JOHN E. STEELE, Senior District Judge.
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,
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").
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,
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. (
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
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."
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,
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."
VWNA asserts that the City failed to adequately allege a valid counterclaim for an equitable accounting because it failed to plead the existence of a complex transaction, overlooks the fact that the City has an adequate remedy at law arising from VWNA's breach of contract claim, and fails to allege the existence of a fiduciary relationship.
"The elements of a cause of action for breach of fiduciary duty are (1) the existence of a duty, (2) breach of that duty, and (3) damages flowing from the breach."
Here, the Amended Counterclaim (Doc. #42) does not include any allegations regarding fiduciary duty. Although the City alleges the existence of a contract between the parties, the Court will not assume that the existence of the contract alone created a fiduciary relationship between the parties. Indeed, a contract may explicitly state that no fiduciary relationship is formed between the parties by the existence of the contract or include other terms that could inform the Court's analysis regarding equitable accounting. Additionally, the City makes no argument and cites no facts from which the Court should imply that a fiduciary relationship exists. The Court is also not convinced without more detailed allegations that the invoices are so complex that it is impossible to determine the nature of the cost in the invoices. The allegations in this regard are wholly conclusory. However, the City will be provided the chance to amend.
Accordingly, it is hereby
Counter-Defendant Veolia Water North America — South, LLC's Motion to Dismiss First Amended Counterclaim (Doc. #51) is