15 F.3d 963 (10th Cir. 1994), 92-2200, Industrial Constructors Corp. v. United States Bureau of Reclamation

Docket Nº:92-2200.
Citation:15 F.3d 963
Party Name:INDUSTRIAL CONSTRUCTORS CORPORATION; Paul Powers, individually, and as shareholder and officer of Industrial Constructors Corporation; Wayne Elledge, individually, and as shareholder and officer of Industrial Constructors Corporation; Janet Hall, individually, and as shareholder and officer of Industrial Constructors Corporation; James Schuemacher,
Case Date:February 02, 1994
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 963

15 F.3d 963 (10th Cir. 1994)

INDUSTRIAL CONSTRUCTORS CORPORATION; Paul Powers,

individually, and as shareholder and officer of Industrial

Constructors Corporation; Wayne Elledge, individually, and

as shareholder and officer of Industrial Constructors

Corporation; Janet Hall, individually, and as shareholder

and officer of Industrial Constructors Corporation; James

Schuemacher, individually, and as shareholder and officer of

Industrial Constructors Corporation; Betty Powers,

individually, and as shareholder and officer of Industrial

Constructors Corporation, Plaintiffs-Appellants,

v.

The UNITED STATES BUREAU OF RECLAMATION, an agency of the

United States of America; Lindell H. Elfrink,

individually; Bill Frazer,

individually; Michael T.

Voth, individually,

Defendants-Appellees.

No. 92-2200.

United States Court of Appeals, Tenth Circuit

February 2, 1994

Page 964

S. Austin Johnson, Albuquerque, New Mexico, for Plaintiffs-Appellants.

John W. Zavitz, Assistant United States Attorney (Don J. Svet, United States Attorney, with him on the brief), Albuquerque, New Mexico, for Defendants-Appellees.

Before BALDOCK, McWILLIAMS and BRORBY, Circuit Judges.

BALDOCK, Circuit Judge.

Plaintiffs Industrial Constructors Corporation ("ICC") and its shareholders and officers appeal the district court's dismissal pursuant to Fed.R.Civ.P. 12(b)(6) of their claims as time-barred. We have jurisdiction under 28 U.S.C. Sec. 1291, and we affirm.

Plaintiffs alleged the following facts in their complaint and in the documents attached

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to their complaint, and we presume these facts are true in reviewing a motion to dismiss. See Settles v. Golden Rule Ins. Co., 927 F.2d 505, 507 (10th Cir.1991) (complaint allegations are presumed true in reviewing the granting of a motion to dismiss); see also Hall v. Bellmon, 935 F.2d 1106, 1112 (10th Cir.1991) (written documents attached to the complaint are exhibits and are considered part of the complaint for consideration in a rule 12(b)(6) dismissal). In August 1983 in the state of New Mexico, ICC entered into a $2.3 million contract with the Bureau of Reclamation ("BOR") to install 22.4 miles of underground pipeline and recompact soil in the San Luis Valley Project near Alamosa, Colorado. Defendant Michael T. Voth was the BOR contracting officer and Defendant Lindell H. Elfrink was the BOR project engineer on the contract. Defendant Bill Frazer was the construction division manager in the engineering and research center in Denver for the BOR.

Early in the project, ICC became aware that performance according to contract specifications would be very difficult because the type of pipeline construction dictated by the contract could not be performed on the type of soil located at the contract site. On October 7, 1983, ICC met with a representative from the BOR engineering and research center to discuss the problems with the construction method. On October 10, 1983, ICC requested by letter that the BOR allow ICC to use another construction method more compatible with the job site. The BOR informed ICC that if it could meet the contract's requirements using another method, the new method would receive consideration. On October 13, 1983, ICC experimented with another construction method at the job site and submitted the results to the BOR for consideration. Upon testing the method, the BOR discovered that the new method met essentially all contract requirements. On October 28, 1983, the BOR engineering and research center sent a memorandum to Defendants Voth and Elfrink, making it plain that the method specified in the contract was not to be treated as mandatory as long as the performance objectives of the contract could be reached. Defendant Elfrink, with the knowledge of Defendant Voth, deliberately withheld the results of the BOR tests and the information contained in the October 28, 1983 memorandum from ICC, and on December 8, 1983, Defendant Elfrink, on behalf of the BOR, officially refused ICC's request to use the new method of construction, stating that the portions of the contract designating the construction method were mandatory.

In January 1984, ICC submitted an informal written claim to the BOR alleging substantial damages resulting from their inability to reach performance objectives using the construction method required by the contract specifications. At a series of meetings held in February, March, and April of 1984, ICC and its representatives sought to persuade the BOR to grant a change order which would relieve ICC of compliance with the construction method requirement. The existence of the October 28, 1983 memorandum from the BOR engineering and research center, which stated that the construction method specified in the contract was not mandatory, was not revealed to ICC at any of these meetings. In fact, Defendant Voth represented to ICC that he needed to obtain information from the engineering and research center before he could change the mandatory nature of the construction method. At the March 1984 meeting, Defendant Voth indicated to ICC that relief from the construction method requirement would not be granted unless ICC agreed to give up any claims it might have against the BOR. On April 17, 1984, Defendant Voth sent this proposal to ICC in writing, and on April 30, 1984, ICC wrote Defendant Voth, emphasizing ICC's unwillingness to give up its claims, but agreeing that if granted relief from the construction method requirements, such relief would not be construed by ICC as an admission by the BOR that its construction method was defective. On May 16, 1984, Defendant Voth responded to ICC, stating that no relief from the construction method requirements would be granted absent a formal release of all claims and threatening to terminate ICC for default and failure to adhere to the contested contract requirements.

In May and June of 1984, ICC continued its attempt to find a way to use the construction method specified in the contract, even

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consulting and cooperating with an inspector recommended by the BOR who had experience with the contract-specified construction technique. Despite these attempts, the construction method continued to produce inconsistent results, and ICC's progress toward contract completion was exceedingly slow, causing ICC to continue...

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