CIVIL ACTION NO. 03-1812, SECTION "N" (3)
December 1, 2003
ORDER AND REASONS
Before the Court is the Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim Upon Which Relief May be Granted filed by Defendant on August 5, 2003 (Rec. Doc. No. 5). For the reasons explained herein, Defendant's motion is GRANTED IN PART and DENIED IN PART. Should Plaintiff desire to proceed further with this action, however, Plaintiff must amend its complaint in conformity with this Order within twenty (20) days from the date it is entered. In making its amendments, Plaintiff is directed to file a superceding complaint that includes the allegations in its original complaint on Which Plaintiff continues to rely, as well as Plaintiff's amendments.
BackgroundPlaintiff Fashion Plantation Estates, L.L.C. is the owner of approximately 180 acres of land located in St. Charles Parish, Louisiana, between Luling and Hahnville. In or about February 1893, a preceding owner of the same tract of land conveyed a right-of-way to the Hahnville Boutte Railroad Company to construct and maintain a railroad over the property. Defendant Union Pacific Railroad Company, a common carrier transportation company, is the successor-in-interest to the Hahnville Boutte Railroad Company. Plaintiff began developing its property into a residential subdivision in late 1997. Plaintiff began the second stage of the development, which includes the second quarter of Plaintiffs property from the south side of the railroad tracks toward Louisiana Highway 3127, in or about February 1999.
To allow public access to the southern tract of its property, Plaintiff asked Defendant, in March 1999, to allow it to upgrade the private crossing over the railroad tracks. Asserting that Defendant ultimately refused to allow it to build the public crossing and/or to build it without onerous condition, Plaintiff commenced this action on June 23, 2003. Plaintiff alleges that, although it was able to partially mitigate its damages by constructing a costly 4,300 foot roadway, part of Which crosses wetlands, it suffered significant damages as a result of Defendant's actions. In support of its request for relief, Plaintiff asserts the following causes of action in its complaint: (1) breach of contract; (2) breach of duty of good faith and fair dealing; (3) breach of right-of-way agreement; (4) detrimental reliance and/or promissory estoppel; (5) abuse of rights; and (6) conversion, appropriation and/or civil trespass. Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendant filed the motion presently before the Court, seeking dismissal with prejudice, on August 5, 2003.
Law and AnalysisRule 8(a)(2) of the Federal Rules of Civil Procedure requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." To satisfy this requirement, the statement must provide the defendant with "fair notice of what the plaintiffs claim is and the grounds upon Which it rests." Swierkiewicz v. Sorema, 534 U.S. 506, 511, 122 S.Ct. 992, 998 (2002) (internal citations omitted); see also Christopher v. Harbury, 536 U.S. 403, 416, 122 S.Ct. 2179, 2187 (2002) (the elements of the plaintiffs claim(s) "must be addressed by allegations in the complaint sufficient to give fair notice to a defendant").
Given this simplified notice pleading standard, Rule 12(b)(6) motions to dismiss are "viewed with disfavor and [are] rarely granted." Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000) (internal citations omitted). Further, a Rule 12(b)(6) motion to dismiss should be granted "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations" in the complaint. Swierkiewicz, 534 U.S. at 514, 122 S.Ct. at 998 (internal citations omitted); see also Indest v. Freeman Decorating, Inc., 164 F.3d 258, 261 (5th Cir. 1999 ("dismissal will not be affirmed if the allegations support relief on any possible theory'") (internal citations omitted). In making this determination, the Court "must accept all well-pleaded facts as true, and . . . view them in the light most favorable to the plaintiff." Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th Cir.), cert. denied, 476 U.S. 1159, 106 S.Ct. 2279 (1986), "All questions of fact and any ambiguities in the controlling substantive law must be resolved in the plaintiffs favor." Lewis v. Fresne, 252 F.3d 352, 357 (5th Cir. 2001). Finally, if the complaint "fails to specify the allegations in a manner that provides sufficient notice," a motion for more definite statement, pursuant to Rule 12(e), is appropriate. Swierkiewicz, 534 U.S. at 514, 122 S.Ct.a 1998.
I. Breach of Contract
In its complaint, Plaintiff alleges that it and Defendant entered into a contract on August 30, 1999, in Which Defendant agreed to allow Plaintiffs construction of a public crossing, "if the developer agreed to be responsible for all costs associated with constructing the crossing and the owner of the property executed a private crossing agreement with the railroad." In response, Defendant contends that no contract was confected, because the parties intended to reduce their negotiations to a written contract and a written crossing agreement was never executed. See La. Civ. Code art. 1947 ("When, in the absence of a legal requirement, the parties have contemplated a certain form, it is presumed that they do not intend to be bound until the contract is executed in that form."). Disagreeing, Plaintiff responds that an agreement with respect to construction of the public crossing was reached on August 30, 1999. The referenced written crossing agreement, on the other hand, was to address only how the public crossing would be maintained and operated, and was intended to be between Defendant and the ultimate owner of the public crossing, St. Charles Parish.
