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Wadley Crushed Stone Company, LLC v. Positive Step, Inc.

United States District Court, M.D. Alabama, Eastern Division

November 2, 2018

WADLEY CRUSHED STONE COMPANY, LLC, Plaintiff,
v.
POSITIVE STEP, INC. d/b/a 1st QUALITY EQUIPMENT COMPANY, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          DAVID A. BAKER UNITED STATES MAGISTRATE JUDGE

         Plaintiff, Wadley Crushed Stone Company, LLC, sues Defendants, Positive Step, Inc. d/b/a 1st Quality Equipment Company (“Positive Step”) and Thomas W. Curley (“Curley”) for breach of contract and misrepresentation. (Doc. 46). Before the court is Defendants' Motion to Dismiss Plaintiff's Third Amended Complaint (Doc. 49) and Plaintiff's Conditional Motion for Leave to Amend Complaint (Doc. 53). The matters have been fully briefed by the parties, and the court heard argument on September 25, 2018. For the reasons that follow, the court grants the motion to dismiss (Doc. 49) and grants the motion for leave to amend (Doc. 53).

         I. Jurisdiction

         This matter was removed to this court pursuant to 28 U.S.C. §§ 1332(a), 1441, and 1446. (Doc. 1). The jurisdiction of the court is invoked based upon diversity of citizenship and an amount in controversy in excess of $75, 000. Id. ¶ 6. The parties do not contest personal jurisdiction or venue, and the court finds sufficient information of record to support both. See 28 U.S.C. § 1391.

         II. Background and Statement of Facts[1]

         Plaintiff Wadley Crushed Stone (“Wadley”) is an Alabama corporation doing business as a granite rock quarry. (Doc. 46, ¶¶ 1, 5). Defendant Positive Step is a Georgia corporation that holds itself out as having experience in the aggregate business, helping customers increase productivity, reduce costs, and maintain high production through the selection of the highest quality new and used equipment. Id. ¶¶ 2, 7. Defendant Curley is a citizen of Georgia and the owner of Positive Step. Id. ¶ 3.

         In 2012, Defendants contracted to provide Wadley a portable granite plant to be located on Wadley's property in Wadley, Alabama.[2] Id. ¶ 9. Wadley advised Defendants the plant needed to produce 500 tons-per-hour of merchantable granite rock that consisted of 60% railroad quality ballast capable of being loaded directly into railcars at 2000 tons-per-hour. Id. ¶ 10.

         As part of their contract with Wadley, Defendants specified the equipment and hired engineering consultants to recommend the layout for the granite quarry and the equipment needed to meet specified production and loadout requirements. Id. ¶ 13. The plant was completed and put into operation in late 2012. Id. ¶ 14. Defendants represented that the equipment sold to Wadley had a 20-year useful life. Id. ¶ 15.

         After installation, the equipment specified in the contract was found to be incapable of producing the represented production and loadout capabilities. Id. ¶ 16. Over the years, Defendants claimed quarry management and operators were the cause of Wadley's problems, and not any deficiency in the equipment or design by Positive Step. Id. ¶ 18. In reliance upon representations by Defendants that the plant could reach production and loadout requirements, Wadley purchased additional equipment from Defendants and delayed replacing the inadequate equipment originally specified. Id. ¶ 19. Ultimately, Wadley had to cease using the equipment and layout provided by Positive Step and replace it with equipment that was capable of handling the granite mined on its property. Id. ¶ 20. As a result, Wadley suffered financial damages due to loss of sales and additional operating costs. Id. ¶ 21.

         Wadley initially filed suit against the corporate Defendant on November 15, 2017, in the Circuit Court for Randolph County, Alabama. (Doc. 1-1). Positive Step removed the case to this court, answered and counterclaimed. (Docs. 1, 7). Plaintiffs filed a First Amended Complaint on December 27, 2017, which Defendant answered January 11, 2018. (Docs. 10, 13).[3] The court granted Plaintiff leave to file a second amended complaint, which Plaintiff filed in May 2018, adding Thomas Curley as a named Defendant. (Docs. 32, 33). In its Third Amended Complaint filed June 12, 2018, [4] Wadley sues Defendants for breach of contract due to their failure to provide a portable granite plant that could produce 500 tons-per-hour (Count I) and their failure to design and provide equipment for a rail ballast loadout system that could load 2, 000 tons of granite per hour (Count II). (Doc. 46 at 5-7). Additionally, Wadley sues Defendants for misrepresentation (Count III) as to the amount of granite per hour that could be produced by the portable granite plant and the amount of granite that could be loaded per hour into rail cars. Id. at 7-8.

         Defendants move to dismiss the Third Amended Complaint arguing Counts I and II are due to be dismissed because they are barred by the applicable four-year statute of limitations. (Doc. 49). Defendants previously raised a statute of limitations defense in their Answer and Affirmative Defenses. See Docs. 7, 13, 36. Additionally Defendant Curley contends Counts I and II are due to be dismissed as to him because those Counts fail to allege any facts indicating that Curley was a party to the contract. Defendants move to dismiss Count III for failing to plead the fraud claim with specificity as required under the federal rules.

         III. Legal Standard

         Federal Rule of Civil Procedure 8 provides that a complaint 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). The pleader must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “[D]etailed factual allegations” are not required, but mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” are not enough. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court “accept[s] the allegations in the complaint as true and constru[es] them in the light most favorable to the plaintiff.” Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003). In considering a motion to dismiss, the court is ordinarily limited to evaluation of matters alleged in the operative complaint. In appropriate cases, the court may also take into account additional matters presented in support of the motion when those matters are intrinsic to the claims and not reasonably in dispute. In this case, the agreement between the parties was included with the Motion to Dismiss and its terms and status as the basis for the parties' contract is not disputed. It will therefore be considered herein.

         IV. ...


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