Pike Co. v. Universal Concrete Prods., Inc.

• Decision Date: 08 January 2018
• Docket Number: 6:17–CV–06365 EAW
• Citation: 284 F.Supp.3d 376
• Parties: The PIKE COMPANY, INC., Plaintiff, v. UNIVERSAL CONCRETE PRODUCTS, INC., Defendant. Marist College, Plaintiff–Intervenor, v. Universal Concrete Products, Inc., Defendant.
• Court: U.S. District Court — Western District of New York

284 F.Supp.3d 376

The PIKE COMPANY, INC., Plaintiff,

v.UNIVERSAL CONCRETE PRODUCTS, INC., Defendant.

Marist College, Plaintiff–Intervenor,

v.Universal Concrete Products, Inc., Defendant.

6:17–CV–06365 EAW

United States District Court, W.D. New York.

Signed January 8, 2018

Chad W. Flansburg, Erin C. Borek, Mark J. Moretti, Erin C. Borek, Mark J. Moretti, Phillips Lytle LLP, Rochester, NY, for Plaintiff/Intervenor Plaintiff.

Shawn Michael Rodgers, McNelly & Goldstein, LLC, Hatfield, PA, Theodore M. Baum, McElroy Deutsch Mulvaney & Carpenter, LLP, Rochester, NY, for Defendant.

DECISION & ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

This action is but one of many legal disputes currently pending between the parties, arising out of construction activities on property owned by Marist College ("Marist") in Poughkeepsie, New York. This dispute involves the contractual rights and obligations between plaintiff The Pike Company, Inc. ("Plaintiff") and defendant Universal Concrete Products, Inc. ("Defendant"). Plaintiff, the general contractor for the construction project, claims that Defendant, its subcontractor, materially breached the terms of the parties' subcontract and improperly encumbered the project property with a mechanic's lien that has been discharged by bond. (See Dkt. 7 at 6–9). Plaintiff seeks damages for breach of contract, unjust enrichment, and violations of the New York Lien Law, and an order invalidating and vacating the lien and bond. (Id. ).

Presently before the Court is Defendant's motion to dismiss, stay, or transfer this action (Dkt. 8), and Marist's motion to intervene as a plaintiff-intervenor (Dkt. 18). For the following reasons, Defendant's motion is denied, and Marist's motion is granted.

BACKGROUND ¹

Marist, a private liberal arts college located in Poughkeepsie, New York, engaged the services of Kirchoff–Consigli Construction Management, LLC ("KCCM") to act as the general contractor for a construction project involving several buildings on Marist's campus (the "Project"). (Dkt. 18–1 at ¶ 4 (Affidavit of Justin Butwell)). Defendant acted as KCCM's subcontractor for the Project until May 4, 2015, when Marist hired Plaintiff to replace KCCM as the general contractor. (Id. at ¶¶ 5–7). On May 29, 2015, Plaintiff and Defendant entered into a subcontract to perform work on the Project (the "Subcontract"). (Id. at ¶ 8; see Dkt. 7 at ¶ 8).

Plaintiff alleges that the Subcontract contains an alternative dispute resolution clause, requiring the parties to proceed with mediation before seeking judicial recourse should a dispute arise under the Subcontract's terms. (See Dkt. 7 at ¶ 10). Defendant allegedly fell behind on its scheduled timetable, causing Plaintiff to send a number of letters to Defendant requesting that it cure these defaults. (Id. at ¶ 12; see Dkt. 7–1 (Letter Exhibits)). On September 27, 2016, Plaintiff requested damages from Defendant for its failure to remedy its allegedly untimely performance. (Dkt. 7 at ¶ 14). In response, on October 31, 2016, Defendant filed a mechanic's lien on the subject property, which was discharged by bond. (Id. at ¶ 15).

On December 22, 2016, Defendant filed a writ of summons, without a complaint, in the Court of Common Pleas of Montgomery County, Pennsylvania, naming Plaintiff and Marist as party defendants. (Dkt. 8–2 (Writ of Summons)). Plaintiff alleges that Defendant filed this action without complying with the mediation requirements set forth in the Subcontract. (Dkt. 7 at ¶ 16). Indeed, after Plaintiff filed for mediation with the American Arbitration Association ("AAA") in March of 2017, and the AAA scheduled a preliminary mediation session, Defendant refused to proceed with mediation. (Id. at ¶¶ 23–26).

PROCEDURAL HISTORY

On May 4, 2017, Plaintiff commenced this action against Defendant in New York State Supreme Court, Monroe County, alleging causes of action for breach of contract and unjust enrichment ("NYS Action"). (Dkt. 1–1 at ¶¶ 8–13). On June 8, 2017, Defendant filed an action in the United States District Court for the Eastern District of Pennsylvania, requesting the federal court to declare the mediation clause of the Subcontract void and unenforceable, and to enjoin Plaintiff from enforcing that clause against Defendant ("EDPA Action"). (Dkt. 8–6 at 12–13). The next day, Defendant removed the NYS Action to this Court, alleging that the Court could entertain this action on the basis of diversity jurisdiction. (Dkt. 1 at ¶ 7).² On the same day, Defendant filed its complaint in the Court of Common Pleas of Montgomery County, Pennsylvania, alleging various causes of action, including breach of contract, unjust enrichment, misappropriation of trade secrets, and tortious interference with business relations. (Dkt. 8–4 at 10–21). Throughout the remainder of this Decision and Order, the Court will refer to the action commenced in the Court of Common Pleas of Montgomery County, Pennsylvania, as the "State Action."

