Bard Water District v. James Davey and Associates, Inc. et al, No. 3:2013cv02727 - Document 35 (S.D. Cal. 2014)
Court Description: ORDER Granting 27 Motion to Dismiss with prejudice. Signed by Judge Jeffrey T. Miller on 11/14/14. (rlu)
Download PDF
<![CDATA[
Bard Water District v. James Davey and Associates, Inc. et al Doc. 35 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 BARD WATER DISTRICT, CASE NO. 13-cv-2727 JM (PCL) ORDER GRANTING MOTION TO DISMISS WITH PREJUDICE 13 Plaintiff, vs. JAMES DAVEY AND ASSOCIATES, INC., an Arizona corporation, and JAMES DAVEY, 14 Defendants. 10 11 12 15 16 On September 12, 2014, Defendants filed a motion to dismiss Plaintiff’s 17 third amended complaint for failure to state a claim. (Doc. No. 27.) Plaintiff filed 18 an opposition to the motion on October 14, 2014, (Doc. No. 30), and Defendants 19 filed a reply on October 21, 2014, (Doc. No. 33). Having reviewed the parties’ 20 arguments, the court finds this matter suitable for resolution on the papers without 21 oral argument pursuant to Civil Local Rule 7.1.d.1. For the reasons set forth below, 22 Defendants’ motion is granted and Plaintiff’s third amended complaint is dismissed 23 with prejudice. 24 BACKGROUND 25 According to the third amended complaint (“TAC”), Plaintiff is a public 26 water district with its principal place of operation in Winterhaven, California. 27 (Doc. No. 26 ¶ 1). Defendant James Davey and Associates, Inc. is an Arizona 28 corporation with its principal place of business in Yuma, Arizona, and James Davey -1- 13cv2727 Dockets.Justia.com 1 is an individual and an officer of James Davey and Associates, Inc. residing in 2 Arizona. (Id. ¶¶ 2–3.) 3 Plaintiff alleges that beginning in late 2002 Defendants acted as engineers 4 for Plaintiffs on a canal-improvement construction project in Imperial County 5 (“canal project” or “project”), and were responsible for the planning, engineering, 6 design, preparation of bid documents, and preparation of the contracts for the 7 project. (Id. ¶¶ 8–9.) In April 2005 Defendants prepared documents, entitled 8 “Contract Documents—Reservation Main Canal Improvement Project, Schedule I 9 (2004), Concrete Canal Lining” (“project document”), and stamped them with 10 James Davey’s seal, which indicates that he is a registered civil engineer in 11 California. (Id. ¶ 11 & Exh. A.) Plaintiff alleges that Volume II of the project 12 document “was, and is, the contract under which the Canal Project was constructed” 13 and sets forth Defendants’ authority and obligations while serving as project 14 engineer on the canal project, including the duty to supervise and inspect the work 15 of the general contractor and carry out specific testing requirements. (Id. ¶¶ 12, 21). 16 Plaintiff asserts two claims against Defendants: (1) breach of contract, and 17 (2) breach of fiduciary duty. On the first claim Plaintiff alleges that Defendants 18 “breached the agreement and their contractual duties, responsibilities, and 19 obligations of Project Engineer for the Canal Project under and pursuant to the 20 Contract by unilaterally waiving, without plaintiff’s knowledge or consent” the 21 specific testing and inspection requirements set forth in the project document, 22 and by failing to ensure that the general contractor complied with the written 23 specifications for proper preparation of the ditch lining. (Id. ¶ 23.) On the second 24 claim Plaintiff alleges that Defendants, by acting as project engineer for the canal 25 project, owed a fiduciary duty “to Plaintiff to act with utmost good faith and in the 26 best interests of Plaintiff,” separate and distinct from any contractual obligations, 27 which Defendants breached by “failing to perform the duties, responsibilities, 28 and obligations of Project Engineer memorialized in the Contract.” (Id. ¶¶ 27–31.) -2- 13cv2727 1 Plaintiff asserts that Defendants failed to disclose and concealed the breaches until 2 November 15, 2009, (id. ¶¶ 24, 30), and that the breaches resulted in widespread 3 failure of the ditch lining throughout the project and damages in excess of $ 75,000, 4 (id. ¶¶ 25, 31). Given the amount in controversy and the diversity of citizenship 5 between Plaintiff and Defendants, Plaintiff filed this action in federal court on the 6 basis of diversity jurisdiction. 