William Insulation Company Inc v. JH Kelly LLC et al, No. 3:2021cv05083 - Document 24 (W.D. Wash. 2021)
Court Description: ORDER denying Defendant JH Kelly LLC's 16 Motion to Dismiss and granting Defendant Clearwater Paper Corporation's 18 Motion to Dismiss, signed by Judge Benjamin H. Settle. Plaintiff William Insulation Company Inc may file an amended complaint as set out herein no later than May 28, 2021. (KMC)
Download PDF
<![CDATA[
1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 WILLIAM INSULATION COMPANY INC, 9 Plaintiff, CASE NO. C21-5083 BHS ORDER ON DEFENDANTS’ MOTIONS TO DISMISS v. 10 11 JH KELLY LLC; and CLEARWATER PAPER CORPORATION, 12 Defendants. 13 14 15 16 17 18 This matter comes before the Court on Defendant JH Kelly, LLC’s (“JHK”) motion to dismiss, Dkt. 16, and Defendant Clearwater Paper Corporation’s (“Clearwater”) motion to dismiss, Dkt. 18. The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby denies JHK’s motion and grants Clearwater’s motion for the reasons stated herein. I. 19 20 21 22 Clearwater, a Delaware corporation headquartered in Washington, engaged JHK, a Washington corporation headquartered in Washington, as the general contractor for construction improvements at its Lewiston, Idaho paper pulp factory. Dkt. 1, 3, 4, 9. 23 24 FACTUAL AND PROCEDURAL HISTORY ORDER - 1 1 JHK engaged Plaintiff Williams Insulation Company, Inc. (“WIC”), a Wyoming 2 corporation headquartered in Washington, as a subcontractor to perform industrial piping 3 insulation, equipment insulation, and abatement work and to erect scaffolding for the 4 project. Id., 2, 10. WIC executed a Master Subcontract agreement (“MSA”), which 5 JHK drafted, an initial addendum, and a second addendum. Id., 14, 20, 22. The second 6 addendum reflected the parties’ agreement that WIC would perform the work for 7 $2,194,918.00. Id., 22. 8 9 WIC alleges that at the time it executed the addenda, the design plans for the project were not finalized, and subsequent changes in the project necessitated an 10 increased scope of work, increased its costs, and required additional manpower. Id., 23. 11 WIC submitted 43 change orders to JHK, encompassing all changed and additional work 12 on the project. Id., 28–29. WIC alleges that JHK paid only some of these orders in full, 13 even after WIC sent a formal Application and Certificate for Payment. Id., 29, 36. 14 Section 4.9 of the MSA, “Venue,” provides in part that “[i]f any suit or action is 15 filed by any party to enforce this Subcontract or otherwise with respect to the subject 16 matter of this Subcontract, this Subcontract and all Work hereunder shall be interpreted 17 under the laws of the State of Washington . . . .” Dkt. 20-2 at 7. Similarly, Section 4.11, 18 “Governing Law,” provides that “[t]he law of the State of Washington shall govern this 19 subcontract.” Id.1 20 21 22 JHK does not dispute WIC’s contention that Court may consider the MSA’s provisions without converting the motions to dismiss into motions for summary judgment, because the contracts are referenced throughout the Complaint. See Dkt. 20 at 3 n.2 (citing Walker v. Fred 1 23 24 ORDER - 2 1 WIC and JHK conducted an unsuccessful mediation over WIC’s claims for non- 2 payment. Dkt. 1, 41. WIC sued, bringing claims for breach of contract, breach of the 3 duty of good faith and fair dealing, and quantum meruit against JHK, and for unjust 4 enrichment against both JHK and Clearwater. WIC seeks damages in excess of $750,000 5 for each claim. Id., 53, 56, 62, 70. 6 On February 25, 2021, JHK moved to dismiss. Dkt. 16. JHK contends that all of 7 WIC’s claims against it are barred by WIC’s failure to comply with Idaho’s contractor 8 registration requirements. Alternatively, JHK contends that the Court should dismiss 9 WIC’s unjust enrichment and quantum meruit claims because they are incompatible with 10 its breach of contract claim and dismiss WIC’s breach of the implied duty of good faith 11 and fair dealing claims because WIC’s allegations duplicate its breach of contract claim. 