On June 30, 2017, Plaintiff filed an amended complaint that expounded upon the original complaint, and alleged causes of action against Defendant that included breach of contract, unjust enrichment, and violations of the New York Lien Law. (Dkt. 7 at 6–9). On July 14, 2017, Defendant moved to dismiss or stay this action on the ground that the abstention doctrine set forth in Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) should apply in light of the pending proceedings in the State Action. (Dkt. 8–7 at 12–18). Alternatively, Defendant requests that the Court transfer this case to the Eastern District of Pennsylvania under the "first-to-file" rule so that this action and the EDPA Action may be consolidated. (Id. at 18–20). Plaintiff opposes Defendant's motion. (Dkt. 11).

On October 2, 2017, Marist filed a motion to intervene in this action pursuant to Rule 24 of the Federal Rules of Civil Procedure. (Dkt. 18). Marist is represented on this motion by the same law firm that represents Plaintiff in the instant action. Not surprisingly, Plaintiff does not object to Marist's motion to intervene. However, Defendant opposes the motion. (Dkt. 22).

Oral argument was held before the undersigned on December 13, 2017, at which time the Court reserved decision on both motions.

DISCUSSION

I. Defendant's Motion to Dismiss or to Stay This Action Based on Colorado River Abstention is Denied

A. Legal Standard

"A motion to dismiss based on Colorado River is considered as a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure." Stahl York Ave. Co., LLC v. City of New York, No. 14 CIV. 7665 (ER), 2015 WL 2445071, at *7 (S.D.N.Y. May 21, 2015), aff'd, 641 Fed.Appx. 68 (2d Cir. 2016), cert. denied ––– U.S. ––––, 137 S.Ct. 372, 196 L.Ed.2d 290 (2016) ; see Rehab. Support Servs., Inc. v. Town of Esopus, 226 F.Supp.3d 113, 125 (N.D.N.Y. 2016) (" ‘A motion to dismiss based on the abstention doctrine is ... considered as a motion made pursuant to Rule 12(b)(1).’ " (quoting City of New York v. Milhelm Attea & Bros., Inc., 550 F.Supp.2d 332, 341 (E.D.N.Y. 2008) )).

"A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that the court retains jurisdiction." Makarova v. United States , 201 F.3d 110, 113 (2d Cir. 2000). "When considering a motion to dismiss for lack of subject matter jurisdiction or for failure to state a cause of action, a court must accept as true all material factual allegations in the complaint." Shipping Fin. Servs. Corp. v. Drakos , 140 F.3d 129, 131 (2d Cir. 1998). "[T]he district court can refer to evidence outside the pleadings and the plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Luckett v. Bure, 290 F.3d 493, 496–97 (2d Cir. 2002). "Indeed, a challenge to the jurisdictional elements of a plaintiff's claim allows the Court to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Celestine v. Mount Vernon Neighborhood Health Ctr. , 289 F.Supp.2d 392, 399 (S.D.N.Y. 2003), aff'd, 249 Fed.Appx. 851 (2d Cir. 2007). "The court may consider affidavits and other materials beyond the pleadings but cannot rely on conclusory or hearsay statements contained in the affidavits." Young v. United States, No. 12-CV-2342 (ARR)(SG), 2014 WL 1153911, at *6 (E.D.N.Y. Mar. 20, 2014) (quotation omitted).

B. Colorado River Abstention

1. General Principles

"Abstention from the exercise of federal jurisdiction is the exception, not the rule." Colo. River Water Conservation Dist. , 424 U.S. at 813, 96 S.Ct. 1236. "Where, as here, a federal court properly has subject matter jurisdiction, it has a ‘virtually unflagging obligation’ to exercise that jurisdiction, even if an action concerning the same matter is pending in state court." Bethlehem Contracting Co. v. Lehrer/McGovern, Inc. , 800 F.2d 325, 327 (2d Cir. 1986) (quoting Colo. River Water Conservation Dist. , 424 U.S. at 817–18, 96 S.Ct. 1236 ). " Colorado River abstention is appropriate in limited ‘situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts.’ " First Keystone Consultants, Inc. v. Schlesinger Elec. Contractors, Inc. , 862 F.Supp.2d 170, 181 (E.D.N.Y. 2012) (quoting Colo. River Water Conservation Dist. , 424 U.S. at 817, 96 S.Ct. 1236 ). "The underlying principles of the Colorado River doctrine rest on considerations of ‘wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.’ " Radioactive, J.V. v. Manson , 153 F.Supp.2d 462, 474 (S.D.N.Y. 2001) (quoting Colo. River Water Conservation Dist. , 424 U.S. at 817, 96 S.Ct. 1236 ).

2. The State Action and this Matter are "Parallel" Proceedings

"[A] finding that the concurrent proceedings are ‘parallel’ is a...