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Campbell Transportation Company, Inc. v. Alpha Pa Coal Terminal, LLC

United States District Court, W.D. Pennsylvania

May 28, 2015

CAMPBELL TRANSPORTATION COMPANY, INC., Plaintiff,
v.
ALPHA PA COAL TERMINAL, LLC, Defendant, And ALPHA PA COAL TERMINAL, LLC, Third-Party Plaintiff,
v.
POWELL CONSTRUCTION COMPANY, INC., HUNGATE ENGINEERING, P.C, and GEOMECHANICS, INC., Third-Party Defendants.

OPINION ON MOTION TO DISMISS COUNTERCLAIM ECF NO. 21

LISA PUPO LENIHAN UNITED STATES MAGISTRATE JUDGE

Before the Court is Plaintiffs Motion to Dismiss the Counterclaim filed by Alpha PA Coal Terminal, LLC (ECF No. 21). For reasons more fully set forth below, the Court will deny Plaintiffs Motion.

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff, Campbell Transportation Company, Inc., ("CTC") filed this lawsuit against Defendant Alpha PA Coal Terminal, LLC ("APACT"), to recover damages for breach of a construction contract. The Complaint alleges that APACT has failed to pay (1) the remaining balance owed on the construction work, (2) the balance for performing the remedial work, and (3) the balance incurred by offloading the materials used when performing the remedial work. (&e CompL, ECF No. 1.)

On February 17, 2015, APACT filed an Answer, Affirmative Defenses, Counterclaim, and Third-Party Complaint. (ECF No. 11). In its Counterclaim, APACT asserts that CTC is liable to it for Breach of Contract (Count I) and Breach of Warranty (Count II) relating to the October 15, 2014 failure of the retaining wall constructed by CTC under its Construction Agreement with APACT. In both counts, APACT seeks, inter alia, "all costs and expenses, including reasonable attorneys' fees and litigation costs...." (Compl. at ¶¶ 30 and 34.)

On March 10, 2015, CTC filed a Motion to Dismiss APACT's Counterclaim (ECF No. 21), limited to APACT's request for attorneys' fees and expenses associated with the litigation. APACT filed a Brief in Opposition to Plaintiffs Motion to Dismiss on March 31, 2015 (ECF No. 31). On April 14, 2015, CTC filed a Reply Brief (ECF No. 32).

The Complaint alleges that on June 26, 2014, CTC and APACT entered into a Construction Agreement under which CTC agreed to construct "a retaining wall by driving and anchoring sheet piles; based on engineered design, around four cells at the LaBelle harbor. (Compl. at ¶ 12). Construction of the retaining wall began on August 21, 2014. (Compl. at ¶ 15).

On October 15, 2014, CTC alleges that the retaining wall failed due to a design defect in the original engineering design. (Compl. at ¶ 22). On October 17, 2014, APACT advised CTC that it was investigating the incident to determine the cause of the failure. (See Ex. E to Compl., ECF No. 1-3 at 1-2.) APACT subsequently notified CTC on October 21, 2014, that its investigation revealed that CTC's "construction of this project was not performed in compliance with the plans/drawings provided" and CTC admittedly failed to" install sheet pilings to refusal". (See Ex. F to CompL, ECF No. 1-3 at 3-4.) As a result, on October 21, 2014, APACT demanded that CTC correct the failure and remediate the site pursuant to a third-party remediation plan. (Id.)

On October 23, 2014, CTC agreed to perform initial remediation work on the failed retaining wall upon review and approval by APACT and CTC of an approved remediation plan provided by APACT's third-party engineering firm. (See Ex. G to CompL, ECF No. 1-3 at 5-6.) CTC disagreed that such remediation work should be performed at its own expense and requested details of APACT's investigation. (Id.) Allegedly APACT did not provide any remediation plan in response to CTC's October 23, 2014 letter, nor did APACT provide details of its investigation. (Compl. at ¶ ¶ 30-31.)

On October 23, 2014, APACT advised CTC that it considered CTC's refusal to begin the remedial work on the afternoon of October 23, 2014, at its own expense, to be an event of default under the Construction Agreement, and that it expected CTC to cure the default by proceeding with the remediation work at no cost to APACT. (See Ex. H to Compl, ECF No. 1-3 at 7-8.) Both parties subsequently agreed that CTC would perform the remediation work at its own expense while retaining its right to reimbursement from APACT. (See Exs. I & J to Compl., ECF No. 1-3 at 9-12). On repeated occasions, CTC requested a copy of the comprehensive remediation plan and the survey of the failed areas of the wall, which APACT failed to provide. (See Exs. K & L to Compl., ECF No. 1-3 at 13-16; see also Compl. At ¶ 41.)

CTC began removing the sheet piles of the retaining wall, H-piles and certain fill material surrounding those items on November 10, 2014. (Compl. at ¶ 42.) On November 17, 2014, APACT advised CTC that it considered CTC to be in default of the Construction Agreement and demanded that CTC cure the default by performing additional remediation work, specifically, "(1) removal all of the retaining walls, (2) remove all of the H-piles (including all beams affixed to any H-piles), (3) remove all of the fill material, and (4) remove mooring cell numbers 17, 18 and 19." (See Ex. M to Compl., ECF No. 1-3 at 17-18; see also Compl. at ¶ 46.) APACT never provided an engineering remediation plan and advised on November 24, 2014 that it had not yet received any engineering analysis, remediation plan, or design or plan for constructing the new retaining wall. (Compl. at ¶ ¶ 47, 57-59.) CTC agreed to remove all of the retaining walls and all of the H-piles but refused APACT's remaining requests because neither of the additional requests was applicable to the remediation of the October 15, 2014 failure. CTC asserts that it has not created an event of "Default" and has fulfilled all conditions set forth in the Construction Agreement. {See Ex. N to Compl., ECF No. 1-3 at 19-21; see also Compl. at ¶ 52.)

II. LEGAL STANDARD

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint must be dismissed for failure to state a claim if it does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 556 (2007) (rejecting the traditional 12(b)(6) standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly). "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." Iqbal, 556 U.S. at 678 (citing Twombly at 556). The Supreme Court further explained:

The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and ...

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