12 On March 2, 2021, Clearwater also moved to dismiss. Dkt. 18. Clearwater 13 contends that WIC cannot maintain an unjust enrichment claim against it because Idaho’s 14 statutory mechanic’s lien is the exclusive remedy available. 15 On March 15, WIC responded to JHK’s motion. Dkt. 20. On March 19, 2021, JHK 16 replied. Dkt. 21. On March 22, 2021, WIC responded to Clearwater’s motion. Dkt. 22. 17 On March 26, 2021, Clearwater replied. Dkt. 23. 18 19 20 21 22 Meyer, Inc., 953 F.3d 1082, 1085 n.1 (9th Cir. 2020); Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005)). 23 24 ORDER - 3 1 2 II. DISCUSSION A. Standard on Motion to Dismiss Motions to dismiss brought under Rule 12(b)(6) of the Federal Rules of Civil 3 4 Procedure may be based on either the lack of a cognizable legal theory or the absence of 5 sufficient facts alleged under such a theory. Balistreri v. Pacifica Police Department, 901 6 F.2d 696, 699 (9th Cir. 1990). Material allegations are taken as admitted and the 7 complaint is construed in the plaintiff’s favor. Keniston v. Roberts, 717 F.2d 1295, 1301 8 (9th Cir. 1983). To survive a motion to dismiss, the complaint does not require detailed 9 factual allegations but must provide the grounds for entitlement to relief and not merely a 10 “formulaic recitation” of the elements of a cause of action. Bell Atlantic Corp. v. 11 Twombly, 550 U.S. 544, 555 (2007). Plaintiffs must allege “enough facts to state a claim 12 to relief that is plausible on its face.” Id. at 570. 13 B. 14 Choice-of-law for Claims Against JHK JHK argues that WIC cannot recover, notwithstanding the contract’s choice of 15 Washington law, because WIC violated Idaho law when it provided construction services 16 in Idaho without registering there as a contractor. WIC counters that the contract selects 17 Washington law, and Washington law permits its claim. The Court must determine 18 whether there is an actual conflict of laws and, if so, whether the MSA’s choice-of-law 19 provision, selecting Washington law, is effective. 20 “‘When parties dispute choice of law, there must be an actual conflict between the 21 laws or interests of Washington and the laws or interests of another state before 22 Washington courts will engage in a conflict of laws analysis.’” Erwin v. Cotter Health 23 24 ORDER - 4 1 Ctrs., 161 Wn.2d 676, 692 (2007) (quoting Seizer v. Sessions, 132 Wn.2d 642, 648 2 (1997)). “If the result for a particular issue ‘is different under the law of the two states, 3 there is a real conflict.’” Id. (quoting Seizer, 132 Wn.2d at 648). 4 Washington law provides that every contractor shall register, and it is a gross 5 misdemeanor for any contractor to “[a]dvertise, offer to do work, submit a bid, or 6 perform any work as a contractor without being registered as required by this chapter.” 7 RCW 18.27.020. It further provides that contractors may not “bring or maintain any 8 action in any court of this state” for payment or breach of contract without proving they 9 were properly registered. RCW 18.27.080. However, the Washington Supreme Court 10 held that this provision does not bar suits by subcontractors against prime contractors 11 because it is intended to protect the public rather than other contractors. Bremmeyer v. 12 Peter Kiewit Sons Co., 90 Wn.2d 787, 791 (1978) (“we are convinced that the legislature 13 did not intend to protect prime contractors from actions initiated by unregistered 14 subcontractors.”). 15 The Idaho Contractor Registration Act (“ICRA”) provides in relevant part that: 16 No person engaged in the business or acting in the capacity of a contractor, unless otherwise exempt, may bring or maintain any action in any court of this state for the collection of compensation for the performance of any act or contract for which registration is required by this chapter without alleging and proving that he was a duly registered contractor, or that he was otherwise exempt as provided for in this chapter, at all times during the performance of such act or contract. 