ASI Construction LLC v. Oklahoma City City of

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

ASI CONSTRUCTION, LLC, )

)

Plaintiff, )

)

v. ) Case No. CIV-21-01138-JD

)

CITY OF OKLAHOMA CITY, et al., )

)

Defendants. )

ORDER

Before the Court is Defendants City of Oklahoma City and Oklahoma City Water

Utilities Trust’s Motion to Dismiss Plaintiff’s First Amended Complaint (“Motion”)

[Doc. No. 38].1 Plaintiff has responded and Defendants have replied [Doc. Nos. 39, 40].

Defendants seek dismissal pursuant to Federal Rules of Civil Procedure 12(b)(1) and

12(b)(6), asserting this Court lacks jurisdiction and Plaintiff has failed to state a claim

against Defendants upon which relief may be granted. Based on the parties’ submissions,

and under the applicable law, the Court denies the Motion.

I. Background

Plaintiff ASI Construction, LLC sues Defendants City of Oklahoma City (“City”),

Oklahoma City Water Utilities Trust (“Trust”), and Freese and Nichols, Inc., seeking

compensation for unpaid labor, equipment, materials, and services. Taking the allegations

in the First Amended Complaint [Doc. No. 34] as true, in May of 2018, Plaintiff entered a

1 Page citations reference the CM/ECF pagination.

contract with Defendants City and Trust (collectively “Defendants” for purposes of this

Order) to rehabilitate the Atoka Dam spillway and chute (“Contract”). Defendant Freese

and Nichols, Inc. was the professional engineer working on the rehabilitation project.

Plaintiff was unable to complete the work as specified in the Contract because the design

prepared by Freese and Nichols, Inc. was defective. Because of the defective design, it

was necessary for Plaintiff and Plaintiff’s subcontractors to perform additional work,

outside the scope of the Contract. Also because of the defective design, Plaintiff and

Plaintiff’s subcontractors encountered delay in performing the Contract. Plaintiff’s

damages resulting from the defective design exceed $17 million.2

II. Standard of Review

A. Rule 12(b)(1)

Motions to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1)

constitute either “(1) a facial attack on the sufficiency of the complaint’s allegations as to

subject matter jurisdiction; or (2) a challenge to the actual facts upon which subject

matter jurisdiction is based.” Ruiz v. McDonnell, 299 F.3d 1173, 1180 (10th Cir. 2002).

When, as here, the motion is a facial attack, the Court applies “a standard patterned on

Rule 12(b)(6) and assume[s] the truthfulness of the facts alleged.” Utah Native Plant

Soc’y v. United States Forest Serv., 923 F.3d 860, 865 (10th Cir. 2019) (internal

quotation marks and citation omitted).

2 The Court finds that complete diversity exists and that the amount in controversy

exceeds $75,000. See [Doc. Nos. 34, 37, 46].

B. Rule 12(b)(6)

When considering a motion to dismiss under Rule 12(b)(6), the Court accepts all

well-pled factual allegations as true, views them in the light most favorable to the non-

moving party, and liberally construes the pleadings. Lucas v. Turn Key Health Clinics,

LLC, 58 F.4th 1127, 1136 (10th Cir. 2023). That the Court accepts them as true, however,

does not mean the allegations in a complaint are in fact true; the plaintiff “is not required

to prove its case in the pleadings.” Glover v. Mabrey, 384 F. App’x 763, 772 (10th Cir.

2010) (unpublished). Rather, the complaint “must contain enough allegations of fact ‘to

state a claim to relief that is plausible on its face.’” Straub v. BNSF Ry. Co., 909 F.3d

1280, 1287 (10th Cir. 2018) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)).

III. Analysis

A. Rule 12(b)(1)

Defendants first urge the Court to dismiss Counts Two and Three of the First

Amended Complaint (“FAC”) [Doc. No. 34] under Rule 12(b)(1), arguing the Court

lacks subject-matter jurisdiction to hear the claims. Motion at 10–14. Count Two is a

claim for quantum meruit and Count Three is a claim for unjust enrichment. Defendants

argue these claims are, by statutory definition, torts governed by Oklahoma’s

Governmental Tort Claims Act, Okla. Stat. tit. 51, § 151, et seq. (“GTCA”).

