Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 1 of 9

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

HANSON AGGREGATES, INC., §

§

Plaintiff, §

§

v. §

§

ROBERTS & SCHAEFER §

COMPANY, §

§ No. 3:05-CV-1883-P

Defendant. §

§

v. §

 §

HANSON AGGREGATES §

CENTRAL, INC., et al., §

§

Third Party Defendants. §

MEMORANDUM OPINION AND ORDER

Now before the Court is Plaintiff’s Motion to Dismiss Defendant’s Counterclaim and ThirdParty Action, filed June 8, 2006. Defendant filed its Response July 10, 2006, and Plaintiff replied

July 25, 2006. The Counterclaims Plaintiff asks the Court to dismiss include Count D (Fraudulent

Misrepresentation) and ¶ 46 (Fraudulent Inducement), Count E (Promissory Estoppel/Anticipatory

Breach), Count F (conversion) in part, and Count H (Declaratory Judgment). Plaintiff also seeks the

dismissal of all claims against the Plaintiff in Defendant’s Third Party Complaint. For the reasons

below, the Court hereby GRANTS IN PART and DENIES IN PART. 

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 1 of 9 PageID 1040
Hanson Aggregates (the Plaintiff), Hanson Aggregates Central, Inc. (the Third-Party Defendant), Hanson

1

Central, and Hanson West will collectively be referred to as “the Hanson parties.” Before this action was initiated,

Hanson Aggregates Central, Inc. changed its name to Hanson Aggregates, Inc. Therefore, Hanson Aggregates and

Hanson Central are the same entity. (See Pl.’s Mot. 1, n. 1.) 

Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 2 of 9

I. BACKGROUND

This case arises from Plaintiff Hanson Aggregates, Inc.’s (hereinafter “Hanson” or

“Defendant”) allegation that Defendant Roberts & Schaefer Company (hereinafter “R&S”) failed 1

to properly design and construct the New Perch Hill Facility (hereinafter “Plant”) pursuant to its July

11, 2003 Engineering, Procurement, Construction Labor, and Management Agreement (hereinafter

“Agreement”) with Hanson. (Pl.’s Mot. 1.) Hanson Aggregates Central, Inc. (hereinafter “Hanson

Central”) contracted with Roberts and Schaefer to build the Plant, (Def.’s Resp. 3.) and Hanson

Aggregates West, Inc. (hereinafter “Hanson West”) owns the land upon which the Plant has been

constructed.

According to the Contract, Hanson agreed to pay R&S up to $65,282,675 for the Plant; in

return, the Plant was scheduled to be completed and fully operational no later than December 10,

2004. (Pl.’s Mot. 1.) Hanson avers that R&S failed to complete the Plant on time because of “many

design and construction defects.” (Pl.’s Mot. 1.) R&S contends it complied with its obligations

under the Contract, and alleges that Hanson owes more than $14 million for R&S’s work

constructing the Plant. (Def. Resp. 2.) Hanson further claims that after months of waiting for the job

to be completed and the deficiencies to be remedied, Hanson terminated the Contract and removed

R&S in October 2004. Hanson says it has spent more than $8 million in corrections to the Plant’s

design and construction. (Pl.’s Mot. 2.) 

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 2 of 9 PageID 1041
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 3 of 9

Hanson originally filed on September 22, 2005 in this Court, predicating jurisdiction on

diversity of citizenship: Hanson is a Texas-based company while R&S is Delaware-based. On May

4, 2006, R&S filed the counterclaims and third-party complaints at issue in this action. Hanson now

moves to dismiss these counterclaims and third-party claims pursuant to Fed. R. Civ. P. 12(b)(6).

II. LEGAL STANDARD

Plaintiff has brought its Motion under Rule 12(b)(6), which stipulates that the movant

must prove that Defendant has brought no Counterclaim or Third-Party Complaint on which

relief can be granted. Fed. R. Civ. P. 12(b)(6). Such motions are “viewed with disfavor and . . .

rarely granted.” Fin. Acquisition Partners LP v. Blackwell 440 F.3d 278, 286 (5th Cir. 2006)

(citing Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 246 (5th Cir.1997)). Under the standard

set forth in Conley v. Gibson, a claim should not be dismissed unless it appears beyond doubt

that the plaintiff can prove no set of facts in support of his claim which would entitle him to

relief. 355 U.S. 41, 45-46 (1957). In rendering its decision, the Court must view the facts in light

most favorable to the plaintiff. Fin. Acquisition Partners LP, 440 F.3d at 286; see also,

Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164

(1993).

The Court does not address whether Plaintiff will ultimately prevail on the merits.