Complaint, ¶¶ 14-15, 34.
As presently stated, the allegations of Plaintiff's complaint are not sufficient to provide Defendant with fair notice of the grounds upon Which its breach of contract claim rests. Although Plaintiff's opposition memorandum suggests that it and Defendant intended that only the crossing agreement, and not the construction agreement, would be reduced to a separate, additional writing, and that the crossing agreement was to address matters not covered in the alleged August 30, 1999 construction agreement, Plaintiffs complaint does not clearly allege this. Further, to the extent that Plaintiff disagrees that execution of a written crossing agreement was a suspensive condition to the August 30, 1999 construction agreement, its complaint does not sufficiently allege this position.
Under Louisiana law, performance of a contractual obligation may be subject to a suspensive condition such that it is not enforceable unless and until that uncertain event occurs. See La. Civ. Code art. 1767 (conditional obligation is one dependent on an uncertain event; with suspensive condition, obligation may not be enforced until uncertain event occurs). In contrast, a condition is resolutory when "the obligation may be immediately enforced but will come to an end when the uncertain event occurs." La. Civ. Code art. 1767.
Indeed, the Court notes that Plaintiff alleges that "the Parish of St. Charles, to Which Fashion Plantation intended to dedicate the crossing upon its completion, would have to sign [the crossing agreement] to begin the process of upgrading the public crossing as requested by Fashion Plantation." Complaint at ¶ 16 (emphasis added).
Alternatively, if Plaintiff's contention is essentially that any condition to enforcement of the August 30, 1999 agreement was satisfied because of wrongful actions of Defendant preventing fulfillment of the condition, Plaintiff's complaint likewise is lacking on this point. For example, Plaintiffs opposition memorandum asserts that Defendant's repeated rejections of the proposed insurance binders was "without any justification." Plaintiff's complaint, however, does not contain this assertion or any factual statements that would justify such a conclusion. Additionally, Plaintiffs complaint cites Defendant's alleged unwillingness to provide it with information that "could have assisted St. Charles Parish in contacting other municipalities or insurance carriers," who purportedly had achieved the required insurance coverage. The complaint, however, does not allege that Union Pacific was not justified in refusing to release the information.
"A condition will be regarded as fulfilled when it is not fulfilled because of the fault of a party with an interest contrary to the fulfillment." See La. Civ. Code art. 1772.
Complaint at ¶ 30.
Finally, paragraph 19 of Plaintiffs complaint avers that Defendant informed it, on October 3, 2000, that Defendant had elected to work out the modified developer's agreement proposed by Plaintiff, with Ashton Plantation, rather than Plaintiff, even though Ashton's plans were not finalized and Plaintiff's development was nearly complete. Although Plaintiff's opposition memorandum suggests the Court should attribute an improper motive to Defendant from this event, Plaintiff's complaint does not make such an allegation, nor does it state why such a conclusion is warranted. Nor is it clear from Plaintiff's complaint how this particular decision had negative consequences for Plaintiffs development.
Construing Plaintiff's complaint in its favor, the Court is not certain that Plaintiff can prove no set of facts in support of its claim that would entitle it to relief. Accordingly, the Court does not grant Defendant's Rule 12(b)(6) motion to dismiss with respect to this claim, Because of the pleading deficiencies noted, however, the Court will require Plaintiff, pursuant to Rule 12(e), to amend its complaint to clarify its allegations. See Bethea v. St. Paid Guardian Ins. Co., 2002 WL 31697714, *8 (E.D. La.) (granting Plaintiff leave to amend its complaint to clarify allegations insufficient to support detrimental reliance claim). II. Breach of Duty of Good Faith and Fair Dealing
As its second cause of action, Plaintiff alleges that Defendant "breached its duty of good faith and fair dealing in connection with its agreement to allow Fashion Plantation to build a public crossing over the right-of-way." Because Defendant argues that there was no contract between it and Plaintiff, it maintains that it did not owe a duty of good faith and fair dealing to Plaintiff. In any event, Defendant argues that the actions in question must be "intentionally malicious" to establish a breach of that duty; that Plaintiff has not alleged Defendant's action were intentionally malicious; and that Plaintiff has not pled specific facts demonstrating intentional maliciousness. Although Plaintiff argues that its allegations with respect to this claim are sufficient, it also offers to amend its compliant, if the Court should find amendment necessary.
