IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

GULF COAST ASPHALT CO., L.L.C., : 

: 

Plaintiff, : 

: 

vs. : 

: 

CHEVRON U.S.A., INC., : 

: CIVIL ACTION 09-0187-CG-M 

Defendant, and : 

Third-Party Plaintiff, : 

: 

vs. : 

: 

Trifinery, Inc., : 

: 

Third-Party Defendant. : 

REPORT AND RECOMMENDATION

The Motion to Dismiss filed by Chevron U.S.A., Inc.

(hereinafter Chevron), Defendant and Third-Party Plaintiff (Doc.

57), has been referred for report and recommendation, under 28

U.S.C. § 636(b)(1)(B) and Local Rule 72.2. Jurisdiction has been

invoked in this Court under 42 U.S.C. § 6972, pursuant to

provisions of the Resource Conservation and Recovery Act

(hereinafter RCRA). After consideration, it is recommended that

Chevron’s Motion (Doc. 57) be granted.

The facts, briefly, are as follows. Plaintiff Gulf Coast

Asphalt Company, L.L.C. (hereinafter Gulf Coast) acquired

property, located in Mobile, Alabama, from Defendant Chevron

U.S.A., Inc. (hereinafter Chevron) in 1993 (Complaint, ¶¶ 9-10). 

Chevron divulged, at that time, that there had been a large spill

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of asphalt residuum on one of the purchased parcels in 1976 but

that the site had been cleaned (Complaint, ¶¶ 11-12). Years

later, while inspecting the parcel for possible construction,

Plaintiff discovered liquified viscous oil deposits, forcing the

project to be moved (Complaint, ¶¶ 14-16). 

Gulf Coast brought this action to compel Chevron “to

excavate, remove, and remediate the asphaltic contamination”

(Complaint, ¶¶ 27). Chevron subsequently filed a Third-Party

Complaint, seeking contractual indemnity, against Third-Party

Defendant Trifinery, Inc. (hereinafter Trifinery) (Doc. 53). 

Trifinery answered the complaint, asserted affirmative defenses,

and raised three counterclaims (Doc. 55). Subsequently, Chevron

filed a Motion to Dismiss Trifinery’s counterclaims against it

(Doc. 57). The Third-Party Defendant responded to the Motion

(Doc. 59) and the Third-Party Plaintiff replied (Doc. 60).

The Court notes, initially, that “[w]hen considering a

motion to dismiss, all facts set forth in the plaintiff’s

complaint ‘are to be accepted as true and the court limits its

consideration to the pleadings and exhibits attached thereto.’” 

Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir.

2000) (quoting GSW, Inc. v. Long County, 999 F.2d 1508, 1510

(11th Cir. 1993)). In order to state a claim for relief, the

Federal Rules of Civil Procedure state that a pleading must

contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The

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Conley also stated that “a complaint should not be dismissed for

failure to state a claim 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.” Conley, 355 U.S. at 45-46. The U.S.

Supreme Court has done away with this standard in Bell Atlantic

Corporation v. Twombley, 550 U.S. 544, 557-563 (2007). The Court,

nevertheless, finds Conley’s statement regarding the purpose of Rule

8(a)(2) to be useful here in deciphering the analysis necessary for

evaluating Plaintiff’s claims.

3

U.S. Supreme Court explained that the purpose of the rule was to

“give the defendant fair notice of what the plaintiff’s claim is

and the grounds upon which it rests.” Conley v. Gibson, 355 U.S.

41, 47 (1957).1 While factual allegations do not have to be

detailed, they must contain more than “labels and conclusions;”

“a formulaic recitation of the elements of a cause will not do.” 

Bell Atlantic Corporation v. Twombley, 550 U.S. 544, 555 (2007)

(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Factual

allegations must be enough to raise a right to relief above the

speculative level.” Id. (citations omitted). “Facts that are

‘merely consistent with’ the plaintiff’s legal theory will not

suffice when, ‘without some further factual enhancement [they]

stop short of the line between possibility and plausibility of

“entitle[ment] to relief.”’” Weissman v. National Association of

Securities Dealers, Inc., 500 F.3d 1293, 1310 (11th Cir. 2007)

(quoting Twombley, 550 U.S. 557) (quoting DM Research, Inc. v.