17 18 19 20 Idaho Code § 54-5217(2). Unlike Washington, the Idaho Supreme Court held that this 21 registration requirement bars claims against all categories of defendants. Stonebrook 22 Constr., LLC v. Chase Home Fin., LLC, 277 P.3d 374, 377–78 (Idaho 2012). If Idaho law 23 24 ORDER - 5 1 applies, WIC’s claim is barred because WIC did not register as a contractor in Idaho. If 2 Washington law applies, WIC’s claim may go forward because it is a suit by a 3 subcontractor against a prime contractor. Bremmeyer, 90 Wn.2d at 791. Therefore, an 4 actual conflict exists. 5 Next, the Court considers whether the parties’ choice-of-law provision, selecting 6 Washington law, is effective. See Erwin, 161 Wn.2d at 693. Washington follows Section 7 187 of the Restatement (Second) Conflict of Laws (1971) to resolves conflict of laws 8 issues where “the parties have made an express contractual choice of law to govern their 9 rights and duties.” Id. at 694. Restatement Section 187, Law of the State Chosen by the 10 11 12 Parties, provides: (1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue. 13 14 15 16 17 18 19 20 (2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties. 21 22 *** Restatement (Second) of Conflict of Laws § 187. 23 24 ORDER - 6 1 JHK contends that the Idaho contractor registration requirement is not something 2 the parties could have chosen to disregard with a specific provision in their contract, so 3 subsection (2)(b) applies and mandates the application of Idaho law. Dkt. 16 at 6–7. WIC 4 counters that proper analysis under that subsection would maintain the parties’ choice of 5 Washington law. Dkt. 20 at 11. 6 JHK contends that application of Washington law would be contrary to a 7 fundamental policy of Idaho. Dkt. 16 at 7. It emphasizes the Idaho Supreme Court’s 8 reliance on the Idaho legislature’s findings that “‘it is in the public interest to provide a 9 mechanism to remove from practice incompetent, dishonest, or unprincipled practitioners 10 of construction,’” and thus the legislature “adopted harsh penalties for contractors that do 11 not comply.” Stonebrook, 277 P.3d at 379–80 (quoting I.C. § 54–5202). JHK argues that 12 Idaho thus has a materially greater interest than Washington in the application of its law 13 because the work was performed there, and application of Idaho law would thus 14 appropriately penalize WIC’s failure to register. Dkt. 16 at 7–8. 15 WIC counters that the analysis should end at the first step, whether the parties’ 16 choice is contrary to a fundamental policy of a state, because the ICRA only prohibits 17 recovery “in any court of this state.” Dkt. 20 at 11. Moreover, WIC argues that as both 18 JHK and Clearwater are headquartered in Washington, Idaho’s interest in regulating 19 access to its state courts by unregistered contractors does not materially outweigh 20 Washington’s interest in regulating the business dealings of its residents (though WIC is 21 a Wyoming resident). Id. 22 23 24 ORDER - 7 1 JHK retorts that the Court should not read the “in any court of this state” language 2 to limit the ICRA’s reach to Idaho state courts for multiple reasons including that not 3 applying the ICRA would frustrate the Idaho legislature’s intent, that substantive state 4 law should apply in choice-of-law, and that Washington’s link to the parties and the 5 transaction is minor. Dkt. 21 at 5–6 (distinguishing Nelson v. Kaanapali Properties, 19 6 Wn. App. 893 (1978)). WIC’s arguments and authorities are more persuasive than JHK’s. 7 First, JHK contends that substantive state laws, even if they limit their application 8 to actions brought “in any court of this state,” should still be applied in choice-of-law 9 analysis. See Dkt. 21 at 6 (citing Bledsoe v. Crowley, 849 F.2d 639, 641 (D.C. Cir. 10 1988)). Bledsoe is distinguishable for two reasons. First, Bledsoe involved a Maryland 11 tort reform statute which provided that “an action or suit of that type may not be brought 12 or pursued in any court of this State except in accordance with this subtitle.” 