Kane Enterprises v. MacGregor (USA) Inc.

IN THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 02-30432
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KANE ENTERPRISES,

Plaintiff-Appellant,

VERSUS

MacGREGOR (USA) Inc., ET AL

Defendants,

MACGREGOR (USA) INC.,

Defendant-Appellee.

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Appeal from the United States District Court
for the Eastern District of Louisiana
_________________________

February 27, 2003

Before SMITH, WIENER, and DEMOSS, I.
Circuit Judges. MacGREGOR contracted (the “prime con-
tract”) with the United States Navy to build
JERRY E. SMITH, Circuit Judge: and install large ramps on warships. The
prime contract did not oblige MacGREGOR
Kane Enterprises (“Kane”), a commercial to post a performance or payment bond under
barge operator, appeals the dismissal, under the Miller Act, 40 U.S.C. § 270a et seq.
FED. R. CIV. P. 12(b)(6), of its contract claims MacGREGOR then subcontracted (the
against MacGREGOR (USA), Inc., a naval “subcontract”) with Halter Marine (“Halter”),
contractor. Finding no error, we affirm. inter alia, to store the ramps and transport
them when the ships were ready for the ramps F.2d 440, 442 (5th Cir. 1986). Moreover, the
to be installed. Halter, in turn, sub- court may not dismiss the complaint under rule
subcontracted (the “sub-subcontract”) with 12(b)(6) “unless it appears beyond doubt that
Kane, a commercial barge operator, for the plaintiff can prove no set of facts in
delivery of the ramps. support of his claim which would entitle him to
relief.” Conley v. Gibson, 355 U.S. 41, 45-46
The parties to these contracts by and large (1957). At the same time, a plaintiff must
fulfilled their relevant obligations. The Navy plead specific facts, not mere conclusional al-
received the ramps and paid MacGREGOR in legations, to avoid dismissal for failure to state
full. MacGREGOR has paid Halter, except for a claim. Collins v. Morgan Stanley Dean Wit-
a $150,000 retainage provided for by the ter, 224 F.3d 496, 498 (5th Cir. 2000). “We
subcontract. Kane fully performed its will thus not accept as true conclusory
contractual obligation by delivering the ramps. allegations or unwarranted deductions of fact.”
Unfortunately for Kane, however, Halter filed Id. (citation omitted). Finally, the court may
for chapter 11 bankruptcy shortly after Kane review the documents attached to the motion
had delivered the ramps; Halter therefore has to dismiss, e.g., the contracts in issue here,
not paid Kane the approximately $85,000 where the complaint refers to the documents
owed to Kane under the sub-subcontract. and they are central to the claim. Id. at 498-99

Kane sued MacGREGOR in Louisiana state III.
court for contractual damages. MacGREGOR The district court believed that Kane merely
removed to the United States District Court sought to recover its contractual damages
for the Eastern District of Louisiana based on from Halter by claiming against the retainage
diversity of citizenship and moved to dismiss owed to Halter by MacGREGOR. This
for failure to state a claim upon which relief interpretation of the complaint is
can be granted. The court granted the motion, understandable. As Kane stated in the district
reasoning that Kane sought to recover from court, “Kane is pursuing an equitable lien
the retainage, a right to payment that is claim against MacGREGOR such that
property of the Halter bankruptcy estate and MacGREGOR will be ordered to pay Kane
over which the United States District Court from the $150,000 owed by MacGREGOR
for the Southern District of Mississippi, the under the contract [with Halter].” The
court in which Halter filed its petition, has retainage due to Halter from MacGREGOR,
exclusive jurisdiction under 28 U.S.C. however, is property of the Halter bankruptcy
§ 1334(e). estate. 11 U.S.C. § 541; In re Glover Constr.
Co., 30 B.R. 873 (W.D. Ky. 1983). The
II. district in which a chapter 11 petition is filed
We review de novo a dismissal under rule has exclusive jurisdiction over the property of
12(b)(6), applying the same standards as did the estate. 28 U.S.C. § 1334(e). Thus, the
the district court. Ramming v. United States, court properly dismissed the complaint,
281 F.3d 158, 161 (5th Cir. 2001). The court because the Southern District of Mississippi
must construe the complaint liberally in favor has exclusive jurisdiction over the retainage.
of the plaintiff and must take all facts pleaded
as true. Campbell v. Wells Fargo Bank, 781 Kane has not appealed this aspect of the

