United States District Court, E.D. Virginia, Richmond Division
A. Gibney, Jr. United States District Judge
2011, Dominion Transmission, Inc. ("DTI") retained
Precision Pipeline, LLC ("Precision") to build a
55-mile stretch of natural gas pipeline through Pennsylvania
and West Virginia. During the course of construction,
Precision encountered many unexpected issues, making the
project dramatically more difficult than planned. Precision
now says that DTI failed to pay Precision for its work and
drastically changed the scope of the project due to
inaccurate information about the number of underground
obstacles along the pipeline's path.
has now sued DTI asserting eight causes of action: (1)
Cardinal Change -Quasi-Contract (Quantum Meruit), (2)
Abandonment - Quasi-Contract (Quantum Meruit), (3)
Constructive Fraud - Quasi-Contract (Quantum Meruit), (4)
Breach of Contract, (5) Quantum Meruit - Quasi-Contract, (6)
Pennsylvania's Contractor and Subcontractor Payment Act,
(7) Pennsylvania's Underground Utility Line Protection
Law, and (8) Unjust Enrichment - Quasi Contract.
moved to dismiss Precision's claims. The Court grants the
motion to dismiss Counts two, six, and seven. Count two fails
because the law does not recognize an independent claim for
abandonment. Counts six and seven fail because they arise
exclusively under Pennsylvania law, but Virginia law governs
Court denies the motion as to the remaining claims, because
Precision adequately pleads claims of breach of contract,
quasi-contract, and constructive fraud.
sought bids for the pipeline project by providing Precision
and other potential bidders with informational documents
about the scope of the work. (Compl., ¶¶ 62-63.)
These documents included alignment drawings which showed that
the proposed pipeline would cross ninety other underground
utility lines (the "Foreign Crossings"). (Compl.
¶ 80.) DTI hired Trico Surveying and Mapping, Inc.
("Trico") and G-A-I Consultants, Inc.
("G-A-I") to design the alignment drawings. (Compl,
won the bid, and in early 2011, the parties entered into two
substantially similar contracts (the "Pipeline
Contracts"). (Compl. ¶¶ 1-3; Dk. Nos. 49-1
and 49-2.) The Pipeline Contracts each contain a choice of
law and forum selection clause naming Virginia as the forum
and source of law.
fulfilling the Pipeline Contracts, Precision encountered 257
Foreign Crossings. Excavating around the existing underground
structures required a substantial amount of additional work
not contemplated in the Pipeline Contracts. (Compl.
¶¶ 112-24, 133, 140.) Precision also ran into other
problems including landslides, lack of access, and bad
weather that made the job harder. Due to the extra work,
Precision submitted, and DTI approved, a number of change
orders. DTI, however, "either denied or ignored tens of
millions of dollars in [legitimate] change order
requests." (Compl. ¶ 164.)
Precision brought this case, DTI sued Precision in this Court
in 2013. The Court dismissed the case because DTI had failed
to comply with a contractual provision requiring the parties
to engage in alternative dispute resolution before filing
suit. Before the beginning of a scheduled ADR process,
Precision filed suit in the Western District of Pennsylvania.
The Pennsylvania court enforced the forum selection clause of
the Pipeline Contracts and transferred the case to this
Court. This Court stayed the case pending the parties'
attempts at ADR. ADR failed, and now the case proceeds.
on Virginia law, DTI moves to dismiss all of Precision's
causes of action. Hoping to get a leg up on its opponent,
Precision argues that Pennsylvania law controls this case.
lawsuit raises two types of claims: claims that arise from
the contracts, and other claims that arise under the separate
legal theory of quantum meruit, also known as quasi-contract.
The choice of law analysis differs depending on the claims.
Virginia Law Governs Claims Arising Under the Pipeline
Pipeline Contracts contain broad choice of law provisions.
Specifically, the agreements say:
This Contract shall be governed by the laws of the
Commonwealth of Virginia, without giving effect to the choice
of laws principles thereof....
(Dk. Nos. 49-1 and 49-2 at Section 24.2.) This provision
could not be clearer, and requires the Court to apply
Virginia law to the claims arising from the contracts.
Virginia law "looks favorably upon choice of law clauses
in a contract, giving them full effect except in unusual
circumstances." Colgan v Air, Inc. v. Raytheon Air
craft, Co.,507 F.3d 270, 275 (4th Cir. 2007). No
unusual circumstances exist here despite DTI's arguments
that the Pipeline Contracts lack a reasonable relationship to
Virginia and that enforcement of the provision violates
Pennsylvania public policy. Tate v. Hain, 181 Va.
402, 410, 25 S.E.2d 321, 324 (1943) C'[T]he true test for
the determination of the proper law of a contract is the
intent of the parties and  this ...