A.M. Cohron & Son, Inc. v. City of Columbus
| Decision Date | 07 July 2021 |
| Docket Number | 4:21CV3066 |
| Court | U.S. District Court — District of Nebraska |
| Parties | A.M. COHRON & SON, INC., Plaintiff, v. CITY OF COLUMBUS, NEBRASKA, Defendant. |
This matter is before the court on Defendant City of Columbus' ("the City") motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). The City asserts the complaint fails to state a claim upon which relief can be granted because Plaintiff A.M. Cohron & Son, Inc. ("AMC") failed to perform the conditions precedent required under Neb. Rev. Stat. § 16-726 and its complaint for breach of contract is time-barred. AMC requests oral argument because the parties disagree as to which statutes apply. For the reasons stated below, the motion to dismiss will be granted (Filing No. 10), and the motion for hearing (Filing No. 15) will be denied.
Plaintiff AMC's complaint alleges:
AMC, an Iowa Corporation and the City, a political subdivision of the State of Nebraska, entered into a construction contract for a project in Platte County, Nebraska in December 2016. (Filing No. 1 at CM/ECF pp. 1-2). The project involved construction of grade-separated crossings of the Union Pacific Railroad Corridor at two locations in the city; one was a pedestrian overpass, the other a vehicular viaduct. (Filing No. 1 at CM/ECF p. 5). During its work on the viaduct, AMC encountered issues with rebar clearance and was unable to achieve the clearance specified in the contract. AMC consulted with the Project Engineer and ultimately performed "extra work" to pour the bridge deck thicker than the contract specifications. (Filing No. 1 at CM/ECF pp. 5-6). AMC submitted a change order request to the Project Engineer on or about May 22, 2018. The Project Engineer denied AMC's change order request on or about June 4, 2018, and the City did not pay additional compensation or extend the time allotted under the contract for completion of the project. (Filing No. 1 at CM/ECF p. 6). AMC alleges it is entitled to additional time and compensation for the "clearance issues" it encountered.
Under the contract, the project was to be completed within 587 calendar days, with terms allowing liquidated damages if AMC failed to complete the project within the specified time frame. (Filing No. 1 at CM/ECF p. 6). The City assessed $394,179.00 in liquidated damages against AMC because of the delayed completion of the project. AMC asserts the City's damages are significantly less than the liquidated damages assessed. (Filing No. 1 at CM/ECF p. 8). AMC alleges that as a direct and proximate cause of the City's breaches of the Contract, AMC has been damaged in an amount exceeding $456,762.45. (Filing No. 1 at CM/ECF p. 9).
The project was a federal-aid project. The Nebraska Department of Roads ("NDOR") made payments to AMC on behalf of the City, and NDOR delegated to the City as Local Public Agency Owner under 23 CFR 635.105. (Filing No. 1 at CM/ECF p. 2) AMC filed this action on March 18, 2021, alleging the City breached its contract by: (a) failing to provide AMC with additional time and compensation as a result of the clearance issues it encountered on the Project; (b) failing to grant a time extension for delays caused by conditions beyond AMC's control; and, (c) withholding sums owed to AMC as a result of an unenforceable liquidated damages provision. (Filing No. 1 at CM/ECF p. 9).
To survive a Rule 12(b)(6) motion to dismiss, a complaint must set forth a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). This standard does not require detailed factual allegations, but it demands more than an unadorned accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The standard requires a complaint to contain sufficient factual matter which, accepted as true, states a claim for relief that is plausible on its face. Ashcroft, 556 U.S. at 678; Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d 915, 917 (8th Cir. 2015) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Generally, a motion to dismiss may be granted when a claim is barred under a statute of limitations. Varner v. Peterson Farms, 371 F.3d 1011, 1016 (8th Cir.2004). If a defendant raises a statute of limitations defense and the face of the complaint indicates that the limitations period has expired, the plaintiff can survive a 12(b)(6) motion to dismiss only upon a showing that the statute of limitations was tolled. Schmidt v. Newland, 927 F.3d 1038, 1041 (8th Cir. 2019).
At the core of this motion, the parties disagree as to which statute provides the appropriate means for seeking recovery of contractual damages from the City. AMC argues that Neb. Rev. Stat. § 45-1210 (the Nebraska Construction Prompt Pay Act ("NCPPA")) controls; the City argues Neb. Rev. Stat. § 16-726 controls. Ultimately, I find the conditions precedent of § 16-726 govern this action and AMC's complaint must be dismissed.