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ruling, but it objects that the court did not and liens cannot attach to government
consider its other claims against MacGREG- property. Blue Fox, 525 U.S. at 264.
OR. Though we agree with MacGREGOR
that Kane’s complaint primarily seeks recovery Kane also argues for a lien against the mon-
from the retainage, we disagree that Kane’s ey already paid to MacGREGOR by the Navy,
complaint did not present its other claims. We but Kane has not identified any legal or factual
construe the complaint liberally and basis for such a lien. Kane cites only two
acknowledge that it fairly raises a claim for cases, one of which, Quality Mech.
equitable lien, a third-party beneficiary claim Contractors, Inc. v. Moreland Corp., 19 F.
under the prime contract, and a quantum Supp. 2d 1169 (D. Nev. 1998), was effectively
meruit claim. Yet, none of these states a claim overruled by Blue Fox. The other, Faerber
upon which relief can be granted. Thus, we Elec. Co. v. Atlanta Tri-Com, Inc., 795 F.
affirm.1 Supp. 240 (N.D. Ill. 1992), stands for the
unremarkable proposition that the Miller Act
First, Kane has not stated a claim for an is not the exclusive remedy for a sub-
equitable lien in any appropriate fund or prop- subcontractor against a government contractor
erty. An equitable lien is a “right . . . to have if other common law remedies exist.
a demand satisfied from a particular fund or
specific property.” BLACK’S LAW DICTION- Yet, Kane does not explain how it could
ARY 934 (7th ed. 1999) (emphasis added); see possibly be entitled to an equitable lien against
also Dep’t of the Army v. Blue Fox, Inc., 525 money paid to MacGREGOR by the Navy.
U.S. 255, 262-63 (1999) (describing the Kane cites subcontract ¶ 2(e), but that
nature of an equitable lien). As we have ex- paragraph merely allows MacGREGOR to
plained, Kane cannot claim an equitable lien withhold the retainage from Halter; it does not
against the retainage in any court outside the create a basis for an equitable lien. Kane also
Southern District of Mississippi, nor can it cites subcontract ¶ 7(b), but that paragraph
claim an equitable lien in the ramps, because obviously protects MacGREGOR from
they are now property of the United States, Halter’s breach of the subcontract, not Kane
from Halter’s breach of the sub-subcontract.
Kane cursorily cites several other equally
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MacGREGOR observed, in its opening brief, irrelevant paragraphs to similar effect.
that the United States, which Kane attempted to
join as a defendant, might remain a party in the Second, Kane has not stated a claim as a
district court. If true, this fact would have de- third-party beneficiary to the prime contract.
prived us of appellate jurisdiction, because Kane “A contract ing party may stipulate a benefit
did not obtain a certificate under FED. R. CIV. P. for a third person called a third party
54(b). After supplemental briefing, however, we
beneficiary.” LA. CIV. CODE ANN. art. 1978.2
conclude that Kane never properly served the
United States under FED. R. CIV. P. 4(i). For
“Louisiana law is settled that for there to be a
purposes of appellate jurisdiction, we treat an im- stipulation pour autrui there must be not only
properly served defendant as never before the dis- a third-party advantage, but the benefit derived
trict court. Ins. Co. of N. Am. v. Dealy, 911 F.2d
1096, 1099 (5th Cir. 1990). Thus, the district
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court’s order was an appealable final judgment for The parties have assumed throughout that
which Kane did not need a rule 54(b) certificate. Louisiana law governs this case.

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from the contract by the third party may not meruit claim against MacGREGOR.
merely be incidental to the contract.” Davis “Quantum meruit is an equitable remedy
Oil Co. v. TS, Inc., 145 F.3d 305, 311 (5th founded upon the principle that no one who
Cir. 1998) (citation omitted). Further, the benefits from the labor . . . of another should
stipulation “will be found only when the be unjustly enriched at the other’s expense.
contract clearly contemplates the benefit to The doctrine operates, in the absence of a
the third person as its condition or specific contract, to infer a promise on behalf
consideration.” Id. (citation omitted). The of the person to whom the benefit is conferred
contract need not expressly identify the third to pay a reasonable sum for the services or
person, however, if the contract plainly materials furnished.” Brankline v. Capuano,
contemplates a benefit to a third person. Id. 656 So. 2d 1, 5 (La. App. 3d Cir. 1995);
accord McCarty Corp. v. Pullman-Kellogg,
Under these Louisiana standards, Kane Div. of Pullam, Inc., 751 F.2d 750, 760 (5th
does not qualify as a third-party beneficiary to Cir. 1985). In other words, quantum meruit
the prime contact’s transportation clauses. presupposes both the absence of an express
The prime contract simply states that Mac- contract and unjust enrichment of the
GREGOR will ship the ramps via “commercial defendant.
barge.” This clause hardly manifests a plain
intent to make into a third-party beneficiary an Neither element is present here. Kane has
unspecified barge operator several steps down a specific contract with Halter. Kane may be
the contracting chain. displeased that Halter filed for bankruptcy, but
its displeasure does not void the sub-
The clause does not even mention payment subcontract, and does not allow it to sue
to the operator. The surrounding clauses, MacGREGOR. Kane’s remedy is a suit for
which state other modes of transportation for breach of contract against Halter, not a
other goods, further support this reasoning. If quantum meruit claim against MacGREGOR.
Kane is a third-party beneficiary under the
commercial barge clause, then other shipping
companies would become third-party Also, MacGREGOR was not unjustly en-
beneficiaries to those clauses. Kane’s riched; it contracted with Halter, and both par-
implausible argument would erase Louisiana’s ties performed their obligations under the sub-
distinction between intended and incidental contract. Halter may have been unjustly en-
benefits and would create dozens of third- riched by its failure to pay Kane under the sub-
party beneficiaries under the prime contract.3 subcontract, but that cannot justify a quantum
meruit claim against MacGREGOR.
Finally, Kane has not stated a quantum
The judgment is AFFIRMED. All requests
for sanctions are DENIED.
3
Kane also argues that it is a third-party ben-
eficiary of the subcontract, but it does not specify
which clauses of the subcontract confer this pu-
tative benefit. We therefore deem this argument
waived for failure to brief it adequately. See FED.
R. APP. P. 28(a)(9)(A).

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