College of American Pathologists, 170 F.3d 53, 56 (1st Cir.

1999)). “Only a complaint that states a plausible claim for

relief survives a motion to dismiss.” Ashcroft v. Iqbal, — U.S.

—, 129 S.Ct. 1937, 1950 (2009) (citing Twombley, 550 U.S. at

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Because the Court finds one of those arguments convincing, it is

unnecessary to discuss all of the remaining arguments.

4

556). “Where the well-pleaded facts do not permit the court to

infer more than the mere possibility of conduct, the complaint

has alleged—but it has not ‘show[n]’—‘that the pleader is

entitled to relief.’” Iqbal, — U.S. —, 129 S.Ct. at 1950 (quoting

Fed.R.Civ.P. 8(a)(2)). As noted by the Supreme Court, Plaintiffs

must “nudge[] their claims across the line from conceivable to

plausible[; otherwise,] their complaint must be dismissed.” 

Twombly, 550 U.S. at 570. It is noted, however, that a complaint

may be dismissed, under Federal Rule of Civil Procedure 12(b)(6),

“on the basis of a dispositive issue of law.” Executive 100,

Inc. v. Martin County, 922 F.2d 1536, 1539 (11th Cir.) (citing

Neitzke v. Williams, 490 U.S. 319 (1989)), cert. denied, 502 U.S.

810 (1991).

Trifinery has brought three counterclaims against Chevron: 

(1) fraud and misrepresentation; (2) promissory fraud; and (3)

breach of contract (Doc. 55, pp. 11-14). Chevron has raised five

different arguments as to why these counterclaims should all be

dismissed (Doc. 57).2

Chevron first claims that Trifinery does not have standing

to bring these claims against it. The argument, essentially, is

that because Trifinery suffered no injury or damages, it does not

have standing to raise these counterclaims. Chevron has

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Fed.R.Civ.P. 12(b)(1) is a defense to a claim that it lacks

subject-matter jurisdiction.

4

The Court shall use the page numbers used by Chevron in its

Motion brief and reply (Docs. 57, 60) as well as Trifinery’s response

(Doc. 59), rather than the page numbers generated by the Court’s CMECF

system.

5

characterized this as a Rule 12(b)(1) issue3

 (Doc. 57, pp. 5-

11).4

 As support, Chevron has referenced a holding by the

Eleventh Circuit Court of Appeals which states as follows: 

“[T]he irreducible constitutional

minimum of standing contains three elements.” 

Lujan [v. Defenders of Wildlife], 504 U.S.

[550,] 560, 112 S.Ct. [2130,] 2136 [(1992)]. 

A plaintiff who invokes the jurisdiction of a

federal court bears the burden to show “(1)

an injury in fact, meaning an injury that is

concrete and particularized, and actual or

imminent, (2) a causal connection between the

injury and the causal conduct, and (3) a

likelihood that the injury will be redressed

by a favorable decision.” Granite State

Outdoor Adver., Inc. v. City of Clearwater,

351 F.3d 1112, 1116 (11th Cir. 2003). Each

element is “an indispensable part of the

plaintiff's case” and “must be supported in

the same way as any other matter on which the

plaintiff bears the burden of proof, i.e.,

with the manner and degree of evidence

required at the successive stages of the

litigation.” Lujan, 504 U.S. at 561, 112

S.Ct. at 2136.

CAMP Legal Defense Fund, Inc. v. City of Atlanta, 451 F.3d 1257,

1269 (11th Cir. 2006). 

While Chevron has correctly cited the law of standing, the

Court finds that it has no application in this action as

Trifinery is not the Plaintiff and has not invoked the

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Fed.R.Civ.P. 12(b)(1) is a defense that a claimant has failed to

state a claim upon which relief can be granted.

6

In this action, Alabama law controls. Erie Railroad Co. v.

Tompkins, 304 U.S. 64 (1938). Both parties agree (Doc. 57, p. 13;

Doc. 59, p. 9 n.2). 

