Case 1:10-cv-00090 Document 1 Filed 07/09/10 Page 1 of 7

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION

BELFOR USA GROUP, INC., )

)
Plaintiff, ) CASE NO. 1:10-CV-00090
)
vs. )
)
THE CITY OF CEDAR RAPIDS, IOWA, ) COMPLAINT & JURY DEMAND
)
Defendant. )
)
)

Plaintiff Belfor USA Group, Inc., (“Belfor”), for its causes of action against The City of

Cedar Rapids, Iowa (the “City”), states as follows:

NATURE OF THE ACTION

1. This is an action for breach of contract, unjust enrichment, and promissory

estoppel in connection with the City’s failure to pay for services rendered by Belfor pursuant to a

Time and Material Contract.

PARTIES

2. Plaintiff Belfor USA Group, Inc., (“Belfor”) is a corporation organized under the

laws of the state of Colorado with its principal place of business in Birmingham, Michigan.

Belfor is not a citizen of the State of Iowa.

3. Defendant The City of Cedar Rapids, Iowa (“the City”) is a municipal corporation

as defined in Iowa Code Chapter 362. The City is a citizen of the State of Iowa.

JURISDICTION AND VENUE

4. The amount in controversy exceeds $75,000.00, exclusive of interest and costs.

5. Jurisdiction in this Court is proper pursuant to 28 USC § 1332(a)(1).

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6. Venue is proper in this jurisdiction pursuant to 28 USC § 1391(a)(1) and (2)

because it is where the City resides and is where a substantial part of the events or omissions

giving rise to the claims occurred.

FACTUAL BACKGROUND

7. Belfor is a disaster recovery and restoration business that provides

comprehensive, rapid response to mitigate property damage.

8. On or about June 27, 2008, the City and Belfor executed a contract entitled “Time

and Material Contract” (the “Contract”). A copy of the Contract is attached hereto as Exhibit 1,

and is incorporated by this reference.

9. Among other things, the Contract governs the scope of disaster recovery services

to be performed by Belfor following floods occurring in the City in 2008. Ex. 1 at 6-8. The

specific services Belfor was to provide are contained in a Scope of Work which is attached to

and incorporated into the Contract. Ex. 1, at 1, 6-8.

10. Pursuant to the Contract, the City “agree[d] to pay Belfor for any and all amounts

invoiced for services and/or materials provided based upon the estimated unit prices and labor

rates, as listed in Belfor’s Rate and Materials Schedules dated October 2007 and January 2008.”

Ex. 1, at 1. The Rate and Materials Schedules are attached to and incorporated into the Contract.

Ex. 1, at 1, 9-13.

11. Paragraph 3 of the Contract provides that if Belfor has not received payment

within 90 days after invoicing the City, the City agrees to pay 12% per annum on any

outstanding balance as an interest charge until the balance is paid. Ex. 1, at 1.

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12. Paragraph 17 of the Contract requires the City to make payment, without setoff,

for Belfor’s invoices in accordance with the payment terms contained in the Contract. Ex. 1, at

4.

13. Belfor performed services in 2008 pursuant to the Contract and invoiced the City

for those services.

14. The City has refused to pay the amounts Belfor has invoiced.

COUNT I
BREACH OF CONTRACT

15. Belfor repeats and realleges the foregoing paragraphs as if fully set forth herein.

16. Belfor and the City were capable of contracting at the time they executed the

Contract.

17. Belfor and the City formed the Contract.

18. Pursuant to the Contract, the City agreed to pay for work performed by Belfor

described in the Scope of Work attached to the Contract at rates set forth in the Rate and

Materials Schedules attached to the Contract.

19. Pursuant to the Contract, the City agreed to pay for work performed by Belfor in

accordance with the terms and conditions appearing in the Contract.

20. Belfor has done what the Contract requires without complaint from the City.

21. The City has paid $12,498,868.52 to Belfor for services rendered.

22. However, the City has failed and refused to pay the total amount to which Belfor

is entitled. There is presently due and owing to Belfor the sum of $354,622.43 for services

rendered and $66,606.80 in interest charges for a total due of $421,229.23 as of June 1, 2010. A

table calculating the balance due as of June 1, 2010 is attached hereto as Exhibit 2, and is

incorporated by this reference.

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23. The City’s refusal to remit payments for the amount currently due is a breach of

the Contract.

