Quality Mechanical Contractors v. Moreland Corp., CV-S-98-00414-PMP (RJJ).
| Decision Date | 03 September 1998 |
| Docket Number | No. CV-S-98-00414-PMP (RJJ).,CV-S-98-00414-PMP (RJJ). |
| Citation | 19 F.Supp.2d 1169 |
| Parties | QUALITY MECHANICAL CONTRACTORS, INC., a Nevada Corporation, Plaintiff, v. MORELAND CORPORATION, a California corporation, Las Vegas VA 1, LLC; United States Government, Department of Veterans Administration; American National Insurance Company, Fidelity and Deposit Company of Maryland; R.M.A., Inc., a Utah corporation; and R.M. Anderson & Sons, a Utah joint venture, Defendant. |
| Court | U.S. District Court — District of Nevada |
Richard L. Peel, Whitehead & Peel, Henderson, NV, Brian S. Case, Case & Baker, LLP, Costa Mesa, CA, for plaintiff.
Steven W. Myhre, AUSA, Kathryn E. Landreth, U.S. Attorney, Office of U.S. Attorney, Las Vegas, NV, for defendant.
Presently before the Court is Defendant United States Department of Veterans Affairs' ("VA") Motion to Dismiss or for Summary Judgment (# 30) filed on May 15, 1998. On May 19, 1998, the VA filed an Erratum to its Motion to Dismiss or for Summary Judgment (# 32). Plaintiff Quality Mechanical Contractors, Inc. ("Quality") filed a Response/Opposition (# 44) on June 9, 1998. On June 26, 1998, the VA filed a Reply (# 56). On July 2, 1998, Quality filed a Notice of Errata Re: Plaintiff's Response/Opposition (# 59).
Quality was a subcontractor on the Department of Veterans Affairs ("VA") Las Vegas Ambulatory Care Center in Las Vegas, Nevada ("the Project"). Defendants Moreland Corporation ("Moreland") and/or Las Vegas VAI, L.L.C. ("Las Vegas L.L.C.") own the project, and the VA leases it for use as an outpatient client. Quality claims that it is owed $1,744,712.87 for its work on the Project and has brought suit against the VA, Moreland, Las Vegas L.L.C., RMA Corporation ("RMA"), various insurance and surety companies and R.M. Andersons & Sons, Inc. seeking recovery. As to the VA, Quality claims that it is entitled to recovery under equitable lien and unjust enrichment theories.
The parties involved built the Project to suit the needs of the VA. Moreland hired RMA as the prime contractor, and RMA in turn hired Quality to perform subcontracting plumbing and heating/air conditioning work on the Project. The VA did not require RMA to post a bond in favor of the subcontractors under the Miller Act.1 The nature of the VA's involvement in the construction of the Project is disputed.
Quality claims that the VA's was heavily involved in construction, while VA maintains that it is just a lessee and had minimal involvement with the construction. According to Quality, the VA was active in soliciting offers for the construction of the Project. (Burnthon Decl. ¶ 3, attached to Pl.'s Opp'n.) In contrast, the VA insists that the VA did not negotiate with any contractors for construction of the Project. .)
Quality also contends that the VA was actively involved with the day to day process of construction. The VA appointed a resident engineer whose duties included acquiring contract specifications, holding construction meetings, inspecting work, and issuing change orders. (Burnthon Decl. ¶ 4. and attached exhibits.) According to Quality, the VA also followed its normal contract procurement procedures and contract regulations, was heavily involved in the Project's design, and issued numerous change orders. (Burnthon Decl. ¶ 4.) While not directly disputing Quality's contentions, the VA claims that it did not review the construction contracts between Moreland and any of the contractors, nor does it even have a copy of any construction contract. (Hill Decl. ¶ 4.)
Quality finished its work in July 1998, and the VA began its occupancy of the Project in the summer of 1998 under a fifteen year lease.2 (Hill Decl. ¶ 3.) Quality claims that RMA did not pay it for all the extra work it was required to complete. Moreover, Quality insists it was required to perform this extra work partially as a result of VA's action during the construction process. On November 25, 1997, Quality sent a letter to the VA notifying the VA that it had not been paid and would be requesting payment from the VA. (Letter from Spilsbury to Hill, Hayborn and Tyler of 11/25/97, Ex. 1, attached to Pl.'s Opp'n.) In the instant suit, Quality seeks an equitable lien on funds currently held by the VA as part of its lease obligation. It also seeks recovery for unjust enrichment that it claims occurred as a result of the VA enjoying the fruits of Quality's labor and the materials provided by Quality.