Johnson v. Dallas Indep. Sch. Dist., 38 F.3d 198, 199 (5th Cir. 1994). However, dismissal is

proper when “even the most sympathetic reading of [the] pleadings uncovers no theory and no

facts that would subject the present defendants to liability.” Jacquez v. Procunier, 801 F.2d 789,

791-92 (5th Cir. 1986). 

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 3 of 9 PageID 1042
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 4 of 9

III. ANALYSIS

A. Count D (Fraudulent Misrepresentation) and ¶46 (Fraudulent Inducement)

R&S claims it was induced by Hanson Central to enter into the Agreement because

Hanson Central falsely held itself out as the “owner” under the Agreement. Defendant claims

that this misrepresentation deprived it of having a “clearly definable party upon which to assert

its mechanic’s lein.” (Countercl. 38, 46.) When alleging fraud, the claimant must meet the

heightened pleading requirement of Rule 9(b): “In averments of fraud or mistake, the

circumstances constituting fraud or mistake shall be stated with particularity.” Fed. R. Civ. P.

9(b). The burden is on R&S to plead fraud with particularity, which requires specifying

fraudulent statements, identifying the speaker, identifying what the speaker stood to gain by

making the statement, stating when and where the statements were made, and explaining why the

statements were fraudulent. Williams v. WMX Techs., Inc., 112 F.3d 175, 177-78 (5th Cir. 1997). 

R&S comes nowhere close to meeting this burden in either its Counterclaim or its

Response to Hanson’s Motion to Dismiss. (See Def.’s Countercl. 14, 16; Def.’s Resp. 6-8.) First,

R&S does not identify the person who made the fraudulent statements, stating only that

“Hanson” committed the fraud. Further, the Counterclaim is devoid of any specific date or

location where the statements were made. While R&S claims that Hanson used fraudulent

statements to escape liability under the mechanic’s lien, even that allegation lacks the

particularity required by Rule 9(b), because no mention is made of any recoverable damages.

Oppenheimer v. Prudential Sec., Inc., 94 F.3d 189, 195 (5th Cir. 1996) (ruling that because

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 4 of 9 PageID 1043
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 5 of 9

plaintiff failed to provide the extent of her damages, her claim failed to meet the particularity

requirement mandated by Rule 9(b)). (Def.’s Resp. 7.) 

Therefore, Plaintiff’s Motion to Dismiss Count D (Fraudulent Misrepresentation) and 

¶46 (Fraudulent Inducement) is GRANTED WITHOUT PREJUDICE. Defendant is hereby

GRANTED LEAVE TO AMEND within 20 days from the date of this order. 

B. Count E (Promissory Estoppel/Anticipatory Breach)

R&S alleges that Hanson wrongly terminated them and thus is in breach of contract.

Defendant also brings a claim for promissory estoppel, arguing that Hanson should be estopped

from “enforcing or seeking to enforce any of the provisions of the contract. (Countercl. 39.) 

Hanson asserts that a promissory estoppel claim cannot stand where there is a valid

contract between the parties covering the matter of the dispute. (Pl.’s Mot. 10.) R&S contends,

however, that if the disputed contract is deemed unenforceable, the counterclaim lays out an

alternative argument by which it can seek relief.

Under Texas law, to state a claim for promissory estoppel, R&S must show (1) a

promise, (2) Hanson’s foreseeability of R&S’s reliance thereon, and (3) substantial reliance by

R&S to its detriment. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 152 (Tex. App.—Houston

[1st Dist.] 2005, no pet.). Assuming the contract drawn between Hanson and R&S was

determined to be unenforceable, R&S has established that it could file a claim of promissory

estoppel in the alternative. R&S’s Counterclaim sets out facts which support the above

mentioned elements to a promissory estoppel claim: (1) even if the contract was determined

unenforceable, the fact it is written and signed by the parties is evidence that a promise was

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 5 of 9 PageID 1044
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 6 of 9

made; (2) if a promise was made by Hanson to pay R&S, it is obvious that Hanson could foresee

R&S’s reliance on being paid for constructing the plant; and (3) R&S could provide proof that

they relied on said promise to their detriment. (See Def.’s Ans. 7-10.) Therefore, Plaintiff’s

Motion to Dismiss Count E (Promissory Estoppel/Anticipatory Breach) is hereby DENIED.

C. Count F (Conversion)

R&S brings a counterclaim for conversion, claiming that Hanson is holding money

belonging to it and is using those funds for its own benefit. R&S attempts to cast the 10%

retainage of the contract price that Hanson has in its possession as a bailment that can be subject

to conversion claims.

An action for the conversion of money may be brought where money is (1) delivered for

safe keeping; (2) intended to be kept segregated; (3) substantially in the form in which it is

received or an intact fund; and (4) not the subject of a title claim by the keeper. Edlund v.

