Faith Techs. Inc. v. Fid. & Deposit Co. of Maryland, CIVIL ACTION No. 10-2375-KHV

• Decision Date: 25 August 2011
• Docket Number: CIVIL ACTION No. 10-2375-KHV
• Court: U.S. District Court — District of Kansas
• Parties: FAITH TECHNOLOGIES, INC., et al., Plaintiffs, v. THE FIDELITY & DEPOSIT COMPANY OF MARYLAND and BROWN COMMERCIAL CONSTRUCTION COMPANY, INC., Defendants.

FAITH TECHNOLOGIES, INC., et al., Plaintiffs, v. THE FIDELITY & DEPOSIT COMPANY OF MARYLAND and BROWN COMMERCIAL CONSTRUCTION COMPANY, INC., Defendants.

CIVIL ACTION No. 10-2375-KHV

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

Dated: August 25, 2011

MEMORANDUM AND ORDER

This case arose from a defunct shopping center development project. Plaintiffs, which are subcontractors, sub-subcontractors and suppliers for the project, bring suit for unpaid work on the shopping center against Brown Commercial Construction Company, Inc. ("Brown") and The Fidelity & Deposit Company of Maryland ("F&D"). Brown was the general contractor on the project and F&D was the insurer which issued payment and performance bonds for the project.

This matter is before the Court on Defendants' Motion For Summary Judgment (Doc. #185) filed February 22, 2011; subcontractor plaintiffs' responses to defendants' motion for summary judgment, which the Court construes as motions to reconsider the Memorandum And Order (Doc. #177) filed January 26, 2011;¹ the Motion For Reconsideration Of Denial Of Summary Judgment Motions ByLithko Contracting, Inc. And ARR Roofing, LLC (Doc. #191) which Lithko Contracting, Inc. ("Lithko") and ARR Roofing, LLC's ("ARR") filed March 15, 2011; and Defendants' Motion To Strike Plaintiffs Lithko Contracting, Inc. And ARR Roofing, LLC's Reply In Support Of Motion For Reconsideration (Doc. #209) (Doc. #210) filed April 12, 2011.

Based on the Memorandum And Order (Doc. #177) in which District Judge Monti L. Belot denied plaintiffs' motions for partial summary judgment, defendants ask the Court to grant summary judgment against the subcontractor plaintiffs.² Judge Belot's order held that K.S.A. § 60-16-1803(c) did not bar defendants from asserting a conditional payment provision in subcontractor plaintiffs' contracts with Brown as a defense to plaintiffs' claims against them. Plaintiffs ask the Court to overrule defendant's motion for two reasons: (1) the Court should reconsider Judge Belot's decision and (2) the record reveals a genuine issue of material fact may exist as to whether Brown has received payment from the owner of the shopping center, Corbin Park, L.P.

For the following reasons, the Court overrules defendants' motion to strike, overrules subcontractor plaintiffs' motions to reconsider and sustains in part defendants' motion for summary judgment.

Legal Standards

I. Motion To Reconsider

D. Kan. Rule 7.3(b) governs motions to reconsider non-dispositive orders, while Rules 59 and 60, Fed. R. Civ. P., govern motions to reconsider dispositive orders. D. Kan. Rule 7.3; Coffeyville Res. Ref. & Mktg., LLC v. Liberty Surplus Ins. Corp., 748 F. Supp.2d 1261, 1264 n.3 (D. Kan. 2010) (citing Fye v. Okla. Corp. Com'n, 516 F.3d 1217, 1223 n.2 (10th Cir. 2008)). Some uncertainty exists with respect to whether orders disposing of some but not all claims are dispositive or non-dispositive under D. Kan. Rule 7.3. A.H. ex rel. Hohe v. Knowledge Learning Corp., No. 09-2517-DJW, 2011 WL 2731757, at *2 n.12 (D. Kan. July 13, 2011) (noting disagreement whether to characterize partial summary judgment orders as dispositive or non-dispositive); Coffeyville Res. Ref. & Mktg., 748 F. Supp.2d at 1264; compare Johnson v. Simonton Bldg. Props., Inc., No. 08-2198, 2009 WL 902409, at *2 (D. Kan., Mar. 31, 2009) (order dispositive because it terminated some of plaintiff's claims) and Seyler v. Burlington N. Santa Fe Corp., 121 F. Supp.2d 1352, 1355 (D. Kan. 2000) (order non-dispositive because it did not fully resolve case and could be challenged by timely motion under D. Kan. Rule 7.3(b)).