Complaint at ¶ 37.
For purposes of evaluating a claim under the Louisiana Civil Code, the Fifth Circuit has defined "bad faith" in the following manner:
The opposite of "good faith," generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties but by some interested or sinister motive. The term bad faith means more than mere bad judgment or negligence, it implies the conscious doing of a wrong for dishonest or morally questionable motives.See Industrias Magromer Cueros Y Pieles, S.A. v. Louisiana Bayou Furs, Inc., 293 F.3d 912, 922 (5th Cir. 2002) (quoting Bond v. Broadway, 607 So.2d 865, 867 (La.App. 2 Cir. 1992), writ denied, 612 So.2d 88 (La. 1993). Applying this standard, and recognizing that Defendant's duty of good faith arises from the alleged August 1999 agreement, the Court finds Plaintiff's allegations regarding this cause of action to suffer from much the same deficiencies as its breach of contract claim. Accordingly, amendment of Plaintiffs complaint with respect to this claim also is necessary.
III. Breach of Right-of-Way Agreement
Plaintiff's third cause of action asserts that Defendant breached the terms of the right-of-way agreement entered into by Defendant's and Plaintiff's predecessors-in-interest, Plaintiff's complaint, however, does not provide fair notice of the relevant terms of that agreement, much less how they were violated. Although the Court does not find dismissal of this claim to be appropriate at this juncture, it will require Plaintiff to amend its complaint to provide sufficient allegations regarding this claim, if Plaintiff intends to pursue the claim further.
Complaint at ¶ 40.
IV. Detrimental Reliance and/or Promissory Estoppel
Plaintiff additionally contends that it is entitled to damages from Defendant under a theory of detrimental reliance/promissory estoppel. Specifically, it alleges that, "by agreeing to allowing Fashion Plantation to build a public railroad crossing . . . Union Pacific knew or should have known that its promise would induce Fashion Plantation to rely on it to its detriment." Plaintiff additionally contends that "it reasonably relied on Union Pacific's agreement to allow the public crossing, thereby incurring significant damages."
Id. at ¶ 44.
In support of its motion to dismiss, Defendant argues that Plaintiff cannot, as a matter of law, state a claim for detrimental reliance, because there can be no reasonable reliance when the parties agreed to reduce their agreement to writing and a writing (undisputedly) was not executed. Additionally, Defendant maintains that Plaintiff has admitted that Defendant's alleged offer was contingent on the execution of a crossing agreement and, because no agreement was ever signed, Plaintiff cannot plead reasonable reliance as a matter of law. Finally, Defendant additionally asserts that Plaintiff in fact did not rely on Defendant's alleged August 12, 1999 offer, because it alleged that it began development of the area "in or around February 1999."
Addressing Defendant's last argument first, and reading paragraphs 9 and 14 of the Plaintiff's Complaint together, the Court finds Plaintiff's allegations to sufficiently allege that it in fact took some action in reliance on the parties' August 1999 correspondence in addition to that occurring in February 1999. With respect to Defendant's first and second arguments, the Court is mindful of its obligation to resolve all questions of fact and any ambiguities in the law in Plaintiff's favor. Given this duty, the Court does not find, at least at this juncture, that the absence of a written crossing agreement precludes a claim of detrimental reliance as a matter of law. Compare Breaux v. Schlumberger Offshore Servs., 817 F.2d 1226, 1231 (5th Cir. 1987) (it was reasonable for Plaintiff to believe, for purposes of detrimental reliance claim, that Defendant ultimately would execute written agreement); see also Haring v. Stinson, 756 So.2d 1201, 1204-05 (La.App. 2 Cir. 2000) (although Plaintiff's reliance on representations, prior to written agreement being reached, arguably was premature, it was reasonable under the circumstances); Carter v. Huber Heard, Inc., 657 So.2d 409, 412 (La.App. 3 Cir. 1994), writ denied, 661 So.2d 471 (La. 1995) (reasonableness of reliance, in absence of written contract contemplated by parties, was question of fact). If Defendant believes it appropriate to do so, it may re-urge dismissal of this claim in a later, properly supported motion.
On the other hand, the Court does not find the allegations in Plaintiff's complaint to adequately apprise Defendant of the basis for its assertion that its reliance on the August 1999 agreement was reasonable. Hence, amendment pursuant to Rule 12(e) is necessary.
