D.H. Griffin Wrecking Co. v. 1031 Canal Dev., LLC

463 F.Supp.3d 713

D.H. GRIFFIN WRECKING COMPANY, INC.

v.1031 CANAL DEVELOPMENT, LLC

CIVIL ACTION NO. 20-1051

United States District Court, E.D. Louisiana.

Signed May 29, 2020

Richard John Tyler, Allison Breen Kingsmill, New Orleans, LA, Frederick Gibbons Addison, Jones Walker LLP, Baton Rouge, LA, for D.H. Griffin Wrecking Company, Inc.

Kerry James Miller, Michael Ryan Dodson, Paul C. Thibodeaux, Fishman Haygood, LLP, New Orleans, LA, for 1031 Canal Development, LLC.

SECTION "L" (3)

ORDER & REASONS

Eldon E. Fallon, United States District Judge

Pending before the Court is Counter-Defendant D.H. Griffin Wrecking Company, Inc.’s Motion to Dismiss various counterclaims. R. Doc. 44. Counter-Claimant 1031 Canal Development, LLC, opposes the motion. R. Doc. 45. D. H. Griffin Wrecking Company, Inc., has filed a reply. R. Doc. 51. Having considered the parties’ arguments and the applicable law, the Court now rules as follows.

I. BACKGROUND

This declaratory judgment action arises out of the partial collapse of the Hard Rock Hotel under construction at 1031 Canal Street, New Orleans, Louisiana, on October 12, 2019. R. Doc. 1 ¶ 7. Plaintiff D.H. Griffin ("Griffin") is a demolition contractor engaged by Defendant 1031 Canal Development, LLC, ("1031 Canal"), the company overseeing the development of the Hard Rock Hotel, and the State of Louisiana. Plaintiff Griffin was engaged to demolish two tower cranes that were damaged during the structural collapse of the hotel. The cranes were demolished on October 20, 2019. R. Doc. 1 ¶ 12.

Following the demolition of the cranes, Griffin and 1031 Canal began discussing the demolition of the building itself. R. Doc. 1 ¶ 13. The parties ultimately memorialized the terms and conditions of their agreement in a signed document entitled "Binding Memorandum of Understanding of Demolition (Project)" ("MOU"). R. Doc. 1 ¶ 15. In relevant part, the MOU provided that Griffin would secure $50 million in insurance coverage and that the parties would formalize the agreement through a "good faith negotiation within seven (7) days." R. Doc. 1 ¶ 19. Despite continued negotiations, the parties were unable to reach a formal agreement within seven days, allegedly for two reasons. First, because the State refused to indemnify Griffin, an issue Griffin characterizes as "a foundational premise of D.H. Griffin engaging to do the demolition work, as contemplated by the Memorandum of Understanding," and second because Griffin was only able to secure a commitment for $22 million in insurance coverage. R. Doc. 1 ¶ 21. 1031 Canal allegedly refused to formalize the agreement without $50 million in insurance as specified in the MOU. R. Doc. 1 ¶ 23. On March 28, 2020, 1031 Canal sent Griffin a Cease and Desist Letter claiming that Plaintiff has breached its obligations under the MOU. R. Doc. 1 ¶ 24.

Based on the foregoing, Griffin filed the instant declaratory judgment action seeking a "determination of the validity and the enforceability of the Memorandum of Understanding under Louisiana law and 1031 Canal's entitlement to claim damages for breach of contract." R. Doc. 1 ¶ 30. Essentially, Griffin argues the MOU is not a binding contract capable of being breached. Rather, in Griffin's view, it is merely a "term sheet of ‘hoped for’ contract terms." R. Doc. 1 ¶ 25.

Defendant 1031 Canal answered the complaint, providing a notably different interpretation of the facts. Specifically, 1031 Canal alleges that Griffin engaged in nefarious price gouging with respect to the tower crane demolition contract, but that 1031 Canal had no choice but to acquiesce due to intense political pressure from the State of Louisiana, City of New Orleans, and the public.¹ R. Doc. 5 at 13. 1031 Canal laments the obstacles preventing the timely demolition of the building and charges Plaintiff with having a "central role in orchestrating these delays." R. Doc. 5 at 2. 1031. The MOU, according to 1031 Canal, was negotiated with Griffin at the request of City officials. R. Doc. 5 at 14–15. 1031 Canal also specifically argues that the MOU was contemplated as a binding contract, despite the fact that the "exact scope of ‘services’ would be formalized in a good-faith negotiation." R. Doc. 5 at 15. 1031 Canal contends, "The binding nature of the ‘Binding’ Memorandum was expressly understood by everyone, including Griffin, to be a material inducement of 1031 Canal's consent, particularly because of Griffin's past actions and misrepresentations with respect to the crane implosion." R. Doc. 5 at 15. Despite 1031 Canal's refusal to commit to the under-insured project, it alleges that "Griffin continues to lobby government officials to require 1031 Canal to agree to an under-insured demolition contract to Griffin." R. Doc. 5 at 17.