In the GTCA, Oklahoma invokes sovereign immunity as to all tort claims against

“[t]he state [and] its political subdivisions” but then waives that immunity “to the extent

and in the manner provided in [the] Act.” Okla. Stat. tit. 51, § 152.1(A)–(B). As a result,

Oklahoma and its political subdivisions—like Defendants—are immune from suit in tort

unless a plaintiff’s suit complies with the GTCA’s requirements, including specifying in

the complaint compliance with mandatory notice requirements. Hall v. GEO Grp., Inc.,

324 P.3d 399, 406 (Okla. 2014). When the GTCA governs, failure to plead compliance

will result in dismissal of the complaint for lack of subject-matter jurisdiction. Drake v.

Oklahoma ex rel. Oklahoma State Dep’t of Health, CIV-22-471-D, 2022 WL 4543227, at

*2 (W.D. Okla. Sept. 28, 2022).

As Defendants note, the dispositive question is whether Plaintiff’s claims are torts

under the GTCA. The Court finds they are not. The GTCA broadly defines “tort” as

a legal wrong, independent of contract, involving violation of a duty

imposed by general law, statute, the Constitution of the State of Oklahoma,

or otherwise, resulting in a loss to any person, association or corporation as

the proximate result of an act or omission of a political subdivision or the

state or an employee acting within the scope of employment.

Okla. Stat. tit. 51, § 152 (emphasis added).3

Defendants argue that, as quantum meruit and unjust enrichment are quasi-

contractual, they are independent of contract and, accordingly, fall within the GTCA’s

definition of tort. While it is true that quantum meruit and unjust enrichment claims are

quasi-contractual, it does not follow that they are, therefore, torts under the statute.

Rather, though the quasi-contractual claims may be outside of or independent of the

3 Though the GTCA has been amended since the date the Contract was executed,

the substance of the GTCA’s definition of tort has remained unchanged. The Court

applies the version of the statute in effect from the November 1, 2021, to October 31,

2022.

express contract at issue here, they are not independent of the contract altogether. Instead,

a quasi-contract, also known as implied-in-law or constructive contract, is a fictional

contract imposed by law to adapt the case to a remedy. Star Well Servs., Inc. v. W.

Oilfields Supply Co., CIV-19-672-R, 2020 WL 4018809, at *4 (W.D. Okla. July 16,

2020) (citing T&S Inv. Co. v. Coury, 593 P.2d 503, 504 (Okla. 1979) (discussing the

distinction between quasi-contracts, implied-in-fact contracts, and express contracts)).

In other words, in asserting a quasi-contractual claim, a plaintiff “ask[s] the law to

impose a contract” so that a remedy can be applied. T&S Inv. Co., 593 P.2d at 505.4 And

even though an implied-in-law contract is different from an implied-in-fact contract or an

express contract, it still exists as an unwritten contract enforceable by an action ex

contractu.5 Id.; see also Conkling’s Estate v. Champlin, 141 P.2d 569, 570 (Okla. 1943)

(describing quasi-contracts as “contracts arising from facts and circumstances

independent of agreements or presumed intention”); Okla. Stat. tit. 12, § 95(2) (imposing

a 3-year statute of limitations on “[a]n action upon a contract express or implied not in

writing,” which includes quasi-contracts (see, e.g., T&S Inv. Co., 593 P.2d at 505)).

4 Rule 8(a) allows for the relief sought by a plaintiff to be relief in the alternative,

and Rule 8(d) allows a plaintiff to make alternative statements of the claim where the

pleading is sufficient if any one of them is sufficient. See generally Fed. R. Civ. P. 8.

Counts Two and Three are alternative theories according to the Complaint. FAC ¶¶ 110,

126.

5 An action is one ex contractu – or deemed to arise from a contract – when

recovery is sought for breach of (a) an express promise, (b) a promise implied in fact, or

(c) a promise implied in law. Shebester v. Triple Crown Insurers, 826 P.2d 603, 610

(Okla. 1992); Thiry v. Armstrong World Indus., 661 P.2d 515, 519 (Okla. 1983) (Opala,

J., concurring).