7 LEGAL STANDARD 8 For a plaintiff to overcome a Rule 12(b)(6) motion to dismiss for failure 9 to state a claim, the complaint must contain “enough facts to state a claim to relief 10 that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 11 “A claim has facial plausibility when the plaintiff pleads factual content that 12 allows the court to draw the reasonable inference that the defendant is liable for 13 the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court 14 must “take all of the factual allegations in the complaint as true,” but is “not bound 15 to accept as true a legal conclusion couched as a factual allegation.” Id. (internal 16 quotation marks omitted). Factual pleadings merely consistent with a defendant’s 17 liability are insufficient to survive a motion to dismiss because they establish only 18 that the allegations are possible rather than plausible. See id. at 678–79. The court 19 should grant 12(b)(6) relief if the complaint lacks either a cognizable legal theory 20 or facts sufficient to support a cognizable legal theory. See Balistreri v. Pacifica 21 Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 22 When resolving a motion to dismiss for failure to state a claim, courts may 23 not generally consider materials outside the pleadings. See Schneider v. Cal. Dep’t 24 of Corrs., 151 F.3d 1194, 1197 n.1 (9th Cir. 1998); Jacobellis v. State Farm Fire 25 & Cas. Co., 120 F.3d 171, 172 (9th Cir. 1997); Allarcom Pay Television Ltd. v. 26 Gen. Instrument Corp., 69 F.3d 381, 385 (9th Cir. 1995). “The focus of any Rule 27 12(b)(6) dismissal . . . is the complaint.” Schneider, 151 F.3d at 1197 n.1. “A court 28 may, however, consider certain materials—documents attached to the complaint, -3- 13cv2727 1 documents incorporated by reference in the complaint, or matters of judicial 2 notice—without converting the motion to dismiss into a motion for summary 3 judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 4 5 DISCUSSION Plaintiff’s first amended complaint (“FAC”), like the third amended 6 complaint at issue here, alleged claims for breach of contract and breach of 7 fiduciary duty based on the duties purportedly set forth in the project document. 8 (Doc. No. 9.) The FAC had one attached exhibit, a copy of the approximately 9 150-page project document. (Id., Exh. A.) Defendants moved to dismiss the 10 claims in the FAC for failure to state a claim, and the court granted the motion. 11 (Doc. No. 16.) On the first claim, Plaintiff had not specifically identified which 12 provisions in the project document supported its allegations that a contract existed 13 between the parties and that Defendants had an obligation to supervise and inspect. 14 (Id. at 5.) Based on the court’s own review, the project document was not, on its 15 face, a contract between the parties. (Id. at 6–9.) It was “more akin to a bid 16 package created for the consideration of general contractors than a contract between 17 Plaintiff and the Project Engineer, much less a contract between Plaintiff and 18 Defendants.” (Id. at 6–7.) Although the document contained numerous references 19 to the “Engineer,” it did not identify Defendants as the Engineer or the project 20 engineer, and there was no language in the document suggesting a contractual 21 relationship between Plaintiff and Defendants or what specific duties and 22 obligations they may have agreed to. (Id.) On the second claim, for breach of 23 fiduciary duty, the court found that Plaintiff had adequately alleged the existence 24 of a fiduciary relationship, but the basis of Plaintiff’s claim was that Defendants 25 had failed to comply with their obligations as “Engineer” under the project 26 document, and there was nothing to suggest that Defendants owed Plaintiffs any 27 obligations pursuant to the project document. (Id. at 8–9.) Accordingly, the court 28 granted Defendants’ motion to dismiss the first