United States District Court, W.D. Virginia, Lynchburg Division
W.C. English, Inc., Plaintiff,
Rummel, Klepper & Kahl, LLP, ET AL., Defendants.
K. MOON UNITED STATES DISTRICT JUDGE.
matter is before the Court upon Defendant Rummel, Klepper
& Kahl, LLP's (“RK&K”) motion to
dismiss for failure to state a claim, pursuant to Federal
Rule of Civil Procedure 12(b)(6). (Dkt. 15). The instant case
arises out of a construction subcontract between Plaintiff
W.C. English, Inc. (“English”) and RK&K
involving improvements to Interstate 81 in Rockbridge County,
including the replacement of two bridges. The bridgework
failed to meet the Virginia Department of
Transportation's (“VDOT”) design and
construction specifications within the agreed timeline.
English alleges that RK&K breached their agreement by
negligently performing quality assurance on the project,
contributing to the project's failure to meet VDOT
asks the Court to dismiss the claims against it because it
argues the subcontract between RK&K and English, when
viewed in light of the contract between English and VDOT,
absolves them of any liability regarding English's
failure to complete the bridge work in accordance with
VDOT's specifications and timeline. However, the precise
meaning of the subcontract is unclear, as it contains
seemingly contradictory terms. Because there is ambiguity in
the subcontract-the resolution of which is an issue of fact
that cannot be settled at this stage-and English has pled
facts that could constitute breach under a reasonable
interpretation of the contract's ambiguous terms, the
Court holds that English has stated a plausible claim against
RK&K, and the motion to dismiss will be
motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests the
legal sufficiency of a complaint to determine whether the
plaintiff has properly stated a claim; “it does not
resolve contests surrounding the facts, the merits of a
claim, or the applicability of defenses.”
Republican Party of North Carolina v. Martin, 980
F.2d 943, 952 (4th Cir. 1992). Although a complaint
“does not need detailed factual allegations, a
plaintiff's obligation to provide the ‘grounds'
of his entitle[ment] to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (citations omitted).
need not “accept the legal conclusions drawn from the
facts” or “accept as true unwarranted inferences,
unreasonable conclusions, or arguments.” Eastern
Shore Markets, Inc. v. J.D. Assocs. Ltd. P'ship, 213
F.3d 175, 180 (4th Cir. 2000). “Factual allegations
must be enough to raise a right to relief above the
speculative level, ” Twombly, 550 U.S. at 555,
with all allegations in the complaint taken as true and all
reasonable inferences drawn in the plaintiff's favor.
Chao v. Rivendell Woods, Inc., 415 F.3d 342, 346
(4th Cir. 2005). Rule 12(b)(6) does “not require
heightened fact pleading of specifics, but only enough facts
to state a claim to relief that is plausible on its
face.” Twombly, 550 U.S. at 570. Consequently,
“only a complaint that states a plausible claim for
relief survives a motion to dismiss.” Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009).
Facts as Alleged
February 27, 2009, English entered into a contract
(“the Contract”) with VDOT for construction of
improvements to Interstate 81 (“I-81”) in
Rockbridge County. (Dkt. 1-1 ¶¶ 8, 12-13). The
Contract called for construction of a “Truck Climbing
Lane, ” which is an additional lane or roadway;
associated improvements to the shoulder and median;
replacement of two bridges on I-81 Northbound; and
replacement of one bridge over I-81 Northbound and Southbound
near Lexington (collectively “the Project”).
(Id. ¶ 13). English was responsible to VDOT for
designing and constructing the Project, as well as performing
Quality Assurance (“QA”) and Quality Construction
Inspection (“QC”), which are typically performed
by VDOT or its consultants. (Id. ¶ 14).
Contract specified that English was to achieve
“Substantial Completion” by September 4, 2012,
and “Final Completion” by October 30, 2012.
(Id. ¶¶ 15-16). The Contract contained a
series of penalties: (1) $3, 000 per day in liquidated
damages for failure to meet the Substantial Completion date;
(2) $2, 000 per day in liquidated damages for failure to meet
the Final Completion date; (3) $5, 000 per day in monetary
disincentives for failure to meet the Substantial Completion
date. (Id. ¶ 17).
the terms of the Contract, the QA and QC functions had to be
performed by companies approved by VDOT, licensed to perform
professional engineering work in Virginia, and prequalified
to perform such work by VDOT. (Id. ¶ 19). One
or about October 6, 2009, English entered into a subcontract
with RK&K (“the QA Subcontract”) to perform
the QA tasks required by the Contract. (Id. ¶
20). The duties of RK&K under the QA Subcontract were
further elaborated in a Construction Quality Assurance Plan
(“QA Plan”), prepared by RK&K and approved by
both English and VDOT. (Id. ¶ 21).
Contract required English to design and construct a
replacement bridge, known as “Bridge B603, ” for
the existing and newly constructed lanes of I-81 Northbound
in Rockbridge County. (Id. ¶ 30). RK&K,
through the actions or omissions of its QA Manager, failed to
correctly perform its QA duties by (1) failing to conduct
proper inspections; (2) approving noncompliant conditions;
and (3) failing to comply with requirements of the QA Manager
for field changes. (Id. ¶ 36). These breaches
led to VDOT's rejection of the B603 Stage 1 bridge deck
following its construction. (Id. ¶ 38).
March 13, 2013, VDOT issued a Notice of Non-Conforming Work
with regard to the Stage 1 B603 deck. (Id. ¶
46). English received second and third Notices of
Non-Conforming Work on April 1, 2013, and April 5, 2013,
respectively. (Id. ¶ 47). English hired
consultants to analyze the Stage 1 bridge and met multiple
times with VDOT to negotiate, but VDOT refused to accept the
Stage 1 bridge. (Id. ¶¶ 45, 48).
August 2013, VDOT gave a final directive to remove and
replace the deck on the Stage 1 bridge, and English complied
with this order. (Id. ¶¶ 49-50). Following
demolition and reconstruction, the B603 bridge was completed
on December 21, 2013. (Id. ¶ 53). On February
4, 2016, VDOT executed Work Order 3 with English, which
resolved all other outstanding issued between VDOT and
English. (Id. ¶ 56). Work Order 3 increased the
contract price and reduced previous assessment of liquidated
damages and disincentives, but it stated that “[n]o
adjustment in the contract price or time of performance shall
be made for the B603 Stage 1 Demolition and Reconstruction
demolition and reconstruction led English to incur additional
costs for engineering design, structural and geotechnical
analyses, liquidated damages, and disincentive fees.
(Id. ¶¶ 54-55). English has calculated its
total damages due ...