Opinion
Civil Action No. 02-2593-GTV.
June 17, 2004
MEMORANDUM AND ORDER
The court has under consideration the third motion to dismiss (Doc. 108) filed by Defendants JDN Real Estate, JDN Realty Corporation, JDN Development Company, Belle Meade Acquisition Corporation, and Developers Diversity Realty Corporation. Plaintiff Terra Venture, Inc. ("Terra Venture") originally brought this breach of contract suit against Defendants. The case arises out of two written agreements between Plaintiff Terra Venture and Defendant JDN Real Estate relating to the development of a 100-acre tract of undeveloped land
Pursuant to the court's order of March 26, 2004, Plaintiff Terra Venture filed its Second Amended Complaint, adding Terra Venture Realty Inc. ("TV Realty") as a co-plaintiff. In the Second Amended Complaint, Plaintiff TV Realty has asserted claims for breach of contract (Count I) and quantum meruit (Count VI) for allegedly lost commissions in connection with the development project.
The court has previously recounted the relevant facts of this case in Terra Venture, Inc. v. JDN Real Estate, No. 02-2593-GTV, 2003 WL 21003504 (D. Kan. Apr. 24, 2003), and will not repeat them here. For the following reasons, the court denies Defendants' motion to dismiss Plaintiff TV Realty's claims under Counts I and VI (Doc. 108).
I. STANDARD FOR JUDGMENT
Defendants move to dismiss Plaintiff TV Realty's claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted.
A Rule 12(b)(6) motion to dismiss will be granted only if it appears beyond a doubt that the plaintiff is unable to prove any set of facts entitling him to relief under his theory of recovery. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). "All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true." Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. 1984). The court must view all reasonable inferences in favor of the plaintiff, and the pleadings must be liberally construed. Id.; Fed.R.Civ.P. 8(f). The issue in reviewing the sufficiency of a complaint is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support his claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v. Fitzgerald, 457 U.S. 800 (1982).
II. DISCUSSION A. Quantum Meruit Claim
Defendants concede that Plaintiff TV Realty has pleaded all of the elements pertinent to a quantum meruit claim. To prove its quantum meruit claim, ultimately Plaintiff TV Realty must prove that: (1) it conferred a benefit upon Defendants; (2) Defendants appreciated or knew of the benefit; and (3) Defendants accepted or retained the benefit, making it inequitable for them to retain the benefit without compensating Plaintiff TV Realty for its value. Haz-Mat Response, Inc. v. Certified Waste Servs. Ltd., 910 P.2d 839, 847 (Kan. 1996) (citation omitted). In the Second Amended Complaint, Plaintiff TV Realty alleges as follows:
168. Valuable services were conferred upon [D]efendants by Terra Venture Realty in the form of TVR's real estate services.
169. Defendants had actual or constructive knowledge or appreciation that TVR had conferred services upon it, and that TVR sought to charge [D]efendants for the use of these services and expected to be paid for those services.
170. Defendants accepted, retained and used TVR's services, and it would be inequitable for [D]efendants to retain those benefits without paying for their value.
Despite Defendants' concession, they ask the court to dismiss Plaintiff TV Realty's claim for the following reasons:
The fatal flaw in Terra Venture Realty's allegations, at least from a standpoint of seeking recovery under a quantum meruit theory, is that these allegations fail to demonstrate that Terra Venture Realty actually conferred a benefit upon Defendants, that Defendants appreciated or knew of such a benefit, or that Defendants have retained any benefit as a result of Terra Venture Realty's alleged activities. Terra Venture Realty has failed to allege, for instance, that it actually secured certain sales or leases for Defendants' benefit and that Defendants failed to pay the commissions due thereon. . . .
Plaintiff TV Realty is not required to "demonstrate" to the court the merits of its claims at this time. Plaintiff TV Realty is only required to place Defendants on notice of such claims that it will present in later stages of litigation. See Fed.R.Civ.P. 8(a). Plaintiff TV Realty has clearly outlined the elements for quantum meruit and has met its burden at this early stage.
Defendants also question Plaintiff TV Realty's prayer for damages. The amount is identical to the actual damages sought by Plaintiff Terra Venture, instead of the amount of lost commissions, which is allegedly all Plaintiff TV Realty is seeking. The court is also confused by the disparity in numbers, but will not dismiss Plaintiff TV Realty's claim on this basis.
B. Breach of Contract
Plaintiff TV Realty alleges that Defendants breached the March 15 Sale Agreement and Fee Agreement "by not expeditiously developing the property, and by allowing excessive costs and interest to accrue." But Plaintiff TV Realty also admits that it was not a party to either written agreement; Plaintiff Terra Venture and JDN Real Estate were the sole parties to the written agreements. Defendants argue that since Plaintiff TV Realty was not a party to the written agreements, it cannot state a claim against Defendants for breach of contract. The court disagrees.
Kansas recognizes implied-in-fact contracts where the facts and circumstances show that there is a mutual intent to form a contract. See Mai v. Youtsey, 646 P.2d 475, 479 (Kan. 1982). Kansas also recognizes promissory estoppel as a means of recovery when a party relies to its detriment on another party's conduct in a contractual relationship. See Glasscock v. Wilson Constructors, Inc., 627 F.2d 1065, 1067 (10th Cir. 1980);Decatur Co-op. Ass'n v. Urban, 547 P.2d 323, 329-30 (Kan. 1976). Plaintiff TV Realty has alleged that Defendants, through their conduct with Plaintiffs, indicated that they had engaged Plaintiffs to provide services and that they would compensate them for those services. Such allegations are sufficient to survive a motion to dismiss.
IT IS, THEREFORE, BY THE COURT ORDERED that Defendants' motion to dismiss (Doc. 108) is denied.
Copies or notice of this order shall be transmitted to counsel of record.