United States District Court, D. Minnesota
ORDER ADOPTING REPORT AND RECOMMENDATION
WILHELMINA M. WRIGHT, UNITED STATES DISTRICT JUDGE.
matter is before the Court on the November 30, 2017 Report
and Recommendation (R&R) of United States Magistrate
Judge Leo I. Brisbois. (Dkt. 56.) The R&R recommends
denying Defendant Prairie Winds Services, LLC's motion to
dismiss Defendant Tom's Backhoe Service, Inc.'s
cross-claim for breach of contract and granting the motion to
dismiss Tom's Backhoe's cross-claim for
negligence. Both defendants filed timely objections to
the R&R. For the reasons addressed below, the Court
overrules the objections and adopts the R&R.
February 2016, Tom's Backhoe entered into a contract with
the City of Brainerd, Minnesota, to install underground
piping for utility services. Tom's Backhoe subsequently
subcontracted with Prairie Winds to perform directional
drilling on the project. Because Prairie Winds threatened to
abandon its work when Tom's Backhoe questioned whether
Prairie Winds possessed the equipment and personnel to
complete the directional drilling, Tom's Backhoe
permitted Prairie Winds to subcontract with Plaintiff Boyd
and Company, LLC. Tom's Backhoe alleges that “there
were substantial problems” with the directional
drilling work that Prairie Winds and Boyd negligently
performed. In October 2016, Boyd served a written demand for
payment on Defendant Travelers Casualty and Surety Company of
America, which had issued the payment bond on the project.
Travelers denied Boyd's claim, and Boyd subsequently
initiated this lawsuit seeking payment. Tom's Backhoe
asserted cross-claims against Prairie Winds for breach of
contract and negligence, which Prairie Winds moves to
dismiss. See Fed. R. Civ. P. 12(b)(6).
defeat a Rule 12(b)(6) motion to dismiss, a claimant must
allege sufficient facts that, when accepted as true, state a
facially plausible claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). The factual allegations
need not be detailed, but they must “raise a right to
relief above the speculative level” in order to
“state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555, 570 (2007). When determining whether a complaint
states a claim for relief that is plausible on its face, a
district court accepts as true all factual allegations in the
complaint and draws all reasonable inferences in the
plaintiff's favor. Blankenship v. USA Truck,
Inc., 601 F.3d 852, 853 (8th Cir. 2010).
different reasons, both Prairie Winds and Tom's Backhoe
object to the recommendation of the R&R to grant in part
and deny in part Prairie Winds's motion to dismiss.
Prairie Winds objects to the recommendation to deny its
motion to dismiss Tom's Backhoe's cross-claim for
breach of contract, arguing that the magistrate judge erred
by declining to consider documents attached to Prairie
Winds's motion to dismiss. Tom's Backhoe objects to
the recommendation to dismiss its negligence claim,
contending that Tom's Backhoe alleges negligence by
Prairie Winds that exceeds a failure to perform contractual
duties. The Court reviews these objections de novo and
addresses each in turn. See 28 U.S.C. §
636(b)(1)(C); Fed.R.Civ.P. 72(b)(3); LR 72.2(b)(3);
Grinder v. Gammon, 73 F.3d 793, 795 (8th Cir. 1996)
Prairie Winds's Objections
Winds objects to the recommendation to deny its motion to
dismiss Tom's Backhoe's cross-claim for breach of
contract. Prairie Winds maintains that the magistrate judge
erred by failing to consider the documents attached to
Prairie Winds's motion to dismiss. When these
documents-purportedly the contracts governing the
relationship between Tom's Backhoe and Prairie Winds-are
considered, Prairie Winds contends, it is evident that
Tom's Backhoe's cross-claim for breach of contract
fails to allege the satisfaction of conditions precedent to
Prairie Winds's contractual obligation of performance.
Prairie Winds asserts that this deficiency warrants dismissal
of Tom's Backhoe's cross-claim for breach of
matters outside the pleadings generally may not be considered
when deciding a motion to dismiss, a district court may
consider documents necessarily embraced by the pleadings.
Ashanti v. City of Golden Valley, 666 F.3d 1148,
1151 (8th Cir. 2012). Materials are necessarily embraced by
the pleadings when a complaint alleges the contents of the
materials and no party questions their authenticity. Zean
v. Fairview Health Servs., 858 F.3d 520, 526 (8th Cir.
2017). The contract on which a breach-of-contract claim rests
ordinarily is embraced by the pleadings. See Gorog v.
Best Buy Co., Inc., 760 F.3d 787, 791 (8th Cir. 2014).
R&R determines that the documents Prairie Winds attaches
to its motion to dismiss are not necessarily embraced by the
pleadings because Tom's Backhoe challenges the
authenticity of the attached documents. Prairie Winds objects
to this determination, arguing that Tom's Backhoe waived
its authenticity challenge by failing to raise it until the
hearing on the motion. For this reason, it was procedurally
unfair for the magistrate judge to consider the authenticity
challenge, Prairie Winds contends.
Winds's argument mischaracterizes the record. In its
brief opposing Prairie Winds's motion to dismiss,
Tom's Backhoe maintains that the reason the Court
“must not consider the . . . alleged
subcontracts” is because the documents are not the
contracts governing the relationship between the parties.
This is the same argument that Tom's Backhoe advanced
during the hearing before the magistrate judge. Because
Tom's Backhoe challenges the authenticity of the
documents attached to Prairie Winds's motion to dismiss,
the R&R correctly determines that the attached documents
are not necessarily embraced by the pleadings. Prairie
Winds's objections are overruled.
Tom's Backhoe's Objections
Backhoe objects to the recommendation to dismiss its
negligence cross-claim against Prairie Winds for failure to
allege that Prairie Winds breached a duty of care that is
distinct from its duty to perform its contractual
obligations. Tom's Backhoe argues that its negligence
claim survives for two reasons. First, Tom's Backhoe
contends that it alleges damages that arise from a breach of
a duty of care that is beyond the scope of Prairie
Winds's contractual obligations. Second, according to