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Elite Construction Team, Inc. v. Wal-Mart Stores, Inc.

United States District Court, D. Maryland

March 3, 2015

WAL-MART STORES, INC., et al., Defendants.


JAMES K. BREDAR, District Judge.

I. Background

Plaintiff Elite Construction Team, Inc. ("Elite"), sued Wal-Mart Stores, Inc. ("Wal-Mart"), and Liberty Mutual Insurance Company ("Liberty Mutual") in an attempt to be paid for construction work Elite alleges it did on three Wal-Mart stores, two in Maryland and one in Virginia. (Compl., ECF No. 1.) Pending before the Court are Wal-Mart's motion to dismiss the counts against it (Counts I, III, and V) (ECF No. 8) and Liberty Mutual's motion to stay the case pending completion of alternative dispute resolution proceedings (ECF No. 9). The motions have been briefed (ECF Nos. 10, 11, 12, 13), and no hearing is required, Local Rule 105.6 (D. Md. 2014). The motions will be granted.

II. Standard of Dismissal for Failure to State a Claim

A complaint must contain "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists "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. An inference of a mere possibility of misconduct is not sufficient to support a plausible claim. Id. at 679. As the Twombly opinion stated, "Factual allegations must be enough to raise a right to relief above the speculative level." 550 U.S. at 555. "A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.'... Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555, 557). Although when considering a motion to dismiss a court must accept as true all factual allegations in the complaint, this principle does not apply to legal conclusions couched as factual allegations. Twombly, 550 U.S. at 555.

III. Allegations of the Complaint

Wal-Mart entered into contracts with RIV Construction Group, Inc. ("RIV"), for the construction of three Wal-Mart stores; two are in Maryland, and one is in Virginia. (Compl. ¶¶ 7, 17, 27.) In turn, RIV, using a standard form agreement, entered into a subcontract with Elite to perform certain site development services for each of the three Wal-Mart construction projects. ( Id. ¶¶ 8, 18, 28.) Elite furnished labor and materials and extra work "at the express request and/or direction of RIV" for each of the projects. ( Id. ¶¶ 9, 19, 29.) RIV has failed and refused to pay Elite for its work on these three projects; a total of $1, 428, 804.55 is owed by RIV to Elite. ( Id. ¶¶ 10, 20, 30.) Upon Elite's information and belief, Wal-Mart "has withheld monies from RIV in an amount equal to or in excess of" the amounts Elite claims to be owed by RIV. ( Id. ¶¶ 11, 21, 31.)

IV. Analysis of the Motion to Dismiss

Each of the three counts by Elite against Wal-Mart is asserted under a theory of breach of implied contract or quantum meruit and seeks the money Elite is due from RIV. The three counts fail under Maryland law.

The decision of Bennett Heating & Air Conditioning, Inc. v. NationsBank of Maryland, 674 A.2d 534 (Md. 1996), is directly on point and forecloses Elite's claims against Wal-Mart. The Bennett opinion spoke approvingly of the general explanation of restitution in a treatise by Professor Dan B. Dobbs. Id. at 539 n.4 (citing 1 D. Dobbs, Law of Remedies § 4.1(1), at 556 (2d ed. 1993)). Quantum meruit and implied contract, or quasi-contract, are all aimed at achieving restitution. Id. "[R]estitution is a restoration required to prevent unjust enrichment." Id. However, in analyzing a subcontractor's claim against a property owner, the Bennett court aligned itself with the overwhelming number of other jurisdictions that deny relief to unpaid subcontractors claiming the owners are unjustly enriched. Id. at 541. The rationale is that the owner's enrichment is not unjust because he got no more than what he contracted for with the general contractor; the subcontractor is a stranger to that contract. Id. at 540-41. Thus, "the subcontractor relied on the credit of the general contractor, not the owner, and it is not unfair to him or enriching to the landowner to respect the contractual arrangement.'" Id. at 541 (quoting 1 Dobbs § 4.9(4), at 698. Furthermore, the owner "remains liable for the payments due the contractor if he has not already paid. Indeed, this liability redounds to the benefit of the sub, who can, using garnishment or subrogation, enforce his claim against the general contractor against any funds retained by the landowner.'" Id. (quoting Dobbs, id. ). See also Berry & Gould, P.A. v. Berry, 757 A.2d 108, 116 (Md. 2000) (reaffirming absence of restitution remedy for subcontractor directly against owner with whom subcontractor is not in privity); Truland Serv. Corp. v. McBride Electric, Inc., Civ. No. ELH-10-3445, 2011 WL 1599543, at *8-10 (D. Md. Apr. 27, 2011) (rejecting similar counts brought under theories of quantum meruit and implied-in-fact contract).

It is this latter point that seems to have escaped Elite in pressing its claim against Wal-Mart. Elite has not, in this suit, sued RIV, but if it were to obtain a judgment against RIV, then Elite could seek through garnishment or subrogation the monies owed by Wal-Mart to RIV. It cannot, however, skip that necessary step and proceed directly to suit against Wal-Mart.

In an effort to overcome the unassailable holding of Bennett, Elite argues in its opposition that it was an intended beneficiary of the contracts between Wal-Mart and RIV and, therefore, a constructive trust was created in Elite's favor for the monies Elite was supposed to receive from RIV and, through RIV, secondarily from Wal-Mart. (Pl.'s Opp'n 1.) Notably, Elite does not cite any Maryland case of like circumstances for this proposition that so clearly runs afoul of Bennett. The Maryland Court of Appeals has clarified that a constructive trust is a remedy for unjust enrichment. Washington Suburban Sanitary Comm'n v. Utilities, Inc. of Maryland, 775 A.2d 1178, 1200 (Md. 2001) (citing 1 Dobbs § 4.3(2), at 597). Because Maryland precedent unequivocally establishes that Wal-Mart is not unjustly enriched in the instant circumstances, see Bennett, Elite's argument for the creation of a constructive trust fails. Moreover, as Wal-Mart points out, the contracts between Wal-Mart and RIV expressly disavow any interpretation of them that would "confer any rights upon any person who is not a party to this Contract." (Wal-Mart's Reply 6 (citing Contracts, article 23.3, Pl.'s Opp'n, Exs. 1-3).) Additionally, Elite has made no allegations that it had direct dealings with Wal-Mart such that a contract arose between them.[1] No contract between Wal-Mart can be implied either in law or in fact. The counts against Wal-Mart will be dismissed.

The Court notes that Wal-Mart's motion includes a request that Wal-Mart be awarded "its attorney's fees, costs, and such other appropriate relief" (Wal-Mart's Mot. Dismiss 1), but has provided no argument ...

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