24. Belfor has been damaged by the City breach of the Contract.

WHEREFORE Plaintiff Belfor USA Group, Inc., respectfully requests this Court award

judgment in its favor and against Defendant City of Cedar Rapids in the amount of $421,229.23,

for contractual interest charges accrued since June 1, 2010, for additional interest as permitted by

law, and for other and further relief as the Court deems just, proper, and equitable.

COUNT II
BREACH OF CONTRACT

25. Belfor repeats and realleges the foregoing paragraphs as if fully set forth herein.

26. The Contract’s Scope of Work included work Belfor was to perform on the

Paramount Theatre. Ex. 1, at 6-7.

27. Belfor entered into a lease with Xtra Lease, LLC, for two storage containers for

the storage of seating from the Paramount Theatre.

28. The lease agreement between Belfor and Xtra Lease requires Belfor to pay

$375.00 per unit per month for the storage containers.

29. The City has failed and refused to reimburse Belfor for lease payments made to

rent Xtra Lease’s containers for the months of March 2009 through May 2010, as required by the

Contract.

30. Despite repeated demands, the City has refused to transfer the Xtra Lease leases

to its name and to take over the lease payments.

31. As of June 1, 2010, there is due and owing to Belfor the sum of $12,000.00 for

lease payments it has advanced on behalf of the City.

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32. The City’s refusal to reimburse Belfor for costs advanced constitutes a breach of

the Contract.

33. As a result, Belfor is entitled to a judgment against the City for all lease payments

previously advanced and for any lease payments advanced until the lease is transferred to the

City.

34. Belfor is also entitled to an order compelling the City to assume responsibility for

the lease for the storage containers.

WHEREFORE Plaintiff Belfor USA Group, Inc., respectfully requests this Court enter

judgment in its favor and against Defendant City of Cedar Rapids in the amount of $12,000.00,

for additional storage container fees expended by Belfor after June 1, 2010 and during the

pendency of this litigation, for contractual interest charge, for an order compelling Defendant to

assume responsibility for payments required under the storage container lease between Belfor

and Xtra Lease, LLC, and for other and further relief as the Court deems just, proper, and

equitable.

COUNT III
UNJUST ENRICHMENT

35. Belfor repeats and realleges the foregoing paragraphs as if fully set forth herein.

36. The City has wrongfully refused to pay for the services rendered by Belfor.

37. The City has been enriched by receipt of the services from Belfor.

38. The City was cognizant it was receiving Belfor’s services.

39. The City’s enrichment was at the expense of Belfor.

40. It would be unjust to allow the City to retain the benefit of Belfor’s services

without compensation under the circumstances.

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WHEREFORE Plaintiff Belfor USA Group, Inc., respectfully requests this Court enter

judgment in its favor and against Defendant City of Cedar Rapids for compensatory damages

sufficient to render Plaintiff whole, for attorney’s fees and other costs of this action, and for other

and further relief as the Court deems just, proper, and equitable.

COUNT IV
PROMISSORY ESTOPPEL

41. Belfor repeats and realleges the foregoing paragraphs as if fully set forth herein.

42. The City made a clear and definite promise to pay Belfor for all services rendered.

43. This promise was made with the City’s clear understanding that Belfor was

seeking an assurance upon which it could rely and without which it would not have acted.

44. Belfor acted to its substantial detriment in reasonable reliance on the City’s

promise by performing services that benefitted the City.

45. Injustice can be avoided by enforcing the City’s promise to pay.

WHEREFORE Plaintiff Belfor USA Group, Inc., respectfully requests this Court enter

judgment in its favor and against Defendant City of Cedar Rapids for compensatory damages

sufficient to render Plaintiff whole, for attorneys’ fees and other costs of this action, and for other

and further relief as the Court deems just, proper, and equitable.

JURY DEMAND

46. Belfor hereby requests a jury trial on all issues so triable.

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/s/ Kevin H. Collins, AT0001671

NYEMASTER, GOODE, WEST,
HANSELL & O’BRIEN, P.C.
One GreatAmerica Plaza
625 First Street SE
Suite 400
Cedar Rapids, IA 52401
Telephone: 319-286-7003
Fax: 319-286-7050
Email: khcollins@nyemaster.com

/s/Matthew R. Eslick, AT0002409

NYEMASTER, GOODE, WEST,
HANSELL & O’BRIEN, P.C.
700 Walnut, Suite 1600
Des Moines, IA 50309
Telephone: 515-283-3156
Fax: 515-283-8045
Email: mreslick@nyemaster.com

ATTORNEYS FOR PLAINTIFF BELFOR

USA GROUP, INC.