Accordingly, Plaintiff’s quasi-contractual claims are not independent of contract and do

not fall within the GTCA’s definition of tort.6 Defendants’ Motion with respect to

subject-matter jurisdiction over Counts Two and Three is therefore denied.

B. Rule 12(b)(6)

1. The City as a party to the Contract

Defendants argue the City is not a proper party to this action because it is not a

party to the Contract and, thus, the breach of contract claim against the City should be

dismissed. Motion at 15–17. The Contract is “by and between the . . . Trust . . . and

[Plaintiff].” [Doc. No. 34-1] at 2.7 In the FAC, however, Plaintiff alleges the City is a

party to the Contract by virtue of the City’s Standard Specifications, which govern all

aspects of bidding and construction of the project. FAC ¶¶ 27–31. Plaintiff specifically

alleges that the definitions set forth in the Standard Specifications are applicable to the

6 Defendants rely on two cases that are not binding authority or are otherwise

distinguishable. See Davis v. King, 560 F. App’x 756 (10th Cir. 2014) (unpublished);

Wind River Constr., L.L.C. v. Harper Constr. Co., Inc., CIV-17-599-SLP, 2018 WL

9837964 (W.D. Okla. Apr. 5, 2018).

7 The Court has reviewed portions of the Contract, which Plaintiff attached to the

FAC [Doc. No. 34-1]. The Court has also taken judicial notice and reviewed the Standard

Specifications, which are publicly available documents central to Plaintiff’s allegations.

https://www.okc.gov/departments/public-works/engineer-architect-resources/standards

(last visited June 30, 2023); see State ex rel. Balderas v. United States Nuclear

Regulatory Comm’n, 59 F.4th 1112, 1120 n.5 (10th Cir. 2023) (taking judicial notice of a

report publicly available on the defendant’s website). As Plaintiff did not attach the

Bidding Documents or Contract Documents to the FAC, the Court has not reviewed them

and relies on Plaintiff’s allegations. The Court notes that the Contract does not consist

only of the pages found at [Doc. No. 34-1], but incorporates additional documents that

are not attached to the FAC.

“Bidding Documents and Contract Documents” for the project. Id. ¶ 28. The Standard

Specifications define the City as:

A municipal corporation acting through its duly authorized representatives,

agents or employees. This definition shall incorporate “Trust” or “Authority”

when in the Bidding Documents the Contracting entity is identified as one of

the City’s specified trusts, boards, or authorities of which the City is a

beneficiary.

Plaintiff further alleges that the Bidding Documents identify the Trust as the contracting

entity. FAC ¶ 30. As such Plaintiff alleges the Trust is incorporated into the definition of

the City and, thus, the City is a party to the Contract.

Being mindful that, at this stage, Plaintiff need only “plead[] factual content that

allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged,” and reviewing the allegations in the light most favorable to

Plaintiff, the Court finds Plaintiff has set forth sufficient allegations to allow the Court to

reasonably infer liability. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Lucas, 58

F.4th at 1136. Defendants’ argument that the Trust and the City are presumed to be

separate and distinct under state statute does not contradict Plaintiff’s allegation that the

City has adopted standards under which it accepts responsibility for the contracts of its

various trusts, boards, or authorities. Nor does it undermine the Court’s determination

that Plaintiff has provided sufficient pleading allegations to survive Defendants’ Motion.

Defendants’ Motion to dismiss the breach of contract claim (Count One) against the City

is denied.

2. Statutory limitations

a. The Public Competitive Bidding Act

Defendants assert that Oklahoma’s Public Competitive Bidding Act (“PCBA”),

Okla. Stat. tit. 61, § 101, et seq., limits Plaintiff’s “remedy for compensation over and

above the contract price” because the additional work and delays alleged by Plaintiff

were not readvertised for bids. Motion at 18–19 (internal quotation marks omitted). But

the PCBA section relied on by Defendants requires readvertising for bids for certain

