Keymel Techs., LLC v. Zurich N. Am. Ins. Co.

• Decision Date: 30 December 2013
• Docket Number: CIVIL ACTION NO. 13-3004
• Parties: KEYMEL TECHNOLOGIES, LLC v. ZURICH NORTH AMERICA INSURANCE COMPANY, ET AL
• Court: U.S. District Court — Eastern District of Louisiana

KEYMEL TECHNOLOGIES, LLC v. ZURICH NORTH AMERICA INSURANCE COMPANY, ET AL

CIVIL ACTION NO. 13-3004

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA SECTION "K"(4)

Dated: December 30, 2013

ORDER AND REASONS

Before the Court is a Motion to Dismiss filed by the defendant, Zurich North America Insurance Company. (Rec. Doc. 12). Having reviewed the pleadings, memorandum, and relevant law, the Court GRANTS the defendant's Motion to Dismiss for the following reasons.

I. BACKGROUND

In its complaint, plaintiff alleges the following facts. Plaintiff Keymel Technologies, LLC ("Keymel") entered into an employment contract on April 15, 2010 with defendants Benetech, LLC ("Benetech") and Aaron Bennett ("Bennett"), whereby Keymel would provide materials (sand, clay, limestone, concrete, and asphalt) to a project site owned by the United States Army Corps of Engineers. (Rec. Doc. 12, at 1; Rec. Doc. 1, at 2). Keymel provided materials as per the contract until March 3, 2011. (Rec. Doc. 1, at 3). Afterward, Keymel made demands seeking payment on the balance owed by defendants Benetech and Bennett, but Keymel did not receive the full amount requested in the demands. (Rec. Doc. 1, at 3). Keymel then filed suit to recover the unpaid amount from defendants Benetech, Bennett, and Zurich North America Insurance Company ("Zurich"), Benetech's surety. (Rec. Doc. 1, at 1-2).

Plaintiff Keymel initially brought an action in the Louisiana State Civil District Court for the Parish of Orleans on January 4, 2012. (Rec. Doc. 14, at 2). On July 20, 2012, the state courtgranted Zurich's exception of lack of subject matter jurisdiction, dismissing the suit from state court. On May 28, 2013, plaintiff Keymel filed the instant matter with this Court. Plaintiff Keymel asserts its claim under the Miller Act, 40 U.S.C. § 3131 and alleges jurisdiction pursuant to 28 U.S.C. § 1332. However, defendant Zurich in its motion to dismiss contends that the plaintiff failed to bring this action timely under 40 U.S.C. § 3133(b)(4), and, therefore, the suit should be dismissed. Though defendant Zurich makes no mention of the applicable rule, the Court infers that the defendant intended its motion to dismiss to be asserted under Rule 12(b)(6) as its claim was not asserted in an answer as an affirmative defense.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a defendant to seek dismissal of a complaint based on the "failure to state a claim upon which relief can be granted." When considering a motion to dismiss under Rule 12(b)(6), district courts should construe the complaint liberally in favor of the plaintiff, assuming all factual allegations to be true and resolving any ambiguities and doubts in favor of the plaintiff. Fernandez-Montes v. Allied Pilots Ass'n., 987 F.2d 278, 284 (5th Cir.1993); see Leleux v. United States, 178 F.3d 750, 754 (5th Cir.1999). A complaint may not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Lowrey v. Texas A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir.1997)); Leffall v. Dallas Independent School District, 28 F.3d 521, 524 (5th Cir.1994); Fernandez-Montes, 987 F.2d at 284-85. Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss. Fernandez-Montes, 987 F.2d at 284; Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir.1994). However, if factual allegations show the running of a statute of limitations, it "may support dismissal under Rule 12(b)(6) whereit is evident from the plaintiff's pleadings that the action is barred and the pleadings fail to raise some basis for tolling or the like." Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2003).

III. ANALYSIS

The Miller Act, 40 U.S.C. § 3131 et seq., requires a contractor on a project involving any public building or public work of the Federal Government to post a performance bond, for the protection of the Government, and a payment bond "for the protection of all persons supplying labor and material in carrying out the work provided for in the contract." 40 U.S.C. § 3131(a) & (b). Thus, "[a]ny person who has supplied labor or material on the project may bring a civil action on the payment bond against the contractor." U.S. ex rel. Air Control Technologies, Inc. v. Pre Con Industries, Inc., 720 F.3d 1174 (9th Cir. 2013); 40 U.S.C. § 3133(b)(4). However, the Miller Act provides a limitation on this right: "An action brought under this subsection must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person bringing the action." 40 U.S.C. § 3133(b)(4) (emphasis added).

Defendant Zurich contends that plaintiff Keymel did not file suit timely under the Miller Act's statute of limitations. Both parties agree that March 3, 2011 was the day on which the last of the labor was performed. (Rec. Doc. 1, at 3; Rec. Doc. 12, at 2). Because the plaintiff delivered no materials after March 3, 2011, and the Complaint was filed nearly two and a half years after that date on May 28, 2013, defendant Zurich asserts that the suit should be dismissed. (Rec. Doc. 12, at 2-3).

