Scollick ex rel. United States v. Narula

• Docket Number: 1:14-cv-01339-RCL
• Decision Date: 29 July 2022
• Parties: ANDREW SCOLLICK, ex rel. UNITED STATES OF AMERICA, Plaintiff-Relator, v. VIJAY NARULA, et al, Defendants.
• Court: U.S. District Court — District of Columbia

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ANDREW SCOLLICK, ex rel. UNITED STATES OF AMERICA, Plaintiff-Relator, v. VIJAY NARULA, et al, Defendants.

No. 1:14-cv-01339-RCL

United States District Court, District of Columbia

July 29, 2022

MEMORANDUM OPINION

Hon Royce C. Lamberth United States District Judge.

Plaintiff-relator Andrew Scollick brought this case under the False Claims Act ("FCA"), alleging an elaborate plot by thirteen defendants to defraud the federal government by posing as service-disabled veteran-owned small businesses ("SDVOSB") to obtain set-aside contracts.^[1]Second Am. Compl., ECF No. 298. Before this Court are twelve motions for summary judgment. Plaintiff-relator moves for partial summary judgment^[2] against Centurion Solutions Group, LLC ("CSG") and Amar Gogia, ECF No. 329; against Optimal Solutions and Technologies, Inc. ("OST") Vijay Narula, and Ajay Madan, ECF No. 330; against Hanover Insurance Company ("Hanover"), Hudson Insurance Company ("Hudson"), Centennial Surety Associates Inc. ("Centennial"), and Michael Schendel, ECF No 331; and against Neil Parekh, ECF No. 332. OST, Narula, and Madan in response move for summary judgment against the plaintiff-relator. ECF No. 337. CSG and Gogia similarly move for summary judgment against the plaintiff-relator, ECF No. 338, as do Parekh, ECF No. 341, and Mehta, ECF No. 342. The three insurance companies also move for summary judgment against the plaintiff-relator. See ECF Nos. 334 (Hanover's motion for summary judgment), 335 (Hudson's motion for summary judgment), & 328 (Centennial and Schendel's motion for summary judgment). Finally, Hudson moves for partial summary judgment on its crossclaims for indemnification against crossclaim defendants CSG, Citibuilders, LLC ("Citibuilders"), CB Construction Group, Inc. ("CB"), Gogia, and Parekh. ECF No. 336.

For the reasons explained below, the Court will DENY plaintiff-relator's motions for summary judgment, ECF Nos. 329, 330, 331, & 332; DENY OST, Narula, and Madan's motion for summary judgment against plaintiff-relator, ECF No. 337; DENY CSG and Gogia's motion for summary judgment against plaintiff-relator, ECF No. 338; DENY Parekh's motion for summary judgment against plaintiff-relator, ECF No. 341; GRANT Centennial and Schendel's motion for summary judgment against plaintiff-relator, ECF No. 328; GRANT Hanover's motion for summary judgment against plaintiff-relator, ECF No. 334; GRANT Hudson's motion for summary judgment against plaintiff-relator, ECF No. 335; GRANT Mehta's motion for summary judgment against plaintiff-relator, ECF No. 342; DENY Hudson's motion for partial summary judgment on its crossclaim, ECF No. 336; and DISMISS as moot Madan, Narula, and OST's motions to strike, ECF Nos. 366 & 367.

I. BACKGROUND

The parties here have different understandings of the facts at hand-or, at least, how those facts should be characterized. The Court will note the areas of disagreement.

This case features a large cast of characters. Defendant Vijay Narula is the 100% owner and chief executive officer of OST, an information-technology firm. Pl.'s Statement of Mat. Facts ("Pl.'s Facts"), ECF No. 330-2 ¶ 11. OST also employs Ajay Madan as its chief operating officer. Id. ¶ 33. OST is a successful company and has experience with government contracts in the information-technology sector. Id. ¶ 14. Narula is not a service-disabled veteran, and OST is not a service-disabled veteran-owned small business ("SDVOSB"). Id. ¶ 12.

Defendant Neil Parekh was the owner of two construction companies: Citibuilders^[3] and CB Construction Group, Inc. ("CB"). Id. ¶ 15. Like Narula, Parekh is not a service-disabled veteran. Id. ¶ 16. Parekh met Narula when Citibuilders renovated OST's office space, and the two' companies ultimately developed a subcontracting relationship. Id. ¶¶ 17-18. In 2010, Parekh moved his operations into OST's Washington, D.C. office. Id. ¶ 18. That same year, Parekh transitioned operations from Citibuilders to CB. Id. ¶ 15. Plaintiff-relator Andrew Scollick was employed by Parekh's companies-first Citibuilders and then CB. Id. ¶ 19.

A. Origins of the Alleged Plan

In 2009, Parekh and Narula discussed the possibility of pursuing government construction contracts together-combining OST's contracting experience and Parekh's construction experience. Id. ¶ 20. They even discussed forming a construction "subsidiary of OST," run by Parekh, to bid on certain government contracts. Id. ¶ 26. Parekh and Narula's plan moved beyond nascent discussions, and they even reached out to bonding companies like Centennial to discuss the potential subsidiary. Id. ¶¶ 25-26.

