Deltro Elec. v. Elec. Power Sys. Int'l
| Decision Date | 23 September 2022 |
| Docket Number | 1:21-cv-303 |
| Parties | DELTRO ELECTRIC LTD., Plaintiff, v. ELECTRIC POWER SYSTEMS INTERNATIONAL, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
This cause comes before the Court on multiple motions filed by Plaintiff Deltro Electric Ltd. (“Deltro”) Defendant Electric Power Systems International, Inc. (“EPS”), and proposed Intervener PCL Construction Services, Inc. (“PCL”).
For the reasons set forth below, the Court GRANTS Deltro's Motion for Leave to File First Amended Complaint (“Mot. for Leave,” Doc. 30) and ORDERS Deltro to file the same. The Court GRANTS PCL's Motion to Intervene (“Mot. to Intervene,” Doc. 44) and DENIES AS MOOT PCL's Motion for Leave to Replace Proposed Answer and Cross Claims (“Mot. for Leave,” Doc. 52). The Court GRANTS EPS's Motion for an Extension of Time (Doc. 37). The Court DENIES AS MOOT WITHOUT PREJUDICE EPS's Motion for Judgment on the Pleadings (“Mot for J. on the Pleadings,” Doc. 35). The Court DENIES AS MOOT EPS's Motion to Strike Deltro's and PCL's Joint Motion for Partial Summary Judgment (Doc. 37), and DENIES AS MOOT EPS's Motion to Stay Consideration of Deltro's and PCL's Joint Motion for Partial Summary Judgment (see id.). The Court DENIES AS MOOT Deltro's Motion to Expedite (“Mot. to Expedite,” Doc. 34). Finally, the Court DENIES EPS's Motion to Strike Deltro's Response to PCL's Motion to Intervene (Doc. 49).
Deltro's and PCL's Joint Motion for Partial Summary Judgment remains pending before the Court. (“Mot. for Summ. J.,” Doc. 31). Accordingly, EPS is hereby ORDERED to respond to the Joint Motion for Partial Summary Judgment within 21 days of this Opinion. All newly added parties are advised to be mindful of their obligations under the Federal Rules with regard to responsive pleadings.
This controversy arises out of a solar farm development project gone sour. The Court has already issued one Order in this matter. Deltro Electric Ltd. v. Electric Power Systems Internation, Inc., No. 1:21-cv-303, 2021 WL 5027406 (S.D. Ohio Oct. 29, 2021); (Doc. 24). Today, eight motions with nineteen associated briefs now sit before the Court. The cause? A state mechanic's lien that one sub-subcontractor (EPS) filed on the project. To resolve those motions, the Court, not surprisingly, must explore the filings in some detail. But it helps to clarify at the outset-the central dispute at this juncture is whether Deltro (who is the plaintiff here, and also the subcontractor who hired EPS) has standing to challenge EPS's mechanic's lien.
Plaintiff Deltro and Defendant EPS worked together on a solar farm construction project in Brown County, Ohio. (Doc. 4, #22-23). Hillcrest Solar, LLC (“Hillcrest”), lessee of the site, contracted to construct the solar farm. (Id. at #22). Hillcrest hired PCL as the general contractor for the project. PCL in turn hired Deltro as a subcontractor, and Deltro then hired EPS to work as a subcontractor beneath it.
(Id.). In short, Hillcrest is the lessee, PCL the general contractor, Deltro a subcontractor, and EPS a sub-subcontractor.
Deltro alleged in its Complaint that EPS breached its obligations under the contract between them. (Id. at #23). EPS countered that Deltro wrongly refused to pay EPS for its work, prompting EPS to file a mechanic's lien on the subject property. (Id.; Doc. 14, #71-72). All agree that Deltro has no ownership or possessory interest in that property.
Deltro initiated these proceedings against EPS in state court on April 6, 2021. (Doc. 4). There, Deltro sought a declaratory judgment invalidating EPS's mechanic's lien under Ohio law, on the grounds that the lien was “excessive” and “improper.” (Id. at #23-27). Deltro further argued that the improper lien delayed the project, resulting in PCL refusing to pay Deltro such that Deltro could not pay its own subsubcontractors. (Id. at #26). Deltro also asserted a breach of contract claim against EPS. (Id. at #27-29). For the purposes of this Opinion though, only the request for declaratory judgment is at issue.
EPS removed the action to this Court on April 30, 2021, asserting it fell within this Court's diversity jurisdiction. (Doc. 1). That same day, PCL “bonded off” EPS's mechanic's lien on the property. (Doc. 24, #399). What that means is that PCL (the general) essentially substituted a surety bond (naming EPS as the protected party) in place of the lien on Hillcrest's (the lessee's) interests in the property at issue. (EPS Answer, Ex. D, Order from Brown Cnty. Ct. of Common Pleas Bonding Off Lien, Doc. 14-4, #191-2; Ex. E, Recorded Order (same), Doc. 14-5, #193-4).
