S. Atl. Cos. v. Sch. Bd. of Orange Cnty.
| Decision Date | 07 May 2015 |
| Docket Number | Case No: 6:15-cv-254-Orl-31TBS |
| Parties | SOUTHERN ATLANTIC COMPANIES, LLC and SOUTHERN ATLANTIC ELECTRIC COMPANY, INC., Plaintiffs, v. SCHOOL BOARD OF ORANGE COUNTY, FLORIDA, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
This matter comes before the Court without a hearing on the motions to dismiss (Doc. 3, 5) filed by the Defendant, the School Board of Orange County, Florida (henceforth, the "School Board"), and the responses in opposition filed by Southern Atlantic Companies, LLC (henceforth, "Southern Atlantic") (Doc. 14) and by Southern Atlantic Electric Company, Inc. (henceforth, "SAE") (Doc. 13).
According to the allegations of the First Amended Complaint (Doc. 2-20) (henceforth, the "FAC"), which are accepted in pertinent part as true for purposes of resolving these motions to dismiss, this dispute stretches back to 2010, when Southern Atlantic submitted a bid to perform electrical work on a renovation project at Oak Ridge High School in Orange County. Wharton-Smith, Inc. ("Wharton-Smith"), the School Board's construction manager on the renovation project, did not select Southern Atlantic's bid. Believing it should have been the winning bidder,Southern Atlantic initiated a bid protest against the School Board. The School Board tendered the defense of the bid protest to Wharton-Smith, which retained counsel to defend the School Board.
Florida Statute § 255.05161 and School Board policy require entities engaging in bid protests to obtain a bond - referred to as a "protest bond" - in the event the Board is awarded its attorney's fees and costs against the protester. Southern Atlantic obtained a protest bond (henceforth, the "Bond") from International Fidelity Insurance Company (henceforth, "International Fidelity") in the amount of $127, 920. To obtain the Bond, Southern Atlantic was required to execute an indemnity agreement in favor of International Fidelity. In that agreement, SAE also agreed to indemnify International Fidelity.
Southern Atlantic was unsuccessful in its bid protest against the School Board. The Administrative Law Judge ("ALJ") presiding over the proceedings concluded that Wharton-Smith was not the School Board's agent and therefore the School Board could not be held responsible for Wharton-Smith's decision to select someone other than Southern Atlantic for the electricalsubcontract. On November 8, 2010, the School Board submitted a proposed order to the ALJ. In the proposed order, the School Board was awarded its attorney's fees and costs. However, the ALJ's recommended order - issued on November 10, 2010 - did not contain such an award.
Both parties had the right to submit "exceptions" to the ALJ's recommended order, but only Southern Atlantic did so. On February 8, 2011, after a hearing on Southern Atlantic's exceptions, the School Board entered the ALJ's recommended order without alteration. Neither party appealed from the entry of that order.
On February 24, 2011, the School Board submitted a claim on the Bond to International Fidelity for the attorney's fees and costs incurred during the bid protest. On May 26, 2011, International Fidelity denied the claim on the grounds that the ALJ had not awarded fees and costs. Subsequently, the School Board assigned its rights with respect to the Bond to Wharton-Smith. Wharton-Smith filed suit (henceforth, the "Bond Action") in Florida court against International Fidelity on August 12, 2011. On November 6, 2012, the Florida court found that it lacked subject matter jurisdiction over Wharton-Smith's claim against the Bond. The Florida court awarded summary judgment to International Fidelity.
On October 21, 2014, Southern Atlantic and SAE filed the instant suit in state court against the School Board, generally alleging that the School Board had retaliated against Southern Atlantic for having initiated the bid protest. On January 20, 2015, Southern Atlantic and SAE filed the FAC, asserting for the first time that the School Board's actions violated 42 U.S.C. §1983. Relying on this alleged violation of federal law, the School Board timely removed the case to this court pursuant to 28 U.S.C. §§1331 and 1446(b)(3).
In the FAC, the Plaintiffs assert the following claims: retaliation in violation of Florida's Public Sector Whistle-Blower's Act (henceforth, the "FPSWA"), §§112.3187-112.31895, FloridaStatutes (Count I); First Amendment retaliation in violation of 42 U.S.C. § 1983; breach of contract (Count III); and common law indemnity (Count IV). In Count V of the FAC, the Plaintiffs seek a declaratory judgment that the School Board had not had the right to assign the Bond to Wharton-Smith and had been obligated to return the Bond to Southern Atlantic.2 By way of the instant motions, the School Board seeks dismissal as to all five counts asserted by SAE (Doc. 3) and by Southern Atlantic (Doc. 5).
Federal Rule of Civil Procedure 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief" so as to give the defendant fair notice of what the claim is and the grounds upon which it rests, Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957), overruled on other grounds, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A Rule 12(b)(6) motion to dismiss for failure to state a claim merely tests the sufficiency of the complaint; it does not decide the merits of the case. Milbum v. United States, 734 F.2d 762, 765 (11th Cir.1984). In ruling on a motion to dismiss, the Court must accept the factual allegations as true and construe the complaint in the light most favorable to the plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir.1988). The Court must also limit its consideration to the pleadings and any exhibits attached thereto. Fed. R. Civ. P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993).
The plaintiff must provide enough factual allegations to raise a right to relief above the speculative level, Twombly, 550 U.S. at 555, 127 S.Ct. at 1966, and to indicate the presence of the required elements, Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1302 (11th Cir.2007). Conclusoryallegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal. Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).
In Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court explained that a complaint need not contain detailed factual allegations, Id. at 1949 (internal citations and quotations omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'show[n]' - 'that the plaintiff is entitled to relief.'" Id. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)).
The School Board argues that SAE has failed to state any claims against it and cannot do so. The School Board asserts that the only connection alleged between SAE and the instant dispute is that SAE agreed to indemnify International Fidelity in connection with the protest bond obtained by Southern Atlantic and that SAE has not included any allegations in the First Amended Complaint that would support a finding of liability in its favor. In response, SAE challenges these assertions only in regard to Count IV, the indemnity count.3 Accordingly, the Court finds that the remaining four counts should be dismissed with prejudice as to SAE.
In Count IV, SAE (along with Southern Atlantic) seeks indemnification from the School Board "for the damages they incurred in defending the Bond Action, indemnifying [International Fidelity], and in pursuing this Action - all of which include, but are not limited to, a substantial amount of attorneys' fees and costs." (FAC at 14). In its response to the motion to dismiss, however, SAE does not attempt to justify its entitlement to indemnification for any damages it incurred in defending the Bond Action or in bringing this suit.
SAE does allege in Count IV that it was sued, pursuant to the indemnity agreement, by International Fidelity, which sought to recover costs and fees expended in defending Wharton-Smith's claim against the Bond.4 SAE argues that it is "a contractual indemnitor with vicarious or derivative liability to IFIC" and therefore it may seek common law indemnity from the School Board "since the School Board is responsible for the wrong that caused injury to IFIC." (Doc. 13 at 6).
Tsafatinos v. Family Dollar Stores of Florida, Inc., 116 So. 3d 576, 581 (Fla. 2d DCA 2013).
Although there is an allegation in the FAC that International Fidelity has sued the Plaintiffs, the FAC does not contain an allegation that either Plaintiff has paid (or will have to pay) anything to International Fidelity in connection with the Bond Action. Assuming arguendo that SAE has had to pay International Fidelity, the allegations in the FAC are that the payment was required by the indemnification...
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