“[c]hange orders or addenda to public construction contracts of over One Million

Dollars.” Okla. Stat. tit. 61, § 121. And Plaintiff does not allege it is owed for changes in

the Contract, such as change orders or addenda. Rather, Plaintiff alleges it is owed for

out-of-scope work, or extra work outside the scope of the Contract. E.g., FAC ¶¶ 12, 63,

64, 66, 75, 82. The difference in these types of work is also evident in the City’s Standard

Specifications wherein “Amendments” and “Change Orders” are both defined as

“changes to the Contract Documents” while “Extra Work” is defined as “[a]ny work

performed by the Contractor not provided for in the Contract Documents.” Standard

Specifications, §§ 100.01, 108.03; see also M.J. Lee Const. Co. v. Oklahoma Transp.

Auth., 125 P.3d 1205, 1211 (Okla. 2005) (“[A] highway construction contractor may be

entitled to additional compensation, over and above the contract price, for costs incurred

due to delay not caused by the contractor, for extra work authorized by the public entity,

or for work necessitated by changed conditions.”). Accordingly, Plaintiff’s allegations are

sufficient to withstand Defendants’ arguments regarding the PCBA, and this portion of

the Motion is denied.

b. The Public Trust Act

Defendants also assert that a provision of what is commonly called the Oklahoma

Public Trust Act, Okla. Stat. tit. 60, § 176, et seq., renders Plaintiff’s claims

“implausible” because the Trust may not “create an indebtedness or obligation until the

indebtedness or obligation has been approved by a two-thirds (2/3) vote of the governing

body of the beneficiary.” Motion at 20–21 (citing Okla. Stat. tit. 60, § 176(F)). The

reasoning set forth above is applicable here. Accepting Plaintiff’s allegations as true and

viewing all reasonable inferences in favor of Plaintiff, the Court finds that Plaintiff is

seeking compensation for work performed outside the scope of the Contract, which leads

to the reasonable inference that the Trust did not deliberately create an indebtedness or

obligation that would require approval by the City pursuant to Okla. Stat. tit. 60,

§ 176(F). Accordingly, Plaintiff’s allegations are sufficient to withstand Defendants’

arguments regarding § 176(F) at this stage, and this portion of the Motion is denied.

3. Assertion of duplicative claims

Finally, Defendants argue Plaintiff’s equitable claims of quantum meruit and

unjust enrichment (Claims Two and Three) should be dismissed because Plaintiff’s

breach of contract claim provides an adequate remedy at law. Motion at 21. Generally,

equitable remedies are not available when an adequate remedy at law exists, such as

“when an enforceable express contract regulates the relations of the parties with respect

to the disputed issue.” Member Servs. Life Ins. Co. v. Am. Nat’l Bank & Trust Co. of

Sapulpa, 130 F.3d 950, 957 (10th Cir. 1997); see also Krug v. Helmerich & Payne, Inc.,

320 P.3d 1012, 1022 (Okla. 2013) (“The long-standing rule in Oklahoma is that a

plaintiff may not pursue an equitable remedy when the plaintiff has an adequate remedy

at law.”). But at the motion to dismiss stage, “Oklahoma federal courts consistently

decline to dismiss alternative theories and requests for relief.” Kunneman Props., LLC v.

Marathon Oil Co., 17-CV-00456-GKF-JFJ, 2019 WL 4658362, at *8 (N.D. Okla. Sept.

24, 2019) (discussing that Krug was not decided in the context of a motion to dismiss,

and citing cases). Though Plaintiff will not be permitted to receive double recovery and

resolution of the contract claim may ultimately make equitable relief inappropriate,

Plaintiff is permitted to pursue alternative theories of recovery and seek both legal and

equitable relief at this stage. See generally Fed. R. Civ. P. 8; see also Hitch Enterprises,

Inc. v. Cimarex Energy Co., 859 F. Supp. 2d 1249, 1258 (W.D. Okla. 2012). Thus,

Defendants’ Motion with respect to Plaintiff's equitable claims is denied.

IV. Conclusion

For the reasons set forth above, the Court DENIES Defendants’ Motion to Dismiss

Plaintiff's Amended Complaint [Doc. No. 38].

IT IS SO ORDERED this 30th day of June 2023.

UNITED STATES DISTRICT JUDGE

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