849 F.2d at 13 640–41 (citation omitted). The District Court of Maryland and Maryland Court of 14 Appeals construed this limiting language as intended to exempt minor claims in state 15 district courts, rather than to intended to apply to federal courts sitting in diversity. Id. at 16 643 (citations omitted). Here, there is no such authoritative construction concluding that 17 the Idaho legislature did not intend to limit application to suits in its state courts (and the 18 legislature’s use of this language in other statutes is not to the contrary). Second and more 19 importantly, the parties in this case bargained for the application Washington law, unlike 20 the parties in Bledsoe. 21 Second, as WIC points out, the Washington Court of Appeals has applied 22 Washington law against a more directly analogous and onerous statute, even where the 23 24 ORDER - 8 1 parties’ contract did not include a Washington choice of law provision. Dkt. 20 at 10 2 (citing Nelson, 19 Wn. App. at 899–900). In Nelson, a Washington-registered contractor 3 performed construction in Hawaii for a joint venture between a Washington corporation 4 and a Hawaiian corporation. 19 Wn. App. at 894. Hawaii law provided that an 5 unregistered contractor could not recover “in a civil action,” purporting to deny the 6 plaintiff recovery in any court. Id. at 896, 899. 7 Under the “significant relationship” test (applicable absent an effective choice of 8 law by the parties), the Court of Appeals noted that generally the place of performance 9 would be the most significant contact. Id. at 897–898. However, the factors in section 196 10 and comment d of the Restatement (Second) Conflicts (1969) (evaluating whether or 11 when the local law of the state where services were rendered should not apply) indicated 12 that Washington law should apply. Id. at 898–99. Washington had a close relationship to 13 the transaction and the parties, applying Washington law would protect the parties’ 14 expectation that the construction would occur and payment be rendered, and the public 15 policy of each state (to protect the public from unreliable or unscrupulous contractors) 16 did not conflict. Id. The Court of Appeals concluded that “[t]he significance of the place 17 of contracting, the domicile and residence of the parties . . . the expectation interests of 18 the parties, and the policy of Washington in providing a forum [for a dispute primarily 19 between Washington domiciliaries] far outweigh the significance of the place of 20 performance and the public policy of Hawaii in applying its rule.” Id. at 899–900. 21 22 Here, the expectation interest of the parties is even stronger, given the choice of law in the contract. It is not clear that the fundamental policy of Idaho extends to lawsuits 23 24 ORDER - 9 1 outside its state courts, and as applied to the facts of this case, the public policy interests 2 of Washington and Idaho in regulating contractors are relatively similar. Compare Erwin, 3 161 Wn.2d at 696 (when registration law intends to protect from perils of incompetent or 4 untrustworthy practitioners, but defendant does not contend plaintiff is incompetent or 5 untrustworthy, interest of state requiring registration is not impacted) with Stonebrook, 6 277 P.3d at 379 (Idaho’s interest in imposing harsh penalties on unregistered contractors 7 is to remove from practice incompetent, dishonest, or unprincipled practitioners). And 8 JHK is a Washington corporation which drafted a contract selecting Washington law. 9 Therefore, the Court concludes that the application of Washington law is not contrary to 10 the fundamental policy of Idaho, and even if it is, Idaho does not have a materially 11 greater interest than Washington in determining whether WIC can recover under the 12 contract. See Erwin, 161 Wn.2d at 695–96 (whether state registration law bars recovery 13 under contract goes to substantial validity of parties’ agreement to pay fees, analyzed 14 under Section 187(2) of the Restatement; when the first two questions of the section are 15 answered in the negative, parties’ choice of Washington law stands). 