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Black & Veatch Corporation v. Modesto Irrigation District

January 9, 2012

BLACK & VEATCH CORPORATION,
PLAINTIFF,
v.
MODESTO IRRIGATION DISTRICT,
DEFENDANTS.
MODESTO IRRIGATION DISTRICT,
COUNTERCLAIMANT,
v.
BLACK & VEATCH CORPORATION, COUNTERDEFENDANT.



The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge

ORDER ON MOTION TO DISMISS COUNTERCLAIM (DOC 63) AND RELATED CROSS-ACTIONS.

I. INTRODUCTION.*fn1

Counterclaimant In Intervention, City of Modesto ("the City") filed its Counterclaim, naming as Counterdefendant, Black & Veatch Corporation ("B&V"). B&V moves to dismiss the the City's Counterclaim on the ground that the City's claims and requests for relief are not sufficiently pled.

II. BACKGROUND.

This action arises from the design, engineering, planning, and construction of the expansion to the existing water treatment facility, Modesto Regional Domestic Water Treatment Plant ("the Project"). Counterclaim at ¶5-7, ECF No. 26, October 19, 2011. The Modesto Irrigation District ("MID") operates the water treatment facility. With the coordination of the City, MID procured a three-part service contract ("the Contract") with B&V. Id. at ¶¶ 12, 15, 17 and 18. B&V was to provide the commercial design, engineering and construction management services for the Project. Id.at ¶ 2.

The City alleges that prior to entering into any contract with MID pertaining to Phase 2, B&V understood that the City would have a permanent beneficial interest in the output of the Project and that the treated water from Phase 2 was for the sole benefit of the City. Id. at ¶ 9. The City also alleges all negotiations of the Contract(s) were done in with in coordination with the City. Id. at ¶¶ 9, 10, 14-18.

During construction of the Project, MID and the City discovered numerous alleged defects attributable to B&V. Id. ¶ 24. Due to these construction defects and deficiencies, the Project was delayed past the contract deadline and has not yet been completed. Id. at ¶ 23.

III. STANDARD OF DECISION.

A. Motion to Dismiss.

A motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). In deciding whether to grant a motion to dismiss, the court "accept[s] all factual allegations of the complaint as true and draw[s] all reasonable inferences" in the light most favorable to the nonmoving party.

Rodriguez v. Panayiotou, 314 F.3d 979, 983 (9th Cir. 2002). To survive a motion to dismiss, 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, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (citing Twombly, 550 U.S. 556-57).

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While the standard does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). A court need not permit an attempt to amend a complaint if "it determines that the pleading could not possibly be cured by allegation of other facts." Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir.1990).

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Fed. R. Evid. 201.*fn2 See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988).

IV. DISCUSSION.

A. Breach of Contract (Claim One).

1. Legal Framework.

a. Third Party Beneficiary ...


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