois law, attorneys' fees and the ordinary expenses of litigation are not allowable to the successful party absent a statute or contractual agreement. Michaels v. Michaels, 767 F.2d 1185, 1205 (7th Cir.), cert. denied, 474 U.S. 1057, 106 S.Ct. 797, 88 L.Ed.2d 774 (1985) (citing Kerns v. Engelke, 76 Ill.2d 154, 166-67, 28 Ill.Dec. 500, 506, 390 N.E.2d 859, 865 (1979); Oazi v. Ismail, 50 Ill.App.3d 271, 273, 7 Ill.Dec. 434, 436, 364 N.E.2d 595, 597 (1977)).

The alleged contract in this case does not provide for attorneys' fees, nor does there appear to be any applicable Illinois statute which would award attorneys' fees in this situation.⁶ Therefore, finding that Argyle has failed to state a claim upon which relief can be granted for attorneys' fees, under the state law counts, we grant Thorlief's motion to dismiss the claims for attorneys' fees.

Count VII: Breach of Contract

Thorlief urges this Court to dismiss Argyle's claim for breach of contract on the grounds that the one-page paper Argyle set forth as Exhibit B is too indefinite to be enforced. But this argument misses the mark. It is elementary contract law that an agreement too indefinite and vague for enforcement may be made definite by performance. Smithereen Co. v. Renfroe, 325 Ill.App. 229, 59 N.E.2d 545 (1945); Arthur Rubloff & Co. v. Leaf, 347 Ill.App. 191, 106 N.E.2d 735, 737 (1952), and that performance of a contract takes it out of the statute of frauds. Pearce v. Pearce, 184 Ill. 289, 56 N.E. 311 (1859). Therefore, where plaintiff has alleged full performance of the contract, indefiniteness will not bar an action.⁷

Count VIII: Unjust Enrichment—Quantum Meruit—Detrimental Reliance

Thorlief requests that this Court strike Argyle's claim for unjust enrichment as failing to comply with Fed.R.Civ.P. 8(e)(i) sic and 9(f), with respect to the "assertions" Argyle claims it relied upon in providing labor and material to the job site. In the alternative, Thorlief requests that Argyle file a more definite statement as to its allegations.

Rule 8(e)(1) provides that "each averment of a pleading shall be simple, concise, and direct. No technical forms of pleadings or motions are required." Rule 9(f) provides that "for the purpose of testing the sufficiency of a pleading, averments of time and place are material and shall be considered like all other averments of a material matter." Argyle's pleading is clearly sufficient under these rules. "It is elementary to most practitioners that pleadings in federal court need only comply with the notice pleading standard. Notice pleading means simply that in order to state a claim for relief, the plaintiff need only notify the defendant of the theory behind the claims alleged and the basic grounds which support those claims." Williams v. Adams, 625 F.Supp. 256, 262 (N.D.Ill.1985). Fed.R.Civ.P. 8(a) requires Argyle to set forth only a short and plain statement of its claim. It is clear from the complaint that Argyle has met this standard. Paragraph 7 of Count VIII states that Thorlief made assertions upon which Argyle relied. As to what each assertion was, and when each assertion was made, Thorlief can use discovery to find out. The Federal Rules of Civil Procedure balances notice pleading with very wide and liberal discovery provisions. Additionally, Thorlief's citation to Rule 9 is inapposite, as that rule refers only to allegations that plaintiff does make regarding time and place. "It should be perfectly clear that Rule 9(f) does not require the pleader to set out specific allegations of time and place; it merely states the significance of these allegations when they are actually interposed." 5 C. Wright & A. Miller, Federal Practice & Procedure, § 1309 (1969). Occasionally, a specific cause of action would require that allegations of time and place be made, such as a personal injury suit. A cause of action for quantum meruit or unjust enrichment, however, is not such an action. Therefore, finding that plaintiff has adequately met the 8(a) standard and that Thorlief's reference to Rule 9(f) is misplaced, we deny its motion to dismiss Argyle's Count VIII.⁸

Thorlief in the alternative requests that Argyle files a more definite statement under Fed.R.Civ.P. 12(e). Rule 12(e) motions are generally disfavored. Courts grant such motions only when the pleading is so unintelligible that the movant cannot draft a...