Sometime in 2008, OST learned of a $125 million Federal Aviation Administration ("FAA") SDVOSB set-aside contract known as "System Operations Management and Administrative Support Service" ("SOMASS"). Id. ¶ 31. SDVOSB set-aside contracts are government contracts specifically set aside for companies owned by service-disabled veterans.

CSG Statement of Mat. Facts ("CSG Facts"), ECF No. 338-1 ¶ 9. To be awarded a SDVOSB set-aside contract, a company must be certified as a SDVOSB. Id. Because OST was not an SDVOSB, Pl.'s Facts ¶ 12, it could not bid for the contract alone. However, Narula determined that OST could bid on the SOMASS project if it formed a joint venture with a qualified SDVOSB. Id. ¶ 32. Of course, to do so, Narula needed to find an SDVOSB.

Enter Amar Gogia. Defendant Gogia is a service-disabled veteran and second cousin to Madan, OST's chief operating officer. Id. ¶ 33. In late November 2009, Madan emailed Narula and other OST staff Gogia's army discharge papers. Id. "He is an SDVO, and is willing to talk," Madan said. ECF No. 330-6 at 2. At the end of 2009, Narula and Gogia met in OST's offices to discuss contracting opportunities. Pl.'s Facts ¶ 35. But before Narula and Gogia could pursue any joint contracting venture-like the SOMASS contract-they had to establish a SDVOSB. OST's Resp. to Pl.'s Statement of Mat. Facts ("OST Fact Response"), ECF No. 370-1 ¶ 35.

B. The Creation of Centurion Solutions Group, a "SDVOSB"

By early 2010, Gogia was working to form the new qualifying SDVOSB, Centurion Solutions Group, LLG ("CSG"). Pl.'s Facts ¶ 37. Plaintiff-relator alleges that Madan and Narula helped form the SDVOSB: on an email thread, Gogia appears to seek significant insight from Narula, Madan, and two other members of OST's staff on the new SDVOSB's name and structure. Id. Madan even helped choose the name. Id. OST also submitted filing paperwork on Gogia's behalf. OST Fact Response ¶ 37; Pl.'s Facts ¶ 40. CSG was established as a SDVOSB in 2010. Pl.'s Facts ¶ 42. Defendants dispute the allegation that they were significantly involved in CSG's creation by arguing that the evidence fails to show that Narula, Madan, or other members of OST staff had any "decision making authority." OST Fact Response ¶ 37.

Also while Gogia was establishing CSG in 2009 and early 2010, Madan loaned Gogia $18,000. Pl.'s Facts ¶ 36. In February 23, 2010, Madan sent Gogia another payment of $5,000, which he referred to as "seed monies"-these funds, unlike the prior $ 18,000 loan, were deposited in CSG's new bank account. Id. ¶ 44.

The newly created CSG and OST formed a joint venture to bid on the SOMASS contract, which they were ultimately awarded. Id. ]f 46. Narula and Parekh also began to discuss how they could "use" an SDVOSB like CSG. Id. ¶ 47. Just a month after CSG's formation, Parekh forwarded Narula a list of Department of Veterans Affairs ("VA") SDVOSB set-aside contracts that he had "identified" and "would like to pursue." Id. ¶ 50. Narula put Parekh in touch with Gogia so that "as a team [they] could go after these opportunities." Id. Gogia forwarded CSG's registration materials to Narula. Id. ¶ 53. In March 2010, a meeting was organized with Gogia, Parekh, Narula, and plaintiff-relator Scollick. Id. After the meeting, plaintiff-relator Scollick told Gogia he would send him "a copy of the 1st solicitation we will be pursuing." Id. ¶ 55.

Gogia then moved to register in the CCR and VA's VetBiz VIP databases, databases used by SDVOSB contractors to bid on projects. Id. ¶¶ 54, 56. As part of this registration process, Madan electronically signed an application verifying that he owned 49% of CSG and that CSG was majority-owned and controlled by a service-disabled veteran, as required by the VA's SDVOSB regulations. Id. ¶ 56. A contemporaneous operating agreement shows Madan as 49% owner and Gogia as 51% owner of CSG. Id. ¶ 58. The VA certified CSG as SDVOSB compliant. OST Statement of Mat. Facts ("OST Facts"), ECF No. 337-2 ¶ 77.

C. The Parties' Divergent Narratives on CSG's Operational Leadership

In 2010, CSG started bidding for SDVOSB set-aside contracts in earnest. Pl.'s Facts ¶ 60. It is here where the narrative from the defendants this Court will term the "construction defendants" (OST, CSG, Narula, Gogia, Madan, and Parekh) sharply diverges from the plaintiff-relator's narrative.^[4]

According to the construction defendants, Gogia was at all times in control of CSG. OST Facts ¶ 39. The initial Operating Agreement listed Amar Gogia as the 51% owner of CSG, and that agreement was only amended once-when Gogia became the 100% owner of CSG. Id. ¶¶ 6, 12. Any assistance that OST provided to CSG for bid proposals was solely in a mentorship capacity. Id. ¶ 56.

Plaintiff-relator contests these assertions through several avenues.

First he points to evidence that CSG operations were directed by CB and OST. For example, email correspondence illustrates that CB and OST employees jointly tracked SDVOSB solicitations and prepared (or, at minimum, provided templates for and then reviewed) many bid proposals. Pl.'s Facts ¶ 60. Other emails from CSG's early operations indicate that Gogia...