United States District Court, M.D. Alabama, Eastern Division
WADLEY CRUSHED STONE COMPANY, LLC, Plaintiff/Counterclaim Defendant,
POSITIVE STEP, INC., d/b/a 1st QUALITY EQUIPMENT COMPANY, et al ., Defendants.
MEMORANDUM OPINION AND ORDER
STEPHEN M. DOYLE, UNITED STATES MAGISTRATE JUDGE
Crushed Stone Company, LLC, (“Plaintiff”) filed a
Fourth Amended Complaint against Positive Step, Inc. d/b/a
1st Quality Equipment Company (“1st Quality”) and
Thomas W. Curley (“Curley”) (collectively
“Defendants”) for breach of contract and
misrepresentation. (Doc. 67). Before the Court is
Defendants' Motion to Dismiss Plaintiff's Fourth
Amended Complaint (Doc. 68). For the reasons that follow,
Defendants' Motion to Dismiss is due to be GRANTED in
part and DENIED in part.
STATEMENT OF FACTS
is an Alabama corporation doing business as a granite rock
quarry. (Doc. 67, ¶¶ 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, 19.
Defendant Curley is a citizen of Georgia and the owner of
Defendant 1st Quality. Id. ¶ 3.
2012, Defendant 1st Quality executed a contract with
Plaintiff for a “500 TPH Portable Granite Plant”
(“the Plant”) to be located on Plaintiff's
property in Wadley, Alabama. Id. ¶ 21; (Doc.
69-1) at 2. The Plant was to consist of three separate areas:
(1) the primary section; (2) the secondary section; and (3)
the rail loading system. (Doc. 67) at 3-4. Prior to executing
the contract, Plaintiff advised Defendants that 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 2, 000
tons-per-hour. Id. at ¶ 22. These specific
requirements were needed so that Plaintiff could satisfy its
commitment to a railroad company and to its other customers.
Id. at ¶ 23. Plaintiff advised Defendants that
it did not have adequate expertise to determine what size or
types of equipment or the configuration of the equipment that
would need to meet the required production, specification,
yield, and loading capabilities. Id. at ¶ 25.
of their contract with Plaintiff, Defendants specified all of
the equipment needed and hired engineering consultants to
engineer, design, and recommend the layout for the granite
plant so that it would meet Plaintiff's specified
production, specification, yield, and loadout requirements.
Id. ¶ 26. Because Defendant First Quality was
not licensed as a general contractor in Alabama, it
recommended Plaintiff hire Gaston Construction
(“Gaston”) to build the Plant, which Plaintiff
did. Id. at 30. Gaston paid Defendants a 10%
commission, and Defendants advised Gaston on the proper
placement, installation, and operation of the various
components of the Plant while updating Plaintiff on the
course of construction and making recommendations for changes
along the way. Id. at ¶¶ 31, 32. The Plant
was completed and put into operation in late 2012.
Id. ¶ 33. During and after the completion of
the Plant, Defendants provided training to Plaintiff's
employees as to the best practices for operation of the Plant
and its various components. Id. at 34.
to entering the contract, Defendants represented to Plaintiff
that the Plant had “a 20-year useful life.”
Id. ¶ 35. After installation, however, some of
the individual components of the Plant that had been
recommended by Defendants were found to be incapable of
producing the represented production, specification, yield,
and loadout requirements. Id. at ¶ 36. When
confronted with the production problems, Defendants, by and
through their employees, represented to Plaintiff that the
production problems were not caused by deficient engineering,
design, or equipment, but were the fault of quarry
management, operators, or other elements beyond their control
and not related to the Plant engineered, designed, specified,
and constructed under the supervision of Defendants.
Id. at ¶ 39.
purchased additional equipment from Defendants and other
vendors in an attempt to address these issues and delayed
replacing the equipment originally specified. Id.
¶ 41. Ultimately, Plaintiff ceased using the equipment
and layout provided by Defendants and replaced it with
alternative equipment because of the insufficiencies with the
equipment specified by Defendants and the
engineering/design/layout provided by Defendants'
engineers and subcontractors. Id. ¶ 42. As a
result, Plaintiff suffered financial damages due to loss of
sales and additional operating costs. Id. ¶ 43.