16 JHK also argues that the contract’s choice-of-law provision does not apply to 17 WIC’s claim because the parties clearly agreed that WIC would comply with Idaho law. 18 Dkt. 21 at 3–4. JHK cites Article 6.3 of the MSA, which provides that WIC will provide 19 proof of registration within five days of execution of the subcontract and prior to starting 20 work and provides that failure to do so is grounds for termination of the subcontract. Id. 21 This is not persuasive because JHK did not and does not seek to terminate the contract 22 under this provision. Additionally, the plain language of the contract’s choice-of-law 23 24 ORDER - 10 1 provisions is not limited to contract interpretation as JHK contends—as noted, the 2 contract states that suits related “to the subject matter of this Subcontract, this 3 Subcontract and all Work hereunder shall be interpreted under the laws of the State of 4 Washington . . . .” Dkt. 20-2 at 7 (emphasis added). Similarly, the MSA’s governing law 5 provision provides that Washington law governs “this subcontract.” Id. These provisions 6 are at the very least ambiguous as to whether they limit choice-of-law to contract 7 interpretation and are thus construed against the drafter, JHK. Pierce County v. State, 144 8 Wn. App. 783, 813 (2008). 9 As the Washington Supreme Court concluded in Erwin, quoting the Washington 10 Court of Appeals, “‘the interest of the parties are best served by leaving them exactly 11 where they placed themselves—litigating this dispute in Washington’ and under 12 Washington law.” 161 Wn.2d at 700 (citation omitted). Therefore, JHK’s motion to 13 dismiss WIC’s claims on the basis of WIC’s failure to comply with the ICRA is 14 DENIED. 15 C. Breach of the Duty of Good Faith and Fair Dealing Claim Against JHK 16 WIC’s breach of the duty of good faith and fair dealing allegations, that JHK 17 failed to timely pay for additional work requested, do not go beyond its breach of contract 18 claims. JHK contends that allegations supporting a claim for breach of the duty of good 19 faith and fair dealing must “[g]enerally” go beyond what is alleged in support of a breach 20 of contract claim. Dkt. 16 at 14. However, JHK cites only authority relying on California 21 law for this proposition. Id. (citing In re Facebook, Inc. Internet Tracking Litig., 956 F.3d 22 589, 611 (9th Cir. 2020) (citing Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. 23 24 ORDER - 11 1 App. 3d 1271, 1395 (1990)); Cal Shoppers, Inc. v. Royal Globe Ins. Co., 175 Cal. App. 2 3d 1, 54 (1985)). Without Washington authority on this issue, JHK has not established 3 that WIC fails to state a claim for breach of the duty of good faith and fair dealing where 4 it alleges that JHK induced it to perform work and refused to pay. Therefore, JHK’s 5 motion to dismiss WIC’s breach of the duty of good faith and fair dealing claim is 6 DENIED. 7 D. Equitable Claims Against JHK and Clearwater 8 1. JHK 9 “Unjust enrichment is the method of recovery for the value of the benefit retained 10 absent any contractual relationship because notions of fairness and justice require it.” 11 Young v. Young, 164 Wn.2d 477, 484 (2008); see also 25 Wash. Prac., Contract Law and 12 Practice § 14:7 (citing Bircumshaw v. State, 194 Wn. App. 176 (2016) (“Restitution [the 13 remedy to prevent unjust enrichment] is not available for breach of a fully performed 14 contract when the only outstanding performance is the payment of money.”)). JHK is 15 correct that quasi-contract or implied contract claims may be alternatives to failed 16 contract existence claims like fraud in the inducement or illegality of contract, but they 17 are not alternatives to failed breach of contract claims. Wodija v. Wash. State Emps. 18 Credit Union, No. C15-5693 BHS, 2016 WL 3218832, at *4 (W.D. Wash. June 9, 2016). 