The VA seeks to dismiss Quality's claims against the VA for two reasons. First, the VA argues that the Court lacks subject matter jurisdiction. Second, the VA argues that the Court should dismiss or grant summary judgment on the claims because Quality fails to state a claim upon which relief can be granted.
The VA contends that the Court lacks subject matter jurisdiction because Quality has not pled a waiver of sovereign immunity and because the United States has not waived immunity in this case. Quality counters that it adequately pled a waiver and that the Ninth Circuit Court of Appeals found that the United States has waived immunity.
Federal Rule of Civil Procedure 12(b)(1) allows a court to dismiss a Complaint for a lack of subject matter jurisdiction. Under the principle of sovereign immunity, the United States may only be sued where it has expressly consented to such suit by statute. Block v. North Dakota ex rel. Bd. of University and School Lands, 461 U.S. 273, 287, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983). Therefore, whether the United States has consented to be sued is a question of this Court's subject matter jurisdiction. United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) (); McCarthy v. United States, 850 F.2d 558, 560 (9th Cir.1988). A suit against a federal agency which seeks relief against the sovereign is, in effect, a suit against the sovereign. Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 687-88, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949). Accordingly, the principles of sovereign immunity apply to that agency. Id.
In considering whether the Court has subject matter jurisdiction, the Court may review affidavits and other evidence to resolve factual disputes on the issue of jurisdiction without converting the Defendant's Motion to Dismiss into one for summary judgment. McCarthy, 850 F.2d at 560; see Capitol Indus.-EMI, Inc. v. Bennett, 681 F.2d 1107, 1118 n. 29 (9th Cir.1982); Thornhill Publishing Co. v. General Telephone & Electronics Corp., 594 F.2d 730, 733 (9th Cir.1979). Due to the limited jurisdiction of federal courts, the plaintiff bears the burden of proving that this Court has jurisdiction. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).
In its Complaint, Quality alleged that it was entitled to an equitable lien because the Project was paid for with public funds, the VA had not required RMA to post a bond in Quality's favor as required by the Miller Act, and Quality had notified the VA of its right to payment. (First Am.Compl. at 6-7 ¶¶ 38-42.) Quality asserted federal question and diversity jurisdiction, but did not point to a statute that waives immunity. Consequently, the VA argues that this Court should dismiss Quality's claims against it. Quality argues that it has pled a waiver of sovereign immunity sufficient to satisfy the requirement of notice pleading by pleading a Miller Act violation, pleading the fact that the Project was built with federal funds, pleading notice to the VA, and requesting an equitable remedy.
This Court has previously stated that a "[t]he party suing the United States must point to an unequivocal waiver of sovereign immunity." McMillan v. Department of Interior, 907 F.Supp. 322, 325 (D.Nev.1995) (citing Holloman v. Watt, 708 F.2d 1399, 1402 (9th Cir.1983)); see also Malone v. Bowdoin, 369 U.S. 643, 648, 82 S.Ct. 980, 8 L.Ed.2d 168 (1962). However, a party can plead federal jurisdiction implicitly in a complaint. 2 James Wm. Moore et al., Moore's Federal Practice ¶ 8.03(3) (3rd ed.1998). If the party alleges facts that if proved would establish jurisdiction, then the party has sufficiently pled jurisdiction. Id.; see also Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1211-12 (9th Cir.1980) (). Therefore, if Quality's factual allegations mirror the facts needed for a statute that does waive immunity, this Court will not dismiss the Complaint because Quality did not specifically plead the statute that provides the waiver.
Under the Miller Act, the United States must require a contractor to post a payment bond in favor of persons supplying labor and materials before awarding a contract for the construction of a public work. 40 U.S.C.A. § 270a(a) (West Supp.1998). If the contractor does not pay those supplying labor or materials, those people can bring suit on the bond in the name of the United States for their use. 40 U.S.C.A. § 270b.
In cases where the United States has failed to require the bond, laborers and materials providers have attempted to bring suit against the United States. However, courts have been reluctant to find that the United States waived its sovereign immunity in those cases. Arvanis v. Noslo Engineering Consultants, Inc., 739 F.2d 1287, 1289-1291 (7th Cir.1984) (), cert. denied, 469 U.S. 1191, 105 S.Ct. 964, 83 L.Ed.2d 969 (1985); United Elec. Corp. v. United States, 227 Ct.Cl. 236, 647 F.2d 1082, 1084 (...
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