On May 27, 2021, Deltro moved to remand the action to state court, arguing that removal had been inappropriate on three grounds. (Doc. 16). The Court disagreed. (Doc. 24).
More recently, and more relevant to this Opinion, on February 22, 2022, Deltro moved for leave to file its First Amended Complaint. (Mot. for Leave, Doc. 30). In its Motion, Deltro sought leave to amend to add the “newly necessary” parties who had an interest in the recently issued bond created to offload EPS's mechanic's lien. (Id. at #433). Specifically, Deltro sought to add PCL (the general contractor), and the bond sureties, Fidelity and Deposit Company of Maryland, Travelers Casualty and Surety Company of America, and Federal Insurance Company.[1] (Id.). Aside from updating the factual allegations, Deltro planned to maintain its two existing claims for relief and add a federal declaratory judgment claim also invalidating the state mechanic's lien. (Id. at #434).
The day after seeking leave to file, Deltro moved for Partial Summary Judgment, seeking a declaratory judgment that EPS's mechanic's lien was invalid as a matter of state law. (Mot. for Summ. J., Doc. 31, #455). Deltro argued that EPS failed to comply with the state statutory requirements to file a mechanic's lien, making the lien void. (Id.).
Then, five days later, on February 28, 2022, Deltro moved to expedite the proceedings, requesting the Court rule on its Motion for Leave to Amend the Complaint and Motion for Partial Summary Judgment before April 20, 2022. (Doc. 34, #708). Deltro alleged it was bound to indemnify PCL for all bond premiums, which would begin coming due on April 20, 2022. (Id.).
Within the next few weeks, EPS responded in a variety of ways. First, on March 4, 2022, EPS moved for partial judgment on the pleadings in response to the original Complaint. (Mot. for J. on the Pleadings, Doc. 35). EPS argued that, under Ohio law, only those with an interest in the subject property may challenge a mechanic's lien because it is an in rem action, and here Deltro has no such interest and so cannot challenge the lien. (Id. at #722-26). Separately, EPS contended that Deltro lacked Article III standing to maintain its demand for declaratory judgment in federal court. (Id. at #717).
A week later, EPS opposed Deltro's motion for leave to amend. (See Doc. 36). EPS argued that Deltro's motion to amend was actually a motion to supplement the pleadings, and that Deltro still lacked standing to bring its claim for declaratory judgment invalidating the mechanic's lien. (Id. at #730). To EPS, this made Deltro's attempt to alter the pleadings futile and warranted denial of Deltro's motion. (See Id. at #730).
Then, on March 15, 2022, EPS moved to strike or stay consideration of Deltro's motion for partial summary judgment. (See Doc. 37). EPS contended that Deltro's summary judgment motion was premature, as the Court had not yet granted Deltro leave to file its alleged “supplemental” pleadings, and the proposed additional parties had not yet had a chance to answer or move. (Id. at #741-42). In the alternative, EPS requested an extension of time of 21 days to file its opposition following the Court's determination of Deltro's standing. (Id. at #739).
Finally, on March 21, 2022, EPS filed its opposition to Deltro's Motion to Expedite. (See Doc. 38). EPS argued that Court could not rule on Deltro's motions until the new parties were served (Id. at #749). Further, EPS alleged that Deltro's urgency was unwarranted based on its own allegedly dilatory practices up until then. (Id. at #750). Therefore, EPS believed that Deltro had not shown good cause to expedite the proceedings. (Id. at #751).
Thereafter, Deltro took its turn. First, on March 25, 2022, Deltro replied in support of its Motion for Leave to File First Amended Complaint. (Doc. 39). There, Deltro argued that bonding off EPS's mechanic's lien represented a “significant change to the dispute,” warranting leave to amend the Complaint. (Id. at 753). On the standing front, Deltro first argued that its pleadings adequately stated standing. (Id. at #756). Then, Deltro asserted another basis for its standing, this one arising from a contract between Deltro and PCL, under which Deltro alleged it is required to indemnify and defend PCL for the surety bond and to pay the premiums for that bond. (Id. at #757). Last, Deltro complained that EPS was not actively enforcing its mechanic's lien, and that PCL and the bond sureties were not actively challenging the lien. Deltro claimed it needed the ability to challenge the lien to avoid or mitigate its otherwise ongoing obligations under its contract with PCL relating to that bond (defense and payment). (Id. at #758).
On the same day, Deltro also opposed EPS's Motion for Partial Judgment on the Pleadings. (See Doc. 40). Deltro began by arguing that its Complaint met Ohio pleadings standards when filed in Ohio court prior to removal. (Id. at #768). Deltro also contended that under the federal pleading standards, it had offered sufficient factual allegations to state a...
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