Kane Enterprises v. MacGregor USA Inc

IN THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 02-30432
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KANE ENTERPRISES,
Plaintiff-Appellant,
VERSUS
MacGREGOR (USA) Inc., ET AL
Defendants,
MACGREGOR (USA) INC.,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
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February 27, 2003
Before SMITH, WIENER, and DEMOSS,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Kane Enterprises (“Kane”), a commercial
barge operator, appeals the dismissal, under
FED. R. CIV. P. 12(b)(6), of its contract claims
against MacGREGOR (USA), Inc., a naval
contractor. Finding no error, we affirm.
I.
MacGREGOR contracted (the “prime con-
tract”) with the United States Navy to build
and install large ramps on warships. The
prime contract did not oblige MacGREGOR
to post a performance or payment bond under
the Miller Act, 40 U.S.C. § 270a et seq.
MacGREGOR then subcontracted (the
“subcontract”) with Halter Marine (“Halter”),
inter alia, to store the ramps and transport

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them when the ships were ready for the ramps
to be installed. Halter, in turn, sub-
subcontracted (the “sub-subcontract”) with
Kane, a commercial barge operator, for
delivery of the ramps.
The parties to these contracts by and large
fulfilled their relevant obligations. The Navy
received the ramps and paid MacGREGOR in
full. MacGREGOR has paid Halter, except for
a $150,000 retainage provided for by the
subcontract. Kane fully performed its
contractual obligation by delivering the ramps.
Unfortunately for Kane, however, Halter filed
for chapter 11 bankruptcy shortly after Kane
had delivered the ramps; Halter therefore has
not paid Kane the approximately $85,000
owed to Kane under the sub-subcontract.
Kane sued MacGREGOR in Louisiana state
court for contractual damages. MacGREGOR
removed to the United States District Court
for the Eastern District of Louisiana based on
diversity of citizenship and moved to dismiss
for failure to state a claim upon which relief
can be granted. The court granted the motion,
reasoning that Kane sought to recover from
the retainage, a right to payment that is
property of the Halter bankruptcy estate and
over which the United States District Court
for the Southern District of Mississippi, the
court in which Halter filed its petition, has
exclusive jurisdiction under 28 U.S.C.
§ 1334(e).
II.
We review de novo a dismissal under rule
12(b)(6), applying the same standards as did
the district court. Ramming v. United States,
281 F.3d 158, 161 (5th Cir. 2001). The court
must construe the complaint liberally in favor
of the plaintiff and must take all facts pleaded
as true. Campbell v. Wells Fargo Bank, 781
F.2d 440, 442 (5th Cir. 1986). Moreover, the
court may not dismiss the complaint under rule
12(b)(6) “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 v. Gibson, 355 U.S. 41, 45-46
(1957). At the same time, a plaintiff must
plead specific facts, not mere conclusional al-
legations, to avoid dismissal for failure to state
a claim. Collins v. Morgan Stanley Dean Wit-
ter, 224 F.3d 496, 498 (5th Cir. 2000). “We
will thus not accept as true conclusory
allegations or unwarranted deductions of fact.”
Id. (citation omitted). Finally, the court may
review the documents attached to the motion
to dismiss, e.g., the contracts in issue here,
where the complaint refers to the documents
and they are central to the claim. Id. at 498-99
III.
The district court believed that Kane merely
sought to recover its contractual damages
from Halter by claiming against the retainage
owed to Halter by MacGREGOR. This
interpretation of the complaint is
understandable. As Kane stated in the district
court, “Kane is pursuing an equitable lien
claim against MacGREGOR such that
MacGREGOR will be ordered to pay Kane
from the $150,000 owed by MacGREGOR
under the contract [with Halter].” The
retainage due to Halter from MacGREGOR,
however, is property of the Halter bankruptcy
estate. 11 U.S.C. § 541; In re Glover Constr.
Co., 30 B.R. 873 (W.D. Ky. 1983). The
district in which a chapter 11 petition is filed
has exclusive jurisdiction over the property of
the estate. 28 U.S.C. § 1334(e). Thus, the
court properly dismissed the complaint,
because the Southern District of Mississippi
has exclusive jurisdiction over the retainage.
Kane has not appealed this aspect of the

