United States District Court, E.D. North Carolina, Western Division
matter is before the court on defendant's motion to
dismiss for failure to state a claim (DE 33), third-party
defendant's motion to dismiss for lack of jurisdiction
and to compel arbitration (DE 45), and plaintiff's notice
of adoption of third-party defendant's motion to dismiss
(DE 57), which the court construes as including a motion to
compel arbitration and for voluntary dismissal of its claims
in favor of arbitration. The motions have been briefed fully,
and the issues raised are ripe for ruling. For the following
reasons, defendant's and third-party defendant's
motions are granted, and plaintiff's motion is denied.
OF THE CASE
commenced this action on May 25, 2018, and filed a first and
second amended complaint on June 29, 2018, asserting a claim
of fraud against defendant arising from plaintiff's
provision of labor and materials for the construction of a
Circle K store in Hope Mills, North Carolina (the âstoreâ).
Plaintiff asserted diversity jurisdiction, sought damages in
excess of $75, 000.00, and a trial by jury.
initially moved to dismiss the amended complaint on October
3, 2018, for failure to state a claim. Plaintiff responded in
opposition and moved for leave to file a third amended
complaint. The court allowed plaintiff to file its third
amended complaint and found moot defendant's initial
motion to dismiss.
filed the operative third amended complaint on January 28,
2019, asserting claims of breach of contract and a claim of
quantum meruit/unjust enrichment, again on the basis of
plaintiff's provision of labor and materials for the
construction of the store. Plaintiff no longer asserts a
claim of fraud. Plaintiff seeks damages in excess of $377,
357.00, and trial by jury.
filed the instant motion to dismiss on February 25, 2019, as
corrected February 26, 2019, relying upon 1) publications by
the North Carolina Licensing Board for General Contractors
and 2) an “Agreement for Construction - Lump Sum
Contract.” (DE 34-3). Defendant also filed an answer
with counterclaim for breach of contract against plaintiff,
as well as a third-party complaint for breach of contract
against third-party defendant.
counterclaim and third-party complaint, defendant asserts
that plaintiff and third-party defendant breached contracts
for the construction of the store, causing damages for
completion costs, delay costs, legal fees, and expenses. In
support thereof, defendant relies upon 1) an “Agreement
for Construction - Lump Sum Contract” with each
plaintiff and third-party defendant (DE 32-2, 32-3); 2) a
project engineer field report; 3) waiver of lien documents
and releases of liens; and 4) termination letters.
responded in opposition to defendant's instant motion to
dismiss for failure to state a claim on April 1, 2019, and
defendant filed a reply in support thereof on April 15, 2019.
In the meantime, third-party defendant filed the instant
motion to dismiss for lack of jurisdiction and motion to
compel arbitration on April 11, 2019.
consent motion of all parties, on May 20, 2019, the court
stayed all proceedings, including briefing on third-party
defendant's motion and ruling on defendant's motion
to dismiss, for 90 days to allow the parties to engage in
case returned from mediation, resulting in impasse. On August
12, 2019, defendant filed a response to third-party
defendants motion to dismiss for lack of jurisdiction and to
compel arbitration, relying upon 1) AAA Arbitration Rules, 2)
Rules of Arbitration in North Carolina courts, and 3) the
“Agreement for Construction - Lump Sum Contract”
between defendant and third-party defendant. (DE 55-2).
Third-party defendant replied in support of its motion on
August 14, 2019.
August 15, 2019, plaintiff filed the instant notice, adopting
third-party defendant's motion to dismiss and to compel
arbitration. Upon consideration thereof, on August 22, 2019,
the court entered the following text order construing the
notice as including the instant motion for voluntary
TEXT ORDER regarding plaintiff's 57 Notice of
adoption of motion to dismiss and compel arbitration. The
court construes plaintiff's notice, in part, as a motion
under Federal Rule of Civil Procedure 41(a)(2) for voluntary
dismissal of its claims in favor of arbitration of the same,
where it asserts “all of the claims of all of the
parties in this lawsuit . . . are arbitrable.” (DE57 at
5). Defendant Circle K. Stores, Inc., is DIRECTED to file a
response to plaintiff's notice, so construed, within 14
days of the date of this order.