Plaintiff also was unable to meet its minimum commitments to
the railroad company in 2013, 2014, and 2015. Id. at
¶ 44. Plaintiff ultimately borrowed $5 million to
replace the components of the primary section. Id.
at ¶ 47.
initially filed suit against the corporate Defendant on
November 15, 2017, in the Circuit Court for Randolph County,
Alabama. (Doc. 1-1). Defendant 1st Quality 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 on January 11, 2018. (Docs.
10, 13). The Court granted Plaintiff leave to file a Second
Amended Complaint to name Defendant Curley, which Plaintiff
filed in May 2018. (Docs. 32, 33). The Court also granted
Plaintiff leave to file a Third Amended Complaint, which
Plaintiff filed in June 2018. (Docs. 43, 46). The Third
Amended Complaint asserted breach of contract claims and a
claim for misrepresentation against Defendants. (Doc. 46).
filed a Motion to Dismiss Plaintiff's Third Amended
Complaint, arguing that the breach of contract claims were
due to be dismissed because they were barred by the
applicable four-year statute of limitations under the
(Doc. 49). Additionally, Defendant Curley contended that the
breach of contract claims were due to be dismissed as to him
because those claims failed to allege any facts indicating
that he was a party to the contract. (Doc. 49). Defendants
further moved to dismiss Plaintiff's misrepresentation
claim in the Third Amended Complaint, arguing that it failed
to meet the specificity requirement under the Federal Rules
of Civil Procedure for pleading fraud. Id.
responded in opposition to Defendants' Motion, but also
filed a Conditional Motion for Leave to Amend (Doc. 53) in
the event that the Court determined that Plaintiff's
Third Amended Complaint failed to adequately plead the
tolling of the statute of limitations and/or Plaintiff's
fraud allegations. The United States Magistrate Judge
previously assigned to the case held a hearing on
Defendants' Motion and determined that it should be
granted, but also determined that Plaintiff's Conditional
Motion for Leave to Amend (Doc. 53) its Third Amended
Complaint should be granted.
Defendants' Motion to Dismiss the breach of contract
claims, this Court found that the Motion should be granted
because the UCC's four-year statute of limitations
applied to the breach of contract claims. (Doc. 66). This
Court reasoned: “[t]hough not limited to the machinery,
the parties' commercial arrangement principally related
to physical goods sold and delivered by Positive Step.”
Id. at 6. This Court continued: “[a]bsent some
countervailing circumstances, such arrangements are treated
as the sale of goods subject to the dictates of Article 2 of
the Uniform Commercial Code, even if ancillary services are
provided and even though some of the goods delivered take on
characteristics of fixtures.” Id. This Court
then applied the UCC's four-year statute of limitations,
noting that by the allegations of the Third Amended
Complaint, the contract was entered into in 2012 and the
Plant was operational in late 2012, but Wadley did not file
suit until November 2017. Id. at 5. Nonetheless, the
Court afforded Plaintiff “a final opportunity to allege
any additional facts it believes . . . could avoid the
application of the statute of limitations.”
Id. Plaintiff filed its Fourth Amended Complaint
(Doc. 67) on November 14, 2018.
Fourth Amended Complaint, Plaintiff sues Defendant 1st
Quality for breach of contract due to (1) its failure to
provide a portable granite plant that could produce 500
tons-per-hour (Count I) and (2) its 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.
67) at 15-18. Additionally, Plaintiff sues Defendant 1st
Quality and Defendant Curley for misrepresentation (Count
III) as to the amount of granite per hour that could be
produced by the Plant and the amount of granite that could be
loaded per hour into rail cars. Id. at 7-8.
to their Motion to Dismiss Plaintiff's Third Amended
Complaint, Defendants move to dismiss Plaintiff's breach
of contract claims because they are barred by the UCC's
four-year statute of limitations. (Doc. 69) at 11-23.
Defendants also move to dismiss Plaintiff's
misrepresentation claim based upon Alabama's two-year
statute of limitations for fraud claims. Id. at