Here, however, plaintiffs ask the Court to reconsider an order which denied motions for partial summary judgment. Plaintiffs argue that the order was "dispositive" because it ruled on dispositive motions - the Lithko and ARR motions for partial summary judgment. Plaintiffs cite no authority, however, that an order which denies summary judgment, i.e. does not dispose of any claims, may be considered "dispositive" for purposes of D. Kan. Rule 7.3. Therefore, D. Kan. Rule 7.3(b), which governs motions to reconsider non-dispositive orders provides the framework for analyzing plaintiffs'motions.³

Under D. Kan. Rule 7.3(b), a party seeking reconsideration of a non-dispositive order must file a motion within 14 days after the order is filed, unless the Court extends the time. The motion must be based on (1) an intervening change in controlling law, (2) the availability of new evidence or (3) the need to correct clear error or prevent manifest injustice. D. Kan. Rule 7.3(b). A motion to reconsider is only appropriate where the Court has obviously misapprehended a party's position, the facts or applicable law, or where the party produces new evidence that it could not have obtained earlier through the exercise of due diligence. Comeau v. Rupp, 810 F. Supp. 1172, 1174-75 (D. Kan. 1992). A motion to reconsider is not a second opportunity for the losing party to make its strongest case, to rehash arguments or to dress up arguments that previously failed. Voelkel v. Gen. Motors Corp., 846 F. Supp. 1482, 1483 (D. Kan. 1994). A party's failure to present its strongest case in the first instance does not entitle it to a second chance in the form of a motion to reconsider. Cline v. S. Star Cent. Gas Pipeline, Inc., 370 F. Supp.2d 1130, 1132 (D. Kan. 2005). Whether to grant a motion to reconsider is left to the Court's discretion.

II. Summary Judgment

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show no genuine issue as to any material fact and that the moving parties are entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Vitkus v. Beatrice Co., 11 F.3d 1535, 1538-39 (10th Cir. 1993). A factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Liberty Lobby, 477 U.S. at 248. A "genuine" factual dispute requires more than a mere scintilla of evidence. Id. at 252.

The moving parties bear the initial burden of showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Hicks v. City of Watonga, 942 F.2d 737, 743 (10th Cir. 1991). Once the moving parties meet their burden, the burden shifts to the nonmoving parties to demonstrate that genuine issues remain for trial as to those dispositive matters for which they carries the burden of proof. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991). The nonmoving parties may not rest on their pleadings but must set forth specific facts. Applied Genetics, 912 F.2d at 1241.

The Court views the record in the light most favorable to the nonmoving parties. Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir. 1991). It may grant summary judgment if the nonmoving parties' evidence is merely colorable or is not significantly probative. Liberty Lobby, 477 U.S. at 250-51. In a response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation, or on suspicion, and may not escape summary judgment inthe mere hope that something will turn up at trial. Conaway v. Smith, 853 F.2d 789, 794 (10th Cir. 1988). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. at 251-52.

If a nonmovant shows by affidavit or declaration, however, that for specified reasons it cannot present facts essential to justify its opposition to a motion for summary judgment, the Court may (1) defer considering the motion or deny it, (2) allow time to obtain affidavits or declarations or to take discovery or (3) issue any other appropriate order. Fed. R. Civ. P. 56(d).

Factual And Procedural History

The parties and the Court have repeatedly recited the relevant factual and procedural history of the case. Memorandum And Order (Doc. #206) filed March 29, 2011; Memorandum And Order (Doc. #181) filed February 3, 2011. Therefore the Court only briefly recaps the pertinent facts and procedural posture.

As noted above, this case arose from a shopping center development project that went bankrupt. The development, known as the Corbin Park Shopping Center, is on the southeast corner of 135th Street and Metcalf Avenue in Overland Park, Kansas. Plaintiffs are subcontractors, sub-subcontractors and suppliers who hold liens for unpaid work against Corbin Park property. Brown was the general contractor on the project and F&D was the insurer. On behalf of Brown, F&D issued payment and performance bonds for the Corbin Park project. In October of 2008, Bank of America ("BOA") contracted with Corbin Park to fund the project. It stopped funding in July of 2009, before the project was completed. On January 5, 2010, Corbin Park, L.P., which owns the property, filed for bankruptcy.

Defendants seek summary judgment against 19 subcontractor plaintiffs - ARR d/b/a BooneBrothers Roofing; Aegis Fire Protection, LLC; Arrowhead Services, Inc.; B&C Mechanical Services, LLC; Central Plumbing Heating & A.C., Inc.; D&D Masonry, Inc.; Doing Steel Fabrication, LLC d/b/a Doing Steel; Faith Technologies, Inc.; Great Plains Roofing and Sheet Metal, Inc.; Heartland Masonry, Inc.; Landworks, Inc.; Lithko; McCorkendale Construction, Inc.; O'Donnell & Sons Construction Company, Inc.; Saladino Plumbing & Heating Company d/b/a Saladino Mechanical Company; Summit Concrete, LLC; Tex-Plastering, Inc.; Tri-State Masonry, Inc.; and Wachter Electric Company (together, "subcontractor plaintiffs"). Doc....