Genz-Ryan Plumbing & Heating Co. v. Weyerhaeuser NR Co.
352 F. Supp. 3d 901
| D. Me. | 2018Background
- Weyerhaeuser discovered formaldehyde emissions from a product and hired BlueSky to remediate; BlueSky subcontracted Genz-Ryan to perform remediation in Minnesota homes beginning December 7, 2017.
- Genz-Ryan alleges two agreements: a December 7, 2017 Oral Agreement (accelerate schedule in exchange for payment of past/continued costs, lost opportunities and profits) and a December 14, 2017 Indemnification and Release Agreement (pay costs and indemnify Genz-Ryan for Product-related expenses).
- Genz-Ryan claims it performed under the accelerated schedule but Weyerhaeuser failed to pay $5,056,518.10 (as of Jan. 11, 2018) and sued for breach of contract, promissory estoppel, and unjust enrichment.
- Weyerhaeuser removed to federal court, counterclaimed for declaratory relief (arguing the Indemnification Agreement subsumes prior negotiations and bars extra-contractual claims), and moved to dismiss the equitable claims under Rule 12(b)(6).
- Genz-Ryan moved for Rule 11 sanctions against Weyerhaeuser; Weyerhaeuser cross-urged that Genz-Ryan’s sanctions motion was itself sanctionable.
- The district court denied Weyerhaeuser’s motion to dismiss Counts II (promissory estoppel) and III (unjust enrichment/quantum meruit) and denied both parties’ requests for Rule 11 sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether promissory estoppel claim must be dismissed because a contract governs | Genz‑Ryan may plead promissory estoppel as an alternative; alleged promise to pay lost opportunities/profits supports estoppel | Weyerhaeuser: enforceable contract precludes promissory estoppel and the Indemnification Agreement subsumes prior promises | Denied dismissal: promissory estoppel plausibly pled in alternative because (1) indemnification agreement may not cover lost profits promises and (2) validity/scope of Oral Agreement is disputed |
| Whether unjust enrichment/quantum meruit claim must be dismissed due to existing contract | Genz‑Ryan: may plead unjust enrichment alternatively; alleges Weyerhaeuser was unjustly enriched by unpaid services and lost opportunities | Weyerhaeuser: an enforceable contract governs so unjust enrichment is unavailable | Denied dismissal: unjust enrichment plausibly alleged and permitted as alternative pleading; existence/coverage of a controlling contract is unresolved |
| Whether Weyerhaeuser’s Motion to Dismiss warranted Rule 11 sanctions | N/A (Genz‑Ryan sought sanctions) | Weyerhaeuser contends its motion was legally grounded and thus not frivolous | Denied: Weyerhaeuser cited sufficient authority to avoid sanctions; Genz‑Ryan's sanctions motion also not sanctionable at this time |
| Whether court should adjudicate Weyerhaeuser’s declaratory counterclaim now | N/A | Weyerhaeuser sought declarations that the written indemnity subsumed prior negotiations and bars extra-contractual claims | Court declined to exercise jurisdiction over declaratory counterclaim at this time (Wilton discretion noted) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for complaints)
- Martens v. Minnesota Mining & Mfg. Co., 616 N.W.2d 732 (elements of promissory estoppel under Minnesota law)
- Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826 (unjust enrichment unavailable where enforceable contract applies)
- Adams v. USAA Casualty Insurance Co., 863 F.3d 1069 (objective standard for Rule 11 sanctions review)
- Wilton v. Seven Falls Co., 515 U.S. 277 (district court discretion in declaratory judgment actions)