amended complaint with leave to -4- 13cv2727 1 amend. (Id. at 9.) In doing so, the court advised Plaintiff that a second amended 2 complaint should “specifically refer to those document provisions which Plaintiff 3 contends (1) resulted in the formation of a contract between these parties; and 4 (2) imposed specific duties upon Defendants.” (Id.) 5 Plaintiff filed a second amended complaint (“SAC”) on May 23, 2014, 6 again asserting claims for breach of contract and breach of fiduciary duty. 7 (Doc. No. 17). In the SAC Plaintiff alleged that Defendants had “entered into 8 a contract” with Plaintiff to serve as project engineer “subject to the terms of the 9 parties’ written agreement,” and “agreed to use, and did use” the project document 10 “to memorialize the terms of their agreement.” (Id. ¶ 9). This time Plaintiff 11 identified the provisions in the project document that it asserted gave Defendants, 12 as project engineer, “the exclusive responsibility to ensure compliance by the 13 general contractor with the specifications of said contract through continuing 14 supervision and inspection of the construction of the Project in accordance with 15 the agreement’s specifications.” (Id. ¶ 11.) Plaintiff alleged that Defendants 16 manifested their assent to these terms “by stamping defendant James Davey’s seal 17 of approval on the contract documents, by undertaking the duties articulated in 18 the parties’ contract, by billing for services rendered under the contract, and by 19 accepting payment from plaintiff for services rendered pursuant to the contract.” 20 (Id. ¶ 10.) The SAC had two attached exhibits: (1) the project document, and 21 (2) copies of invoices and a check, offered to show Defendants’ billing and 22 acceptance of payment for services rendered. (Id., Exhs. A & B.). 23 Defendants moved to dismiss the SAC for failure to state a claim, and the 24 court granted the motion because Plaintiff had not remedied the deficiencies the 25 court had identified in its order dismissing the FAC. (Doc. No. 23.) Although 26 Plaintiff relied heavily on the language in the project document to allege breach, 27 the project document did not contain any specifics regarding the duties and 28 obligations agreed to by Plaintiff and Defendants, the allegations in the SAC did -5- 13cv2727 1 not clarify that aspect of their relationship, and the invoices and proof of payment 2 did not provide the missing information. (Id. at 5–6.) In dismissing the SAC with 3 leave to amend, the court advised Plaintiff that a third amended complaint should 4 “specifically reference document provisions which Plaintiff contends (1) resulted 5 in the formation of a contract between these parties, including the parties’ mutual 6 assent to the contract and the material terms of the contract; and (2) imposed 7 specific duties upon Defendants.” (Id. at 6–7.) The court advised Plaintiff that 8 “[f]ailure to do so will result in the dismissal of Plaintiff’s claims with prejudice.” 9 (Id. at 7.) 10 Plaintiff filed the instant third amended complaint (“TAC”) on August 29, 11 2014, again asserting claims for breach of contract and breach of fiduciary duty. 12 (Doc. No. 26.) In the TAC Plaintiffs allege that Defendants manifested their 13 intent to perform the obligations of project engineer “memorialized, defined, 14 and described, in writing” in the project document by stamping James Davey’s 15 seal on the document, performing the duties of project engineer outlined in the 16 document, issuing and executing change orders as project engineer, providing 17 written invoices to Plaintiff for services performed as project engineer, and 18 accepting more than $190,000 in payment. (Id. ¶ 20.) The TAC has four 19 attachments: (1) the project document, (Exh. A); (2) change orders to the general 20 contractor signed by Defendant, the contractor, and Plaintiff, offered to show that 21 Defendant was acting as project engineer, (Exh. B); (3) invoices and a copy of a 22 check, offered to show that Defendant billed Plaintiff and accepted payment for 23 its services as project engineer, (Exh. C); and (4) a summary