Delta Mechanical, Inc. v. Garden City Group, Inc.

concurring in part and dissenting in part:

Although I concur in Sections I and III, I disagree with the analysis in Section II. In considering a motion to dismiss under Rule 12(b)(6), we “begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Ashcroft, v. Iqbal, — U.S. -, -, 129 S.Ct. 1937, 1950 , 173 L.Ed.2d 868 (2009). “We next consider the factual allegations in respondent’s complaint to determine if they plausibly suggest an entitlement to relief.” Id. at 1951 . Under this test, Delta does not allege facts sufficient to survive a motion to dismiss.

*235 Setting aside Delta’s conclusory legal allegation that it is an intended third-party beneficiary of the Class Action Settlement Agreement, the essence of Delta’s factual allegations is that 1) defendants failed to issue certificates to eligible class members, 2) such failure was a breach of the Settlement Agreement, and 3) as a result, Delta was not compensated. See Settlement Agreement, Section 8.2.3. Because Delta does not allege that the Settling Defendants agreed in the Settlement Agreement to incur an obligation to Delta, the complaint’s factual…

MEMORANDUM *

Delta Mechanical, Inc. (“Delta”) appeals the district court’s decision pursuant to Fed.R.Civ.P. 12(b)(6) that it is not a third-party beneficiary to a settlement agree *233 ment and thus is not entitled to bring a lawsuit for alleged breach, etc., of that agreement by the settling defendants. Delta also appeals the district court’s decision that it cannot sue the Garden City Group, Inc. (“Garden City”) as a contractual delegatee of the settling defendants.

We reverse in part, affirm in part, and remand for further proceedings.

I

The district court was correct in denying the effects of collateral estoppel to Delta. The Missouri court’s conclusion that Delta was a third-party beneficiary to the settlement agreement was not a critical and necessary part of its judgment that Delta was not entitled to intervene in the action which produced the agreement.

II

The district court erred in concluding pursuant to Rule 12(b)(6) that Delta was not a third-party beneficiary to the agreement. The evidentiary record on this issue demonstrates at this early stage of the case that whether Delta was or was not a third-party beneficiary is a genuine issue of material fact that…