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Southern Industrial Contractors, LLC v. Neel-Schaffer, Inc.

United States District Court, S.D. Mississippi, Southern Division

November 30, 2017

SOUTHERN INDUSTRIAL CONTRACTORS, LLC PLAINTIFF
v.
NEEL-SCHAFFER, INC.; T.L. WALLACE CONSTRUCTION, INC.; THOMPSON ENGINEERING, INC.; CH2M HILL, INC.; W.G. YATES & SONS CONSTRUCTION COMPANY; ROY ANDERSON CORP.; YATES ANDERSON, JV; QUALITY ENGINEERING SERVICES, INC.; and MISSISSIPPI DEVELOPMENT AUTHORITY DEFENDANTS

          MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART CH2M HILL, INC.'S MOTION TO DISMISS

          LOUIS GUIROLA, JR. UNITED STATES DISTRICT JUDGE.

         BEFORE THE COURT is the Motion to Dismiss [49] filed by the defendant CH2M Hill, Inc. The Motion has been fully briefed. After reviewing the submissions of the parties, the record in this matter, and the applicable law, the Court finds that the Motion to Dismiss should be granted as to Southern Industrial's contract claim against CH2M and denied as to Southern Industrial's negligence claim against CH2M.

         BACKGROUND

         The plaintiff Southern Industrial Contractors, LLC, served as the general contractor for the West Pier Facilities project at the Port of Gulfport, Mississippi. It filed this lawsuit against the project's owner, Mississippi Development Authority, as well as the project's consultants and engineers - Neel-Schaffer, Inc., CH2M, T.L. Wallace Construction, Inc., Thompson Engineering, Inc., W.G. Yates & Sons Construction Company, Roy Anderson Corp., Yates Anderson, JV, and Quality Engineering Services, Inc. Southern Industrial alleges that these defendants failed to provide notice of a large underground debris field at the project site. Southern Industrial claims it was required to excavate the debris, which made the project much more expensive and time-consuming. The defendant CH2M, has filed the present Motion to Dismiss in which it argues that it owed no duty to Southern Industrial.

         DISCUSSION

         I. STANDARD OF REVIEW

         When considering a motion to dismiss filed pursuant to Fed.R.Civ.P. 12(b)(6), the court must accept all well-pleaded facts as true and must view all facts in the light most favorable to the plaintiff. New Orleans City v. Ambac Assurance Corp., 815 F.3d 196, 199-200 (5th Cir. 2016). The complaint should be dismissed unless it pleads “enough facts to state a claim to relief that is plausible on its face.” Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[T]he complaint must allege more than labels and conclusions, a formulaic recitation of the elements of a cause of action will not do, and factual allegations must be enough to raise a right to relief above the speculative level.” Jabaco, Inc. v. Harrah's Operating Co., Inc., 587 F.3d 314, 319 (5th Cir. 2009).

         Generally, if a court considers materials outside of the pleadings, the motion to dismiss must be treated as a motion for summary judgment. Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). However, “[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim.” Id. In support of its Motion, CH2M relies on the contract for professional services that it entered into with Mississippi State Port Authority at Gulfport (MSPA). This contract is referred to in Southern Industrial's Complaint, and the contract is central to Southern Industrial's claims, because Southern Industrial claims that it is a third-party beneficiary of that contract. (Compl. at 3-4, ¶¶7, 11, ECF No. 1).[1] Therefore, this Court is permitted to review the contract without converting CH2M's Motion to Dismiss to a Motion for Summary Judgment.

         II. SOUTHERN INDUSTRIAL'S CONTRACTUAL CLAIMS

         CH2M first argues that Southern Industrial's contract claims should be dismissed, because Southern Industrial was not a third-party beneficiary of CH2M's contract with MSPA.

         “The general rule followed in other states is also consistent with Mississippi law that a party may not enforce a contract to which it is neither a party nor a third-party beneficiary.” Kleyle v. Deogracias, 195 So.3d 234, 238 (¶12) (Miss. Ct. App. 2016). “[T]o be a third-party beneficiary, the rights of the third-party must spring forth from the terms of the contract itself.” Ground Control, LLC v. Capsco Indus., Inc., 214 So.3d 232, 242 (Miss. 2017) (citing Trammell v. State, 622 So.2d 1257, 1260 (Miss. 1993)). The Mississippi Supreme Court has held that:

A person or entity may be considered a third-party beneficiary if: (1) the contract between the original parties was entered for that person's or entity's benefit, or the original parties at least contemplated such benefit as a direct result of performance; (2) the promisee owed a legal obligation or duty to that person or entity; and (3) the legal obligation or duty connects that person or entity with the contract.

Simmons Housing Inc. v. Shelton, 36 So.3d 1283, 1286 (¶ 10) (Miss. 2010). “[A] third-party beneficiary also must benefit directly from the contract. . . . A mere incidental or consequential benefit is insufficient.” Id. at 1286-87 (¶11). Unambiguous clauses that prohibit third parties from being treated as beneficiaries to the contract “must be accepted as the intent of the parties and enforced as written.” Garrett ...


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