of engineering costs 24 allegedly prepared by Defendants, offered to show that Plaintiff paid Defendants 25 $97,500 for “Feasibility/BECC Coordination/Preliminary Design and then 6 percent 26 of construction costs for all subsequent work, including construction administration, 27 inspection, and staking,” (Exh. D). Defendants again seek dismissal for failure to 28 state a claim. (Doc. No. 27.) -6- 13cv2727 1 Having reviewed the TAC, the court finds that Plaintiff has not remedied 2 the deficiencies identified in the previous orders dismissing the first and second 3 amended complaints. Plaintiff’s claims are that Defendants (1) breached the 4 contract requirements “memorialized” in the project document, (TAC ¶ 23); and 5 (2) breached their fiduciary duties toward Plaintiff by “failing to perform the duties, 6 responsibilities, and obligations of Project Engineer memorialized in the [project 7 document],” (id. ¶ 29). Both claims thus depend on the assertion that the project 8 document imposes obligations on Defendants. 9 But, as the court stated in its previous orders, the project document is not, 10 on its face, a contract between Plaintiff and Defendants. (See Doc. 16 at 7; Doc. 23 11 at 5–6.) There is nothing indicating that Plaintiff and Defendant mutually agreed 12 that their relationship was governed by its provisions. Rather, the project document 13 appears to be a design for obtaining bids from, contracting with, and supervising 14 a general contractor. And, as the court also noted previously, while the invoices 15 and change orders suggest some kind of working relationship between the parties 16 of the type ordinarily created through a written agreement, they provide no 17 information regarding Plaintiff’s obligation to pay Defendants or what specific 18 duties Defendants assumed in exchange for payment. (See Doc. 23 at 5–6 & n.4.) 19 The same is true of the summary of engineering costs, which merely lists costs 20 under headings for “Feasibility/BECC Coordination/Preliminary Design ($97,500) 21 and Final Design (at 6% of Construction Cost),” and “Construction Administration, 22 Inspection, and Staking.” (TAC, Exh. D.) Nor do the new allegations in the TAC, 23 which describe Defendants’ historical involvement in the canal project, provide 24 the missing information. 25 In sum, Plaintiff has amply alleged that Defendants provided engineering 26 services for the canal project, but it has not alleged facts from which the court can 27 reasonably infer that Plaintiff and Defendant mutually agreed that the provisions 28 in the project document were binding promises that governed their relationship. -7- 13cv2727 1 That Defendants prepared the document and performed the duties described in 2 it does not, without more, suggest mutual assent sufficient to render the project 3 document itself a binding contract. Moreover, there are no facts in the TAC tending 4 to show that Defendants’ services and Plaintiff’s payments were given in exchange 5 for the alleged promises in the project document, as opposed to whatever agreement 6 they had in the years preceding Defendants’ preparation of the project document in 7 2005. (TAC ¶ 9) (“From late 2002, Defendants acted as engineers for Plaintiff . . . 8 on the Canal Project.”). The court finds that Plaintiff has not adequately alleged 9 the existence of the contract that is the basis of its claims. 10 Plaintiff contends, however, that in ruling on Defendants’ motion to dismiss 11 the court may not consider any evidence and must consider only the allegations. 12 (Doc. No. 30 at 1.) But, as noted above, it is well established in this circuit that 13 “[w]hen a plaintiff has attached various exhibits to the complaint, those exhibits 14 may be considered in determining whether dismissal [is] proper without converting 15 the motion to one for summary judgment.” Wilhelm v. Rotman, 680 F.3d 1113, 16 1116 n.1 (9th Cir 2012); Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 17 1484 (9th Cir. 1995). The exhibits Plaintiff attached to the complaint are the only 18 evidence the court has considered in ruling on this motion. 