responded to the court's text order on September 19,
2019, urging the court to find that plaintiff waived its
right to proceed to arbitration, and urging the court to
grant its motion to dismiss. Plaintiff replied to
defendant's response on September 23, 2019.
court summarizes in turn below the factual allegations in the
complaint,  the factual allegations of the third-party
complaint, and the alleged facts pertaining to the
arbitration agreements pertinent to the instant motions.
alleges that it is a limited liability company with a
principle place of business in Georgia and defendant is a
Texas corporation with principal place of business in
February 2017, Mike Raeisghasem (“Raeishghasem”),
plaintiff's owner, met with defendant's managers,
Dennis Patterson (“Patterson”) and Wes Williams
(“Williams”). Williams suggested that plaintiff
start bidding projects to build Circle K stores in North
Carolina. Raeisghasem informed Williams and Patterson,
allegedly, that “he was not a licensed general
contractor in the state of North Carolina, but that he would
look into the possibility of getting licensed.” (Compl.
10, 2017, Williams contacted Raeisghasem and asked that
plaintiff bid for the construction of the store. According to
plaintiff, Raeisghasem informed Williams that “he had
not taken any steps towards getting licensed in North
Carolina.” (Id. ¶ 10). Williams told
Raeisghasem, allegedly, that “his lack of a license was
not an issue and that he should bid the Project and apply for
his license and by the time construction started everything
would be in order.” (Id. ¶ 11).
28, 2017, plaintiff submitted a bid for construction of the
store (the “Project”). On July 11, 2017,
defendant informed plaintiff that it was the successful
bidder, and plaintiff allegedly “entered into an
‘Agreement for Construction - Lump Sum
Contract'” with defendant relating to the Project.
(Id. ¶ 14).
to entry into said contract, Raeisghasem allegedly informed
Williams that “he was still waiting on the State of
North Carolina to issue [plaintiff] a $500, 000 project limit
general contractor's license.” (Id. ¶
15). Williams allegedly told Raeisghasem that “it was
not an issue, and as long as the State issued the license
before construction began [plaintiff] would be in compliance
with North Carolina law.” (Id.).
to the complaint, defendant was “aware that [plaintiff]
was unlicensed when it signed [said contract] and that when
North Carolina ultimately issued [plaintiff's] license it
would be limited to $500, 000.” (Id. ¶
16). According to the complaint, defendant
“misrepresented the value of the [P]roject on [a]
permit application because it knew the city of Hope Mills
would not allow Raeis to pull a permit for a project valued
in excess of $500, 000.” (Id. ¶ 17).
31, 2017, the town of Hope Mills issued a building permit,
but the State of North Carolina “still had not issued
[plaintiff's] general contractor license.”
(Id. ¶ 19). Defendant allegedly “was in a
hurry to begin construction and was pressuring [plaintiff] to
get the licensing and permitting issues fixed and get started
on the work.” (Id. ¶ 20).
2017, Raeisghasem contacted his previous employer, the owner
of third-party defendant, which has an unlimited North
Carolina General Contractor's License, and contemplated
an agreement whereby third-party defendant “would pull
the permit and oversee and supervise the [P]roject on a cost
basis.” (Id. ¶ 21). Third-party defendant
allegedly “was initially hesitant about this
arrangement. However, [third-party defendant and plaintiff]
communicated the proposed agreement via email to [Patterson
and Williams].” (Id. ¶ 22). Patterson and
Williams allegedly “stated that the arrangement was a
good solution and that it would put [plaintiff and
third-party defendant] in compliance with the North Carolina
General Contractor Statute.” (Id.).
then began work on the Project. According to the complaint,
plaintiff “did good work on the store and performed its
work as agreed.” (Id. ¶ 24). After
plaintiff had “substantially completed the store,
” defendant allegedly “refused to pay it the
hundreds of thousands of dollars it owed and forced
[plaintiff] to leave the job.” (Id. ¶
25). According to the complaint, plaintiff furnished