Peterson v. Johnston & Rhodes Bluestone Co
3:18-cv-02222
M.D. Penn.Jul 16, 2019Background
- In March 2011 Hazel V. Peterson leased a quarry to Johnston & Rhodes Bluestone Co. for $50,000 per year through March 2021; Johnston & Rhodes paid through 2016, paid only partial in 2017, and ceased operations in March 2018.
- Peterson sued Johnston & Rhodes on November 19, 2018 alleging breach of the lease and seeking unpaid lease payments plus $200,000 to close the quarry (total claimed damages $416,464.59).
- Johnston & Rhodes filed counterclaims asserting unjust enrichment and quantum meruit, alleging it improved a roadway on Peterson’s property, conferred a benefit Peterson accepted, and was not compensated.
- Peterson moved to dismiss the counterclaims under Rule 12(b)(6), arguing (among other things) that the existence of an express contract covering the parties’ relationship precludes recovery in unjust enrichment/quantum meruit.
- The court, applying Pennsylvania law and federal pleading standards, evaluated whether the roadway improvement fell within the scope of the express lease contract or instead supported quasi-contractual claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Johnston & Rhodes’ unjust enrichment and quantum meruit counterclaims survive a Rule 12(b)(6) motion | Peterson: counterclaims insufficiently pleaded and barred because an express contract governs the parties’ relationship | Johnston & Rhodes: road improvement is not addressed by the lease; it conferred a benefit and pleaded facts sufficient to state unjust enrichment/quantum meruit | Denied the motion to dismiss; claims survive at this stage because facts plausibly allege a benefit and a question exists whether the lease covers roadway improvements |
Key Cases Cited
- Chamberlain v. Giampapa, 210 F.3d 154 (3d Cir. 2000) (Erie choice-of-law principles govern diversity cases)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008) (pleading must raise reasonable expectation that discovery will reveal necessary elements)
- McTernan v. N.Y.C., 564 F.3d 636 (3d Cir. 2009) (Rule 8 requires more than conclusory assertions)
- Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429 (3d Cir. 2000) (elements of unjust enrichment/quantum meruit)
- TAP Pharma. Prods., Inc. v. Commonwealth, 885 A.2d 1127 (Pa. Commw. Ct. 2005) (unjust enrichment and quantum meruit generally arise in absence of contract)
- Philadelphia Hous. Auth. v. CedarCrestone, Inc., 562 F. Supp. 2d 653 (E.D. Pa. 2008) (express contract does not automatically bar unjust enrichment; inquiry into scope of contract is required)