19 Plaintiff contends also that “[g]enerally, a challenge to the existence of 20 a contract is not properly determined on a Rule 12(b)(6) motion to dismiss.” 21 (Doc. No. 30 at 5.) Plaintiff relies on Alexander v. Codemasters Grp. Ltd., 104 22 Cal. App. 4th 129 (2002), which held that “[w]here the existence and not the 23 validity or construction of a contract or the terms thereof is the point in issue, and 24 the evidence is conflicting or admits of more than one inference, it is for the jury 25 or other trier of facts to determine whether the contract did in fact exist.” Id. at 141. 26 At the 12(b)(6) stage, however, there is no issue of conflicting evidence. Rather, 27 the question is whether Plaintiff’s allegations, taken as true, are sufficient to 28 establish the essential elements of its claim. Here, the court has concluded that -8- 13cv2727 1 Plaintiff did not allege enough facts to support the inference that the parties 2 mutually agreed that the project document governed their relationship. That is 3 something the court can decide as a matter of law. See Deleon v. Verizon Wireless, 4 LLC, 207 Cal. App. 4th 800, 813 (2012) (“Although mutual consent is a question 5 of fact, whether a certain or undisputed state of facts establishes a contract is a 6 question of law for the court.”); see also Foster Poultry Farms v. Alkar-Rapidpak7 MP Equip., Inc., 868 F. Supp. 2d 983, 995–96 (E.D. Cal. 2012) (dismissing a 8 California breach-of-contract claim for failure to allege facts demonstrating 9 mutual assent). 10 Finally, Plaintiff contends that “Defendants’ fiduciary obligations . . . 11 to perform the duties, responsibilities and obligations of Project Engineer 12 memorialized in the Contract for the Canal Project, were separate, distinct, and/ 13 or in addition to any contractual obligations owed by the parties pursuant to the 14 agreement.” (TAC ¶ 28.) But, as the court noted in its order dismissing the FAC, 15 “Plaintiff has not alleged that Defendants breached a fiduciary duty of an agent to 16 a principal.” (Doc. No. 16 at 8.) Although Plaintiff alleges that “Defendants, as 17 agents to their principal, owed a fiduciary duty to Plaintiff to act with utmost good 18 faith and in the best interests of Plaintiff,” (TAC ¶ 27), Plaintiff’s claim for breach 19 of fiduciary duty is based solely on Defendants’ alleged failure to comply with 20 the specific duties of the project engineer as described in the project document. 21 Because it does not appear that Defendants owed Plaintiff any contractual 22 obligations pursuant to the project document, they cannot have breached their 23 fiduciary duty to Plaintiff by failing to comply with it. 24 The court provided Plaintiff with clear directives when it dismissed the first 25 and second amended complaints. The TAC would need to “specifically reference 26 document provisions which Plaintiff contends (1) resulted in the formation of a 27 contract between these parties, including the parties’ mutual assent to the contract 28 and the material terms of the contract; and (2) imposed specific duties upon -9- 13cv2727 1 Defendants.” (Doc. 23 at 6–7.) Referring to provisions in the project document, 2 which the court previously determined was not a contract between the parties and 3 did not provide necessary information regarding the parties’ alleged agreement, 4 and to the history of Defendants’ involvement in the project, the invoices, payment, 5 change orders, and the cost schedule, which suffer from the same defects, is 6 insufficient. Plaintiff has not adequately alleged a claim for breach of contract 7 or breach of fiduciary duty based on the provisions in the project document. 8 9 CONCLUSION For the reasons set forth above, Defendants’ motion to dismiss is GRANTED. 10 As this is the third dismissal, Plaintiff’s claims are dismissed WITH PREJUDICE. 11 The Clerk of Court is instructed to close the file. 12 IT IS SO ORDERED. 13 DATED: November 14, 2014 14 15 Hon. Jeffrey T. Miller United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 - 10 - 13cv2727
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