V. Abuse of Rights
Paragraph 47 of Plaintiffs petition states:
Union Pacific is liable to Fashion Plantation for abusing the rights it possesses or believes it possesses by refusing to allow Fashion Plantation to build the public crossing on its own land without any legal authority. Union Pacific's actions illustrated above were performed for the sole purpose of exercising rights it has or thinks it possesses simply for the sake of exercising these rights and to harm Fashion Plantation.
Both parties construe this provision of Plaintiff's complaint to attempt to state a cause of action under Louisiana's abuse of rights doctrine. The parties have identified four situations to Which that doctrine has been recognized to apply:
1. If the predominant motive for it was to cause harm;
2. Absent proof of an intent to harm, if there was no serious or legitimate interest in the exercise of the right worthy of judicial protection;
3. If the exercise of the right is against moral rules, good faith, or elementary fairness; or
4. If the holder of the right exercised the right for a purpose other than that for Which the right was granted.See Illinois Cent. Gulf. Railroad Co. v Int'l Harvester Co., 368 So.2d 1009, 1014 (La. 1979).
Defendant argues that Plaintiff's assertion that Defendant acted "for the sole purpose of exercising rights it has or thinks it possesses simply for the sake of exercising these rights and to harm Fashion Plantation" at most implicates the first situation identified above. Even so, Defendant argues Plaintiff's complaint is devoid of any supporting factual assertions. To the contrary, asserts Defendant, Plaintiff's complaint indicates "the crossing agreement broke down for other reasons, primarily over insurance," and that the parties simply were unable to resolve their differences. Disagreeing, Plaintiff argues, in its opposition memorandum, that all four situations may apply here.
Complaint at ¶ 47.
Plaintiff's Opposition Memorandum at 6.
The nature of and grounds for Plaintiff's abuse of rights claim are not made sufficiently clear in its complaint. To the extent that Plaintiff contends Defendant intended to cause it harm, or that its actions were in bad faith, unreasonable, or otherwise resulted in the servitude being used for an unauthorized purpose, Plaintiffs allegations — particularly with respect to Defendant's rejection of Plaintiff's insurance proposals, Defendant's failure to provide information to assist Plaintiffs efforts to obtain the required insurance coverage, and Defendant's actions regarding Ashton Plantation — require further elaboration. This is true for the same reasons that Plaintiff's breach of contract and breach of duty of good faith and fair dealing claims require amendment.
On the other hand, if Plaintiffs position is that Defendant's imposition of any conditions or restrictions on Plaintiffs construction of a public crossing violates Louisiana's code articles and jurisprudence regulating servitudes, the Court will not, on the showing made by Defendant, rule that Plaintiff cannot establish such a claim as a matter or law. Pursuant to Rule 12(e), however, the Court shall require Plaintiff to amend its complaint to clarify the nature of and basis for its alleged cause of action on this ground.
As with Plaintiff's detrimental reliance claim, this determination is without prejudice to Defendant's right to re-urge dismissal of this claim in a properly supported motion later in this proceeding.
VI. Conversion, Appropriation and/or Civil Trespass
Conversion is "the commission of a wrongful act of dominion over the property of another in denial of or in a manner inconsistent with the owner's rights." See Junior Money Bags, Ltd. v. Segal, 970 F.2d 1, 11 (5th Cir. 1992). The Court finds Plaintiffs allegations regarding this claim, particularly with respect to the alleged "wrongful act," to suffer from the same problems as its efforts to assert an abuse of rights claim. Thus, the Court will treat Plaintiffs conversion claim in the same manner that it treated the abuse of rights claim.
Neither party has addressed the legal basis for an "appropriations" claim or explained how it differs, if at all, from Plaintiffs conversion claim. Accordingly, the Court's ruling on the conversion claim also applies to the appropriations claim. Should either party believe a different approach to be appropriate, that party is free to urge the Court to do so by properly supported motion.
Purporting to assert a claim for "civil trespass," Plaintiff indicates that Louisiana law defines civil trespass as "the unlawful physical invasion of the property of another." See Terre Awe Boeufs Land Co. v. J. R. Gray Barge Co., 803 So.2d 86, 94 (La.App. 4 Cir. 2001)). Because the Court finds that Plaintiff has not and cannot allege a physical invasion of its property, the Court grants Defendant's motion to dismiss this claim. Further, because the Court believes any efforts to amend its allegations will be futile, the Court will not grant Plaintiff leave to amend its allegations regarding this claim.
As stated herein, Defendant's Rule 12(b)(6) motion to dismiss is GRANTED IN PART AND DENIED IN PART. All amendments required by the Court must be submitted within twenty (20) days from the date this Order is entered. Additionally, the allegations in its original complaint on Which Plaintiff continues to rely and Plaintiff's amendments are to be submitted in the form of a single superceding complaint.