Bounds, 842 S.W.2d 719, 727 (Tex. App.—Dallas 1988, writ denied) (citing Houston Nat'l Bank

v. Biber, 613 S.W.2d 771, 774-75 (Tex. Civ. App.—Houston [14th Dist.] 1981, writ ref’d

n.r.e.)). The retainage was not a conversion, because R&S did not give the money for the

retainage to Hanson for safe keeping. The purpose of the retainage is to “secure the payment of

artisans and mechanics who perform labor or service and the payment of other persons who

furnish material, material and labor, or specially fabricated material for any contractor,

subcontractor, agent, or receiver in the performance of the work.” Texas Prop. Code Ann. 

53.102 (Vernon 1995). To characterize the retainage as a bailment that was converted by

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 6 of 9 PageID 1045
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 7 of 9

Hanson is a stretch the Court is not willing to make. Therefore, Plaintiff’s Motion to Dismiss

Count F (Conversion) is GRANTED.

D. Count H (Declaratory Judgment)

In its Counterclaims, Defendant seeks Declaratory Judgment on two points. First, R&S

asks the Court to declare that it is not liable to Hanson for any tax now being charged because of

Hanson’s reclassification of various items, and second, that if the plant was considered

operational for tax purposes at the end of 2004, it was also substantially complete under the

terms of the agreement. Both of these claims will be covered at trial by the Court’s determination

in the breach of contract action. An “action for declaratory judgment will not be entertained if

there is pending, at the time it is filed, another action or proceeding between the same parties and

in which may be adjudicated the issues involved in the declaratory action.” Texas Liquor Control

Bd. v. Canyon Creek Land Corp., 456 S.W.2d 891, 895 (Tex. 1970). Also, a motion for

declaratory judgment that merely restates a party’s defenses is insufficient unless the party can

prove that there are issues of greater ramification to be resolved. Albritton Prop. v. Am. Empire

Surplus Lines, No. 3:04-CV-2531-P, 2005 WL 975423, at *3 (N.D. Tex. Apr. 25, 2005). In this

case, Defendant does not present an issue of a greater ramification. If the contract is considered

enforceable and breached, then these counterclaims will be rendered moot. Finally, R&S’s

overall potential to recover is not hindered by dismissing these Counterclaims.

Therefore, Plaintiff’s Motion to Dismiss Count H (Declaratory Judgment) is GRANTED.

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 7 of 9 PageID 1046
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 8 of 9

E. Third-Party Claims

R&S also files several third-party claims against Hanson West, including a claim seeking

foreclosure of a mechanic’s lien, breach of contract, quantum meruit/unjust enrichment,

fraudulent misrepresentation, promissory estoppel/anticipatory breach, conversion.

Under Texas law, a mechanic’s lien may only be attached to the property when the

property owner is in privity with the party who filed the lien. (See Diversified Mortg. Investors v.

Lloyd D. Blaylock General Contractor, Inc., 576 S.W.2d 794, 805 (Tex. 1978) (holding that “the

person contracting with a mechanic or a materialman must have some interest in the property,

either legal or equitable, upon which the lien may attach”). R&S has not proven that Hanson

West was in privity with Hanson Aggregates. But, there is the possibility that R&S may be able

to provide facts to show that Hanson West had a legal or equitable interest on which the lien may

attach, thereby entitling R&S to relief. Defendant should be given the right to persuade the Court

that it is due such recovery on this claim, as well as its other claims. 

Therefore, Plaintiff’s Motion to Dismiss Third Party Claims is DENIED. 

III. CONCLUSION

For the reasons stated above, the Court has reached the following conclusions:

• Plaintiff’s Motion to Dismiss Count D (Fraudulent Misrepresentation) and

¶ 46 (Fraudulent Inducement) is GRANTED. Defendant has LEAVE TO

AMEND its Counterclaim contained within Count D within 20 days of the

issuance of this order.

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 8 of 9 PageID 1047
Memorandum Opinion and Order

No. 3:05-CV-1883-P

Page 9 of 9

• Plaintiff’s Motion to Dismiss Count E (Promissory Estoppel/Anticipatory

Breach) is DENIED. 

• Plaintiff’s Motion to Dismiss Count F (Conversion) is GRANTED.

• Plaintiff’s Motion to Dismiss Count H (Declaratory Judgment) is

GRANTED.

• Plaintiff’s Motion to Dismiss Third Party Claims is DENIED.

It is so ordered.

Signed this 9 day of August 2006. th

_________________________________

JORGE A. SOLIS

UNITED STATES DISTRICT JUDGE

 

 Case 3:05-cv-01883-P Document 56 Filed 08/09/06 Page 9 of 9 PageID 1048