Statutes in existence at the time of executing a contract generally become part of the contract. Travelers Indem. Co. v. Int'l Nutrition, Inc., 734 N.W.2d 719, 727 (Neb. 2007); see In re Estate of Peterson, 381 N.W.2d 109 (Neb. 1986). Statutory interpretation is a question of law. Loves v. World Ins. Co., 758 N.W.2d 640, 643 (Neb. 2008). Clyde Bergemann Power Grp. Americas, Inc. v. City of Fremont, Nebraska, No. 8:15CV321, 2017 WL 11485731, at *3 (D. Neb. Apr. 24, 2017).
Prior to enacting the NCPPA, Neb. Rev. Stat. § 16-726 governed claims and accounts payable for cities of the first class. It required "as a condition precedent to maintaining an action against a city of the first class, that 'the claimant . . . file such claim within ninety days of the accrual of the claim in the office of the city clerk.'" Centric Jones v. City of Kearney, Neb., 324 F.3d 646, 949 (8th Cir. 2003)(quoting Neb. Rev. Stat. § 16-726). The provision "function[ed] as a statute of limitations, resulting in the time bar of suits not filed within the requisite ninety days." Id. The filing requirement constitutes a "procedural precedent to the commencement of a judicial action." Bergemann at 3, citing Niemoller v. City of Papillion, 752 N.W.2d 132, 136 (Neb. 2008). The requirements of Neb. Rev. Stat. § 16-726 are not met when the notice of claim is filed only with someone who is not authorized to receive the claim.1 Bros v. Kimball Cty. Hosp., 857 N.W.2d 789, 802 (Neb. 2015).
The NCPPA was enacted in 2010 and dictates certain payment terms when construction work is performed in accordance with the provisions of a contract. AMC asserts the NCPPA, not Neb. Rev. Stat. § 16-726, governs this case "because the contract was for a construction project." (Filing No. 14 at CM/ECF p. 6) (emphasis in original). Specifically, AMC argues Neb. Rev. Stat. § 45-1210applies as it sets forth the form of a claim for liquidated or unliquidated damages against a political subdivision arising from construction performed for such subdivision. Section 45-1210(5) states "Notwithstanding any other provision of law in Chapters 13, 14, 15, 16, 17, and 23, claims against a political subdivision of this state arising from construction performed for such political subdivision shall be governed by this section."
The City asserts the NCPPA is inapplicable because AMC is not a 'contractor' as defined by the NCPPA. Neb. Rev. Stat. § 45-1202 defines a "contractor" to include "individuals, firms, partnerships, limited liability companies, corporations, or other associations of persons engaged in the business of construction . . . of roads, bridges, viaducts, sewers . . ." but it specifically excludes from the definition "an individual or an entity performing work on a contract for the State of Nebraska or performing work on a federal-aid or state-aid project of a political subdivision in which the state makes payments to the contractor on behalf of the political subdivision." Neb. Rev. Stat. § 45-1202(1).
The NCPPA, enacted in 2010, was amended by LB 961 in 2014. The 2014 amendment, effective July 18, 2014, added the clause excluding public works contractors and subcontractors from coverage under the bill.2 The complaint alleges the contract at issue in this case, entered into after the July 2014 amendments to the NCPPA, specifically states that the construction project was "a federal-aid project of a political subdivision in which the Nebraska Department of Roads ('NDOR') made payments to AMC on behalf of the City." (Filing No. 1 at CM/ECF p. 2).
Applying the definition of a contractor in the NCPPA as of the date when the City/AMC contract was signed, AMC is not considered a contractor under the NCPPA. Despite the potential inconsistency of 45-1210(5) ("notwithstanding any other provision of law in Chapters 13,14, 15, 16, 17, and 23, claims against a political subdivision of this state arising from construction performed for such political subdivision shall be governed by this section."), the clear legislative intent of the 2014 amendment to the terms of the NCPPA is to exclude federal and state aid projects from this act. Thus, the contract between AMC and the City is outside the scope of the NCPPA, § 45-1210.3 Instead, § 16-726 is the applicable statute.
Under Neb. Rev. Stat. § 16-726, any claim for liquidated and unliquidated claims and accounts payable against a city of the first class4 must: 1) "be presentedin writing;" 2) "state the name and address of the claimant and the amount of the claim;" and 3) "fully and accurately identify the items or services for which payment is claimed or the time, place, nature, and circumstances giving rise to the claim." Neb. Rev. Stat. § 16-726. "As a condition precedent to maintaining an action for a claim, other than a tort claim as defined in section 13-903, the claimant shall file such claim within ninety days...
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