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ruling, but it objects that the court did not
consider its other claims against MacGREG-
OR. Though we agree with MacGREGOR
that Kane’s complaint primarily seeks recovery
from the retainage, we disagree that Kane’s
complaint did not present its other claims. We
construe the complaint liberally and
acknowledge that it fairly raises a claim for
equitable lien, a third-party beneficiary claim
under the prime contract, and a quantum
meruit claim. Yet, none of these states a claim
upon which relief can be granted. Thus, we
affirm.1
First, Kane has not stated a claim for an
equitable lien in any appropriate fund or prop-
erty. An equitable lien is a “right . . . to have
a demand satisfied from a particular fund or
specific property.” BLACK’S LAW DICTION-
ARY 934 (7th ed. 1999) (emphasis added); see
also Dep’t of the Army v. Blue Fox, Inc., 525
U.S. 255, 262-63 (1999) (describing the
nature of an equitable lien). As we have ex-
plained, Kane cannot claim an equitable lien
against the retainage in any court outside the
Southern District of Mississippi, nor can it
claim an equitable lien in the ramps, because
they are now property of the United States,
and liens cannot attach to government
property. Blue Fox, 525 U.S. at 264.
Kane also argues for a lien against the mon-
ey already paid to MacGREGOR by the Navy,
but Kane has not identified any legal or factual
basis for such a lien. Kane cites only two
cases, one of which, Quality Mech.
Contractors, Inc. v. Moreland Corp., 19 F.
Supp. 2d 1169 (D. Nev. 1998), was effectively
overruled by Blue Fox. The other, Faerber
Elec. Co. v. Atlanta Tri-Com, Inc., 795 F.
Supp. 240 (N.D. Ill. 1992), stands for the
unremarkable proposition that the Miller Act
is not the exclusive remedy for a sub-
subcontractor against a government contractor
if other common law remedies exist.
Yet, Kane does not explain how it could
possibly be entitled to an equitable lien against
money paid to MacGREGOR by the Navy.
Kane cites subcontract ¶ 2(e), but that
paragraph merely allows MacGREGOR to
withhold the retainage from Halter; it does not
create a basis for an equitable lien. Kane also
cites subcontract ¶ 7(b), but that paragraph
obviously protects MacGREGOR from
Halter’s breach of the subcontract, not Kane
from Halter’s breach of the sub-subcontract.
Kane cursorily cites several other equally
irrelevant paragraphs to similar effect.
Second, Kane has not stated a claim as a
third-party beneficiary to the prime contract.
“A contract ing party may stipulate a benefit
for a third person called a third party
beneficiary.” LA. CIV. CODE ANN. art. 1978.2
“Louisiana law is settled that for there to be a
stipulation pour autrui there must be not only
a third-party advantage, but the benefit derived
1 MacGREGOR observed, in its opening brief,
that the United States, which Kane attempted to
join as a defendant, might remain a party in the
district court. If true, this fact would have de-
prived us of appellate jurisdiction, because Kane
did not obtain a certificate under FED. R. CIV. P.
54(b). After supplemental briefing, however, we
conclude that Kane never properly served the
United States under FED. R. CIV. P. 4(i). For
purposes of appellate jurisdiction, we treat an im-
properly served defendant as never before the dis-
trict court. Ins. Co. of N. Am. v. Dealy, 911 F.2d
1096, 1099 (5th Cir. 1990). Thus, the district
court’s order was an appealable final judgment for
which Kane did not need a rule 54(b) certificate.
2 The parties have assumed throughout that
Louisiana law governs this case.

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from the contract by the third party may not
merely be incidental to the contract.” Davis
Oil Co. v. TS, Inc., 145 F.3d 305, 311 (5th
Cir. 1998) (citation omitted). Further, the
stipulation “will be found only when the
contract clearly contemplates the benefit to
the third person as its condition or
consideration.” Id. (citation omitted). The
contract need not expressly identify the third
person, however, if the contract plainly
contemplates a benefit to a third person. Id.
Under these Louisiana standards, Kane
does not qualify as a third-party beneficiary to
the prime contact’s transportation clauses.
The prime contract simply states that Mac-
GREGOR will ship the ramps via “commercial
barge.” This clause hardly manifests a plain
intent to make into a third-party beneficiary an
unspecified barge operator several steps down
the contracting chain.
The clause does not even mention payment
to the operator. The surrounding clauses,
which state other modes of transportation for
other goods, further support this reasoning. If
Kane is a third-party beneficiary under the
commercial barge clause, then other shipping
companies would become third-party
beneficiaries to those clauses. Kane’s
implausible argument would erase Louisiana’s
distinction between intended and incidental
benefits and would create dozens of third-
party beneficiaries under the prime contract.3
Finally, Kane has not stated a quantum
meruit claim against MacGREGOR.
“Quantum meruit is an equitable remedy
founded upon the principle that no one who
benefits from the labor . . . of another should
be unjustly enriched at the other’s expense.
The doctrine operates, in the absence of a
specific contract, to infer a promise on behalf
of the person to whom the benefit is conferred
to pay a reasonable sum for the services or
materials furnished.” Brankline v. Capuano,
656 So. 2d 1, 5 (La. App. 3d Cir. 1995);
accord McCarty Corp. v. Pullman-Kellogg,
Div. of Pullam, Inc., 751 F.2d 750, 760 (5th
Cir. 1985). In other words, quantum meruit
presupposes both the absence of an express
contract and unjust enrichment of the
defendant.
Neither element is present here. Kane has
a specific contract with Halter. Kane may be
displeased that Halter filed for bankruptcy, but
its displeasure does not void the sub-
subcontract, and does not allow it to sue
MacGREGOR. Kane’s remedy is a suit for
breach of contract against Halter, not a
quantum meruit claim against MacGREGOR.
Also, MacGREGOR was not unjustly en-
riched; it contracted with Halter, and both par-
ties performed their obligations under the sub-
contract. Halter may have been unjustly en-
riched by its failure to pay Kane under the sub-
subcontract, but that cannot justify a quantum
meruit claim against MacGREGOR.
The judgment is AFFIRMED. All requests
for sanctions are DENIED.
3 Kane also argues that it is a third-party ben-
eficiary of the subcontract, but it does not specify
which clauses of the subcontract confer this pu-
tative benefit. We therefore deem this argument
waived for failure to brief it adequately. See FED.
R. APP. P. 28(a)(9)(A).

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