19 However, WIC is correct that Federal Rule of Civil Procedure 8(d)(2) permits pleading in 20 the alternative. 21 22 If JHK concedes that in fact what is at issue is a fully performed contract where the only outstanding performance is the payment of money, then these quasi-contractual 23 24 ORDER - 12 1 claims would not be available. However, if JHK contends that extra work WIC allegedly 2 performed occurred outside the written contractual relationship, these quasi-contractual 3 claims for recovery could be available. See Mod. Builders, Inc. of Tacoma v. Manke, 27 4 Wn. App 86, 93–94 (1980) (“Quantum meruit may substitute for the contract price and 5 form the basis of total recovery only when substantial changes occur as work progresses 6 which are not covered by the original contract and which were not within the 7 contemplation of the parties when the contract was formed.”). Of course, double recovery 8 would not be permitted. Therefore, JHK’s motion to dismiss as to WIC’s unjust 9 enrichment and quantum meruit claims is DENIED. 10 2. 11 Clearwater argues that WIC has an adequate remedy at law—a mechanic’s lien— Clearwater 12 and cannot pursue its unjust enrichment claim because neither Washington nor Idaho 13 permits equitable recovery in unjust enrichment when an adequate legal remedy exists. 14 Dkt. 18 at 3. Both Washington and Idaho statutorily provide that unpaid subcontractors 15 may file a mechanic’s lien against the owner’s property to secure payment. RCW 16 60.04.011, et seq.; Idaho Code § 45-501, et seq. WIC contends that “Washington courts 17 often find that where a subcontractor seeks to recover against an owner for extra- 18 contractual work on a project, unjust enrichment is considered a legal rather than an 19 equitable claim.” Dkt. 22 at 9 (citing Auburn Mech., Inc. v. Lydig Constr., Inc., 89 Wn. 20 App. 893 (1998)). 21 However, Auburn Mechanical considered whether actions for money owed a 22 subcontractor for extra work allegedly performed, on claims not exclusive to equity, 23 24 ORDER - 13 1 entitled the plaintiff to a jury. 89 Wn.App. at 314–17. More directly analogous 2 Washington authority holds that unjust enrichment is unavailable if adequate legal 3 remedies exist. Seattle Pro. Eng’g Emps. Ass’n v. Boeing Co., 139 Wn.2d 824, 839 4 (2000), opinion corrected on denial of reconsideration, 1 P.3d 578 (2000).2 Idaho 5 similarly holds that mechanic’s liens are the exclusive remedy for subcontractors who 6 lack express contracts with owners. Great Plains Equip., Inc. v. Nw. Pipeline Corp., 970 7 P.2d 627, 641 (Idaho 1999). 8 9 WIC also argues that it has no adequate legal remedy because “a universal requirement, regardless of the state involved, is that mechanic’s lien rights can only be 10 asserted in the state and county where the property is located,” so it cannot invoke 11 Washington’s mechanic’s lien statute, and its lack of registration bars it from invoking 12 Idaho’s. Dkt. 22 at 10. However, as Clearwater points out, WIC’s inability to invoke 13 Idaho’s mechanic’s lien is a problem of its own making, which does not render the 14 statutory remedy inadequate. Dkt. 23 at 3 (citing, among others, United States v. Elias, 15 921 F.2d 870, 874 (9th Cir. 1990), overruled on other grounds by United States v. 16 Clagett, 3 F.3d 1355 (9th Cir. 1993) (“Failure to comply with a remedy at law does not 17 make it inadequate so as to require the district court to exercise its equitable 18 jurisdiction.”)). 