7

“‘The elements of fraud are (1) a false representation (2) of a

material existing fact (3) reasonably relied upon by the plaintiff (4)

who suffered damage as a proximate consequence of the

misrepresentation. To prevail on a promissory fraud claim . . . , two

additional elements must be satisfied: (5) proof that at the time of

the misrepresentation, the defendant had the intention not to perform

the act promised, and (6) proof that the defendant had an intent to

deceive.’” Ex Parte Michelin North America, Inc., 795 So.2d 674, 678-

79 (Ala. 2001) (quoting Padgett v. Hughes, 535 So.2d 140, 142 (Ala.

1988)). 

8

”The elements of a breach-of-contract claim under Alabama law

are (1) a valid contract binding the parties; (2) the plaintiffs'

performance under the contract; (3) the defendant's nonperformance;

and (4) resulting damages.” Reynolds Metals Co. v. Hill, 825 So.2d

100, 105-06 (Ala. 2002) (citing State Farm Fire & Cas. Co. v. Slade,

747 So.2d 293, 303 (Ala. 1999)).

6

jurisdiction of this Court: Trifinery is involved in this action

because Chevron brought it in through a third-party complaint. 

As such, Trifinery can—and must, if it is going to—assert any

counterclaims it has against Chevron. Though Chevron may be

ultimately correct in asserting that Trifinery cannot prove an

injury or damages, that is a matter which requires consideration

of the merits of its counterclaims under Fed.R.Civ.P. 12(b)(6);5

it is not a jurisdictional matter.

Chevron next asserts that the counterclaims against it

should be dismissed because Trifinery has not sufficiently

alleged damages in those claims (Doc. 57, pp. 11-14). Under

Alabama law,6 damages are a necessary element to prove fraud7 and

breach of contract8 claims. 

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The Court notes that these paragraphs are identical except that

¶¶ 66 refers to the relocation of the tank project to Parcel C while

¶¶ 73 and 79 characterize the move as one to Parcel B.

7

In bringing its counterclaims, Trifinery has asserted

damages in the following manner: 

Trifinery and Gulf Coast Asphalt

Company, L.L.C. have suffered actual injuries

from their reliance and seek to recover

damages for: (a) lost profits from not being

able to construct the planned refinery; (b)

for the large expenses they have incurred in

having to relocate the tank project to Parcel

C; and (c) for the large cleanup costs for

the contamination on Parcel B.

(Doc. 55, ¶ 66; cf. ¶¶ 73, 79).9

The Court notes that Trifinery is not claiming damages

except in conjunction with Gulf Coast Asphalt. While Chevron

asserts that Trifinery held the property sold by Chevron for only

a day before flipping it and could not have been injured in that

short a period of time (Doc. 53, ¶ 5; Doc. 60, p. 3), Trifinery

denies—and disputes—the length of possession (Doc. 55, ¶ 6; see

Doc. 59, ¶ 14). By Trifinery’s own admission, though, it held

the property from December 1993 through June 1994, at most, and

it was the year 2002, when Gulf Coast owned the property, before

any testing was done and contamination was discovered (see Doc.

59, ¶¶ 14-15). These facts do not demonstrate damages to

Trifinery.

Trifinery has urged the Court to consider its shareholder/

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corporate parent role in allowing its counterclaims to proceed

(Doc. 59, pp. 6-8). Trifinery has asserted that Gulf Coast is

jointly owned by Trifinery and another party (Doc. 55, ¶ 25; Doc.

59, ¶ 14). After reviewing the cited authorities, however, the

Court again finds that the issue at hand is not one of standing. 

In any event, Alabama law does not allow a shareholder of a

limited liability company (hereinafter LLC) to sue on behalf of

the corporation. See Carey v. Howard, 950 So.2d 1131, 1135-36

(Ala. 2006) (LLC members cannot claim damages when LLC is

injured); see also Ala. Code § 10-12-23(b) (“All property . . .

acquired by a limited liability company by purchase or otherwise

is limited liability company property. A member has no interest

in specific limited liability company property”). In other

words, Alabama law does not allow Trifinery to sue, in its own

name, for injury to Gulf Coast.