Plaintiff Keymel contends, however, that the action is not time-barred. Keymel notes that it filed its action in Louisiana state court within the one-year prescriptive period under Louisianalaw, commencing on March 3, 2011, the date work was last performed. (Rec. Doc. 14, at 2). It contends that the prescriptive period was interrupted under Louisiana state law due to the filing of suit in state court, and thus the one-year prescriptive period commenced again running from July 20, 2012. (Rec. Doc. 14, at 2-3; see La. Civ. Code Art. 3463, 3466). Because the suit was filed within that one year period expiring July 20, 2013, plaintiff asserts that the action is timely. (Rec. Doc. 14, at 2). Moreover, the plaintiff contends that it waited until March 28, 2013 to file the suit in the United States Eastern District Court for the Eastern District of Louisiana, as plaintiff believed "in good faith" that the Orleans Parish court would transfer the suit to the Eastern District Court of Louisiana pursuant to the state court's Order stating: "IT IS FURTHER ORDERED that Plaintiff's lawsuit be transferred to the U.S. District Court for the Eastern District of Louisiana at Plaintiff's cost." (Rec. Doc. 14, at 3). Only when plaintiff realized that the Civil District Court Clerk for the Parish of Orleans could not transfer the suit did plaintiff file its Complaint with this Court. (Rec. Doc. 14, at 3).

By its terms, the Miller Act's statute of limitations period is clear: actions that are brought later than one year after the last day on which the last of the labor was performed or material was supplied are barred. Keymel does not contest that March 3, 2011 was the day on which the last of performance under the contract nor does it contest the fact that it filed suit in this Court on May 28, 2013. Applied strictly, the Miller Act's statute of limitations bars the instant action.

Moreover, Keymel's argument that Louisiana law has interrupted the running of the Miller Act statute of limitations is inapposite. As the Fifth Circuit has stated, because "the rights created by the Miller Act are federal in nature and scope [,] federal law controls the computationof the limitations period." U. S. For Use & Ben. of Harvey Gulf Int'l Marine, Inc. v. Maryland Cas. Co., 573 F.2d 245, 247 (5th Cir. 1978).

The Fifth Circuit has interpreted the Miller Act's statute of limitation to be "jurisdictional." See, e.g., Maryland Cas. Co., 573 F.2d at 247; U.S. For Use & Benefit of Bernard Lumber Co., Inc. v. Lanier-Gervais Corp., 896 F.2d 162, 164 (5th Cir. 1990). However, the Fifth Circuit in United States v. Fidelity & Deposit Co. of Maryland clarified that "to the extent that the word 'jurisdictional' is used in those [earlier] cases, it refers to the conditional nature of the right to sue, not to the jurisdiction of the court itself." 813 F.2d 697, 699 (5th Cir. 1987); see U.S. For Use & Benefit of Bernard Lumber Co., Inc. v. Lanier-Gervais Corp., 896 F.2d 162, 164 (5th Cir. 1990) (noting that the term jurisdictional as applied to the Miller Act statute of limitations was a misnomer). Indeed, it is clear that the Fifth Circuit and other courts consider the Miller Act statute of limitations to be "limitational" or a "claim-processing rule," that promotes orderly progress of litigation by requiring certain procedural steps at certain times, rather than a jurisdictional rule. U.S. for Use of Am. Bank v.C.I.T. Const. Inc. of Texas, 944 F.2d 253, 257 (5th Cir. 1991) ("The one-year period in the Miller Act is limitational, not jurisdictional."); accord Pre Con Industries, Inc., 720 F.3d at 1176-77 ("A proper analysis of the Miller Act's statute of limitations makes clear that it is a claim-processing rule, not a jurisdictional requirement."). As such, the statute of limitations may be subject to modification under equitable estoppel or equitable tolling. See Rhodes v. Guiberson Oil Tools Div., 927 F.2d 876, 878 (5th Cir. 1991); Fid. & Deposit Co. of Maryland 813 F.2d 697, 700 (5th Cir. 1987).

Generally, the doctrine of equitable estoppel applies to "any conduct, express or implied, which reasonably misleads another to his prejudice so that a repudiation of such conduct would be unjust in the eyes of the law. It is grounded . . . on the objective impression created by the actor's conduct." Morgan v. Thomas, 448 F.2d 1356, 1365 (5th Cir.1971) (quoting Matsuo Yoshida v. Liberty Mut. Ins. Co., 240 F.2d 824, 829-30 (9th Cir.1957)). The Fifth Circuit considers "equitable estoppel" separately from "equitable tolling" by focusing on the specific actor:

Several courts, including the Supreme Court in Irwin, have used the terms "equitable tolling" and "equitable estoppel" interchangeabl

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