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Veolia Water North America - South, LLC v. City of Everglades City

United States District Court, M.D. Florida, Fort Myers Division

October 15, 2019

VEOLIA WATER NORTH AMERICA -SOUTH, LLC, a Delaware limited liability company, Plaintiff,
CITY OF EVERGLADES CITY, a Florida municipality, Defendant.



         This matter comes before the Court on Counter-Defendant Veolia Water North America - South, LLC's (VWNA) Motion to Dismiss First Amended Counterclaim (Doc. #51) filed on August 30, 2019. Counter-Plaintiff the City of Everglades City (the City) filed a Response in Opposition (Doc. #54) on September 23, 2019 and VWNA filed a Reply (Doc. #58). For the reasons set for the below, the Motion is granted with leave to amend.


         This case arises out of an operations and maintenance services contract between plaintiff VWNA and the City for water and waste treatment. Plaintiff's Complaint (Doc. #1) alleges claims for breach of contract (Count I), violation of Florida's Prompt Payment Act, Fla. Stat. § 218.70, et seq. (Count II), and unjust enrichment (Count III), but the Court previously dismissed Count III with prejudice based on sovereign immunity. (Doc. #37.) The City filed an Amended Counterclaim (Doc. #42) on June 12, 2019, alleging one count for equitable accounting. VWNA moves to dismiss for failure to state a claim.

         The Complaint sets forth the following facts: The City owns a Ground Water-Membrane Treatment Plant and a Wastewater Treatment Plant (collectively “the Treatment Plants”) located in Collier County, Florida. (Doc. #1, ¶ 7.) On or about November 7, 2017, the City entered into an agreement with VWNA, a company which operates water treatment and wastewater facilities (“the Agreement”).[1] (Id., ¶¶ 8, 11.) The Agreement required VWNA to provide construction services to operate, maintain, repair, and perform other improvements to the Treatment Plants. (Id., ¶ 11.) The Agreement expressly contemplated that VWNA would provide the necessary labor, services, and materials in connection with the operation, maintenance, and repair of the Treatment Plants for one year commencing on November 8, 2017. (Id., ¶ 12.) Thereafter, the Agreement would automatically renew for successive one-year terms unless either party cancelled the agreement in writing “no less than 120 days prior to expiration.” (Id.)

         Pursuant to Section 9.1 of the Agreement, the Agreement was automatically renewed, the initial term was extended until November 7, 2019, and VWNA made all necessary arrangements to perform under the extended Agreement. (Doc. #1, ¶ 13.) Per the Agreement, the City “agreed to compensate VWNA in twelve monthly installments” and plaintiff asserts that as a municipality and in furtherance of its financial obligations under the Agreement, the City was bound and obligated to make payments to VWNA in accordance with Florida's Prompt Payment Act, Fla. Stat. § 218.70, et seq. (Id., ¶ 14.)

         On or about September 11, 2018, the City breached the Agreement by failing to pay for services, and on or about September 28, 2018, the Agreement was terminated as a result of the City's material breach. (Doc. #1, ¶¶ 15, 16.) As of November 2018, the City owed VWNA in excess of $445, 000.00 for billed invoices, and reimbursable expenses owed under the Agreement for work and services performed through November 2018. (Id., ¶ 17.) VWNA is also owed lost profits arising out of the Agreement's extension through November 7, 2019. (Id.)

         Both parties agree that VWNA is owed money under the Agreement, but dispute the amount owed and who should calculate the damages. Indeed, the City's Amended Counterclaim for equitable accounting alleges that because the invoices under the Agreement were complicated and extensive it is not clear what amount plaintiff is owed under the Agreement and requests that the Court compel plaintiff to render an accounting of the services to an auditor. (Doc. #42, pp. 4-5.)

         Plaintiff's moves to dismiss, arguing that the equitable relief requested in the Amended Counterclaim is an attempt to circumvent plaintiff's Seventh Amendment right to a jury trial on its breach of contract claim[2] because if the City's equitable accounting claim is granted, VWNA's damages would be predetermined. VWNA also argues that the City fails to plead entitlement to an equitable accounting under Florida law.


         A motion to dismiss a counterclaim under Fed.R.Civ.P. 12(b)(6) is evaluated in the same manner as a motion to dismiss a complaint. Fabricant v. Sears Roebuck, 202 F.R.D. 306, 308 (S.D. Fla. 2001. Under Federal Rule of Civil Procedure 8(a)(2), a counterclaim 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). This obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). To survive dismissal, the factual allegations must be “plausible” and “must be enough to raise a right to relief above the speculative level.” Id. at 555. See also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010). This requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

         In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual allegations in a counterclaim as true and take them in the light most favorable to plaintiff, Erickson v. Pardus, 551 U.S. 89 (2007), but “[l]egal conclusions without adequate factual support are entitled to no assumption of truth, ” Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “Factual allegations that are merely consistent with a defendant's liability fall short of being facially plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012) (citations omitted). Thus, the Court engages in a two-step approach: “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.


         Under Florida law, “there can be grounds for an equitable accounting where the contract demands between litigants involve extensive or complicated accounts and it is not clear that the remedy at law is as full, adequate and expeditious as it is in equity.” Chiron v. Isram Wholesale Tours and Travel Ltd., 519 So.2d 1102, 1103 (Fla. 3d DCA 1988) (citing F.A. Chastain Constr. Inc. v. Pratt, 146 So.2d 910, 913 (Fla. 3d DCA 1962)). In addition, a party seeking an equitable ...

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