19 20 2 21 22 WIC argues that Seattle Professional Engineering Employees Association is inapposite because it refers to a statutory remedy exclusive to employees. Dkt. 22 at 9. However, as noted, both Washington and Idaho have mechanic’s lien statutes. RCW § 60.04.011, et seq.; Idaho Code § 45-501, et seq. 23 24 ORDER - 14 1 WIC also argues that it should be able to recover in equity under Washington law 2 based on the “interrelated” nature of the contract between WIC and JHK and that the 3 contract between JHK and Clearwater extends the Washington choice-of-law provision in 4 WIC’s contract with JHK to WIC’s relationship with Clearwater. However, WIC and 5 Clearwater have no contract, and there is no basis for the Court to conclude that 6 provisions in WIC contract with JHK should be applied against Clearwater or for the 7 Court to assume a Washington choice-of-law provision exists in the contract between 8 JHK and Clearwater which WIC can somehow invoke. WIC further argues that JHK has 9 a statutory duty in both Idaho and Washington to maintain copies of its subcontractor’s 10 certificates of registration, it owed a duty to Clearwater to do so, and Clearwater should 11 not benefit from JHK’s failure. The Court agrees with Clearwater that this argument is 12 nonsensical. If JHK were indeed somehow responsible for WIC’s failure to register, that 13 would be relevant to a claim by WIC against JHK, not against Clearwater—and would 14 not make the statutory remedy any less adequate. In sum, WIC’s arguments related to the 15 contracts are unpersuasive and unsupported by authority. 16 As WIC is responsible for the inadequacy of its statutory remedy, the Court 17 concludes that a remedy in equity is not appropriate. Therefore, Clearwater’s motion to 18 dismiss WIC’s unjust enrichment claim is GRANTED. However, as it is not clear that 19 WIC’s claims against Clearwater cannot be saved by amendment, as discussed below, the 20 Court grants leave to amend. 21 22 23 24 ORDER - 15 1 E. Leave to Amend In the event the court finds that dismissal is warranted, the court should grant the 2 3 plaintiff leave to amend unless amendment would be futile. Eminence Capital, LLC v. 4 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). “[A] proposed amendment is futile 5 only if no set of facts can be proved under the amendment to the pleadings that would 6 constitute a valid and sufficient claim or defense.” Miller v. Rukoff-Sexton, Inc., 845 F.2d 7 2019, 214 (9th Cir. 1988), overruled on other grounds by Ashcroft v. Iqbal, 556 U.S. 662 8 (2009). 9 Clearwater is correct that WIC does not allege facts to support a claim that 10 Clearwater was acting as a general contractor under the Washington Contractor’s 11 Registration Act, RCW 18.27.020, such that Clearwater may be directly liable to WIC. 12 While it is not clear that WIC could make these allegations, and it would thus appear the 13 mechanic’s lien would remain an exclusive, unavailable remedy, it is not clear that “no 14 set of facts could be proved” under an amended pleading that would constitute a valid 15 claim. Miller, 845 F.2d at 214. Therefore, as leave to amend should be granted with 16 “extreme liberality,” Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 17 (9th Cir. 1990), WIC’s request for leave to amend as to this claim is GRANTED. 18 F. 19 Fees JHK and Clearwater seek fees for their motions, and WIC seeks fees for being 20 required to respond. The MSA between JHK and WIC requires that the prevailing party 21 in any dispute related to the MSA or projects completed under it receive their attorney’s 22 fees and costs. Dkt. 1, 43. While WIC is the prevailing party as to JHK’s motion, 23 24 ORDER - 16 1 neither party has yet prevailed in the dispute, so the Court finds it prudent to reserve this 2 question for later in the litigation. 3 Clearwater does not cite any authority in support of its request for fees for its 4 motion, and WIC does not cite any authority in support of its request for fees for having 5 to respond. The Court thus declines to award any. 6 7 III. ORDER Therefore, it is hereby ORDERED that JHK’s motion to dismiss, Dkt. 16, is 8 DENIED, and Clearwater’s motion to dismiss, Dkt. 18, is GRANTED. WIC may file an 9 amended complaint as set out herein no later than May 28, 2021. 10 Dated this 11th day of May, 2021. 11 12 BENJAMIN H. SETTLE United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 A ORDER - 17
]]>
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.