Based on these allegations, 1031 Canal additionally raises eight counterclaims against Griffin. These claims, discussed in greater detail below, involve violations of the Louisiana Unfair Trade Practice Act ("LUTPA"), tortious interference with business relations, fraud, breach of contract, detrimental reliance, and duress.

II. PENDING MOTION

Griffin seeks the dismissal of each of 1031 Canal's counter-claims on the grounds that 1031 Canal has failed to state a claim with respect to each count and that such deficiencies cannot be cured by amendment because the facts necessary to support such claims are implausible in light of the evidence provided by Griffin. R. Doc. 44. In support of its motion, Griffin suggests the Court consider a number of documents outside the pleadings, including: (1) the Binding Memorandum of Understanding (Project) dated January 14, 2019; (2) the Emergency Public Works Agreement dated October 18, 2019; (3) an email from Steven Dwyer dated March 6, 2020; and (4) 1031 Canal's Motion for Approval of Site Demolition, Entry of Evidence Preservation Protocol, and for Expedited Hearing in the proceeding Membreno v. 1031 Canal Investments, L.L.C. et al. , No. 2019-10819, Civil District Court for the Parish of Orleans. R. Doc. 44 at 4.

1031 Canal opposes the motion. R. Doc. 45. 1031 Canal specifically objects to the consideration of several of these documents. R. Doc. 45 at 2. Additionally, 1031 Canal argues it has pleaded sufficient facts to state a claim with respect to each counterclaim, but that in the event any pleadings are deficient, it should be granted leave to amend. R. Doc. 45 at 22. Griffin has filed a reply, largely re-urging the arguments made in the motion. R. Doc. 51.

III. LAW & ANALYSIS

A. Federal Rule of Civil Procedure 12(b)(6)

The Federal Rules of Civil Procedure permit a defendant to seek a dismissal of a complaint based on the "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint should not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). To survive a Rule 12(b)(6) motion to dismiss, a complaint must include factual allegations that are "enough to raise a right to relief above the speculative level," Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Particularly, "a plaintiff must plead specific facts, not mere conclusory allegations." Elliott v. Foufas , 867 F.2d 877, 881 (5th Cir. 1989). The complaint must also "state a claim to relief that is plausible on its face," Twombly , 550 U.S. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). When ruling on a motion to dismiss, a court must construe facts in the light most favorable to the nonmoving party, id. , and it "must accept as true all of the factual allegations contained in the complaint." Twombly , 550 U.S. at 572, 127 S.Ct. 1955 (quoting Swierkiewicz v. Sorema N. A. , 534 U.S. 506, 508 n.1, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) ). A court "do[es] not accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions." Plotkin v. IP Axess Inc. , 407 F.3d 690, 696 (5th Cir. 2005).

B. Discussion

1. Relevant Documents

Typically, a court considering a motion to dismiss is confined to the four corners of the complaint. Morgan v. Swanson , 659 F.3d 359, 401 (5th Cir. 2011). However, a court may also consider documentary evidence attached to a motion to dismiss "if they are referred to in the plaintiff's complaint and are central to her claim." Collins v. Morgan Stanley Dean Witter , 224 F.3d 496, 499 (5th Cir. 2000) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp. , 987 F.2d 429, 431 (7th Cir. 1993) ). As the Fifth Circuit has explained, consideration of such documents is appropriate because "[i]n so attaching, the defendant merely assists the plaintiff in establishing the basis of the suit, and the court in making the elementary determination of whether a claim has been stated." Id.

Griffin urges the Court to consider four documents when evaluating the instant motion. 1031 Canal specifically objects to the consideration of two of those documents: the Emergency Public Works Agreement dated October 18, 2019, and an email from Steven Dwyer dated March 6, 2020. The Court will discuss each contested document in turn.

a. Emergency Public Works Agreement

Griffin contends consideration of the Emergency Public Works Agreement is appropriate because its existence is admitted in 1031 Canal's answer and is central to 1031's counterclaims for LUTPA violations, duress, and breach of the crane implosion contract. R. Doc. 44 at 4. In opposition, 1031 Canal argues it never mentioned the specific Agreement and only admitted in its answer that the Agreement was executed by the State of Louisiana. Further, 1031 Canal contends the...