Envtl. Dimensions, Inc. v. EnergySolutions Gov't Grp.
| Decision Date | 18 March 2021 |
| Docket Number | No. 1:16-cv-1056-KWR-JHR,1:16-cv-1056-KWR-JHR |
| Parties | ENVIRONMENTAL DIMENSIONS, INC., Plaintiff, v. ENERGYSOLUTIONS GOVERNMENT GROUP, INC. (n/k/a Atkins Energy Government Group, Inc.), Defendant. |
| Court | U.S. District Court — District of New Mexico |
THIS MATTER comes before the Court upon Defendant's Motion for Attorneys' Fees, filed December 23, 2020 (Doc. 214). Having considered the parties' briefs and the applicable law, the Court finds that Defendant's motion is well-taken in part, and will be granted with respect to its counterclaim for attorneys' fees related to an open account/account stated, and denied with respect to fees related to "defending a 'groundless' claim under the New Mexico Unfair Practices Act" and for "for All of the Claims and Counterclaims in This Lawsuit." Id. at 1, 10.
The claims arise from a dispute involving a nuclear waste remediation project the parties worked on together at Los Alamos National Lab ("LANL"). The facts of the case are set out in detail in several Memorandum and Opinion Orders and need not be repeated in their entirety here. See Docs. 167, 168, 188, 196, 202, and 215. Briefly, Defendant, a subcontractor of Plaintiff's, carried out work authorized by Plaintiff, after which Defendant submitted six invoices dating from March 10 - August 11, 2015 amounting to $1,041,531.74,1 for which it was not paid, although Plaintiff submitted invoices to Los Alamos National Security, LLC (LANS) for the same work and received payment.
Defendant provides nuclear waste remediation and personnel support. In 2009, two years before contracting with Plaintiff, Defendant worked as prime contractor with LANS on a transuranic waste remediation project designated as Master Task Order 10. The project was completed on June 30, 2014. Plaintiff was not a party to that agreement. On February 14, 2014, an incident occurred at the Carlsbad Waste Isolation Pilot Plant facility when an improperly packaged waste drum, packaged by Defendant at LANL, underwent an exothermic reaction and burst, causing a radiological release ("WIPP incident"). The DOE Accident Investigation Board (AIB) investigated the incident and issued a report on April 15, 2015. The report pinpointed twelve contributing factors leading to the accident, including, among other things, LANS' failure to adhere to certain controls implemented by the relevant field office, LANL's failure to develop appropriate packaging and treatment procedures, and failure of LANS, Defendant, and the Los Alamos field office to ensure a strong enough safety culture. The report stated that Defendant's actions were possible contributing factors to the accident but stated that none of the contributing factors individually caused the accident.2
Unrelated to Defendant's Master Task Order 10 project, on July 12, 2011, in pursuit of qualification to bid on a LANL contract for small businesses, denominated as Master Task Order Agreement No. 2 ("MTOA2"), Plaintiff executed a Teaming Agreement with Defendant, specifying the duties and responsibilities of the parties should the bid be accepted. The Agreement included that, "[e]xcept as expressly provided ... all rights and obligations of the parties under this Agreement shall terminate on the earliest of the following: ... e. Execution by both parties of the subcontract contemplated by this Agreement." (Doc. 99 Ex. G).
In February 2012, Plaintiff was qualified as a potential contractor, but no work was assigned at the time. The LANS' MTOA2 agreement with Plaintiff provided that "Contractor [LANS] may, at any time, without notice to the sureties if any, by written Change Notice unilaterally direct additions, deletions or changes . . . to all or any part of the Work and Subcontractor agrees to perform such work as changed." (SOF 7).
After its successful qualification, Plaintiff subcontracted with Defendant and two other companies to carry out assigned work. Plaintiff executed the subcontract with Defendant in August 2013. On April 16, 2014, LANS awarded Plaintiff work under MTOA2 Task Order 1, with a maximum potential allocation of $23,349,876.42. LANS retained the right to modify this amount. LANS incrementally released funds for the project to Plaintiff amounting to $4,839,421.76. Work began on the project in July 2014.