Trifinery has also asserted that it has been injured in that

it “stands in the position of a promisee who arranged for

remediation of the property for the benefit of a subsequent,

planned subsidiary,” Gulf Coast (Doc. 59, p. 9). Chevron has

pointed to Alabama law stating that “‘[t]o recover under a

third-party beneficiary theory, the complainant must show: 1)

that the contracting parties intended, at the time the contract

was created, to bestow a direct benefit upon a third party; 2)

that the complainant was the intended beneficiary of the

contract; and 3) that the contract was breached.’” Collins, Co.

Case 1:09-cv-00187-CG-M Document 65 Filed 03/22/10 Page 8 of 10
10In Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1280 (11th Cir.

1999), the Eleventh Circuit Court of Appeals held that a U.S. District

Court “was authorized at the motion to dismiss stage to take judicial

notice of relevant public documents.”

9

Inc. v. City of Decatur, 533 So.2d 1127, 1132 (Ala. 1988)

(quoting Sheetz, Aiken & Aiken, Inc. v. Spann, Hall, Ritchie,

Inc., 512 So.2d 99, 101-02 (Ala.1987)). Chevron further points

out that Gulf Coast is listed nowhere in the Purchase and Sale

Agreement of September 30, 1993 between Chevron and Trifinery

(Doc. 57, Attachment 3) and that Gulf Coast did not even exist,

according to State records,10 until June 1, 1994 (Doc. 60,

Attachment 1). The Court finds that Trifinery’s third-party

beneficiary argument is unconvincing.

The Court finds merit in Chevron’s assertions that Trifinery

has not demonstrated that it has been injured in possessing the

property it purchased from Chevron. As such, Trifinery has not

demonstrated an essential element in its counterclaims against

Chevron. The Court cannot say that Trifinery has shown that it

is entitled to relief under Iqbal. Therefore, it is recommended

that Chevron’s Motion to Dismiss (Doc. 57) be granted and that

Trifinery’s counterclaims be dismissed.

MAGISTRATE JUDGE’S EXPLANATION OF PROCEDURAL RIGHTS

AND RESPONSIBILITIES FOLLOWING RECOMMENDATION

AND FINDINGS CONCERNING NEED FOR TRANSCRIPT

1. Objection. Any party who objects to this recommendation or

anything in it must, within fourteen days of the date of service

of this document, file specific written objections with the clerk

of court. Failure to do so will bar a de novo determination by

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the district judge of anything in the recommendation and will bar

an attack, on appeal, of the factual findings of the magistrate

judge. See 28 U.S.C. § 636(b)(1)(C); Lewis v. Smith, 855 F.2d

736, 738 (11th Cir. 1988); Nettles v. Wainwright, 677 F.2d 404

(5th Cir. Unit B, 1982)(en banc). The procedure for challenging

the findings and recommendations of the magistrate judge is set

out in more detail in SD ALA LR 72.4 (June 1, 1997), which

provides that:

A party may object to a recommendation entered by a

magistrate judge in a dispositive matter, that is, a

matter excepted by 28 U.S.C. § 636(b)(1)(A), by filing

a “Statement of Objection to Magistrate Judge’s

Recommendation” within fourteen days after being served

with a copy of the recommendation, unless a different

time is established by order. The statement of

objection shall specify those portions of the

recommendation to which objection is made and the basis

for the objection. The objecting party shall submit to

the district judge, at the time of filing the

objection, a brief setting forth the party’s arguments

that the magistrate judge’s recommendation should be

reviewed de novo and a different disposition made. It

is insufficient to submit only a copy of the original

brief submitted to the magistrate judge, although a

copy of the original brief may be submitted or referred

to and incorporated into the brief in support of the

objection. Failure to submit a brief in support of the

objection may be deemed an abandonment of the

objection.

A magistrate judge’s recommendation cannot be appealed to a

Court of Appeals; only the district judge’s order or judgment can

be appealed.

2. Transcript (applicable where proceedings tape recorded). 

Pursuant to 28 U.S.C. § 1915 and Fed.R.Civ.P. 72(b), the

magistrate judge finds that the tapes and original records in

this action are adequate for purposes of review. Any party

planning to object to this recommendation, but unable to pay the

fee for a transcript, is advised that a judicial determination

that transcription is necessary is required before the United

States will pay the cost of the transcript.

DONE this 22nd day of March, 2010.

s/BERT W. MILLING, JR. 

UNITED STATES MAGISTRATE JUDGE

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