Plaintiff's employees, project manager Chris Edgmon ("Edgmon") and COO/VP of business development John Rodell ("Rodell")3 were tasked with coordinating the work. Edgmon was responsible for managing the project on a day-to-day basis by scheduling work, budgeting, and approving invoices submitted by the subcontractors, which in turn were submitted to Rodellfor review and approval. Bradshaw had little involvement in the day-to-day operations of the project, and most decisions were largely left to Edgmon and Rodell.
Defendant took on a larger role than the other subcontractors in performance of the work, consequently billing for a larger share than the other subcontractors. It is undisputed that Defendant only carried out work authorized by Plaintiff; that Defendant submitted six invoices dating from March 10 - August 11, 2015 amounting to $1,041,531.74, for which it was not paid; and that Plaintiff submitted invoices to LANS for the same work and received payment. On May 12, 2015, Bradshaw sent a letter of cure to Defendant stating Defendant was not in compliance with the terms of the Teaming Agreement and that (Doc. 111 Ex. 2). After Bradshaw's letter, Plaintiff continued to assign work to Defendant, which it performed until LANS terminated the underlying Task Order by letter on May 27, 2015, stating that (SOF 16).
Among other claims, Plaintiff argued that Defendant violated the New Mexico Unfair Trade Practices Act (UPA), alleging that through "discussions and meetings" Defendant was aware of issues with its waste packaging procedures as early as September 2011, but failed to inform Plaintiff of possible negative outcomes associated with these problems; that Plaintiff did notdisclose the extent of Defendant's involvement in the WIPP incident after executing the Teaming Agreement; that Defendant breached its duty under the Teaming Agreement in failing to keep Plaintiff apprised of the ongoing investigation; and that it concealed Defendant's potential liability for over a year before MTOA2 Task Order 1 was terminated. Plaintiff attributed LANS' choice to perform more work internally as a punitive measure in response to Defendant's alleged misconduct during the WIPP incident. Lastly, Plaintiff stated that Defendant used "heavy-handed tactics" and "overruled" Plaintiff's managerial staff to manipulate the contract to monopolize work to the exclusion of the other subcontractors.
In the relevant Orders, the Court determined that Defendant was the prevailing party, granting summary judgment in favor of Defendant on Plaintiff's claims (including Plaintiff's UPA claim) and granting summary judgment on Defendant's counterclaims relating to its entitlement to payment for the invoiced work. Docs. 188, 196, 202, and 215. The Court also awarded Defendant pre- and post-judgment interest on its damages. Doc. 219.
Defendant seeks an award of attorneys' fees for: 1) prosecuting its counterclaim for an open account/account stated under NMSA 1978 § 39-2-2.1, (2) an award of reasonable attorneys' fees for defending a "groundless" claim under the New Mexico Unfair Practices Act (UPA) pursuant to NMSA 1978, § 57-12-10(C), and, (3) "All of the Claims and Counterclaims in This Lawsuit Because They Are Inextricably Intertwined." Doc. 214 at 1, 10.
The Court applies state law in a diversity action with respect to attorneys' fees. Toland v. Technicolor, Inc., 467 F.2d 1045, 1047 (10th Cir. 1972); See Wolf & Klar Cos. v. Garner, 1984-NMSC-040, ¶ 5, 101 N.M. 116, 117-18, 679 P.2d 258, 259-60 (). The parties agree that thedecision to grant an award of attorneys' fees to a prevailing party on its claim for an open account is left to the Court's discretion. Audio-Visual Mktg. Corp. v. Omni Corp., 545 F.2d 715, 718 (10th Cir. 1976) (citing Trujillo v. Romero, 1971-NMSC-020, 82 N.M. 301, 481 P.2d 89).
Here, Defendant moves for attorneys' fees for its successful counterclaim for an open account/account stated under NMSA 1978 § 39-2-2.1. Doc. 214 at 5. The statute provides that "[i]n any civil action in the district court, small claims court or magistrate court to recover on an open account, the prevailing party may be allowed a reasonable attorney fee set by the court, and taxed and collected as costs." Id. ...
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