Sweetwater Apartments, P.A., LLC v. Ware Constr. Servs., Inc.
| Decision Date | 03 August 2012 |
| Docket Number | CASE NO. 2:11-CV-155-WKW |
| Parties | SWEETWATER APARTMENTS, P.A., LLC, Plaintiff, v. WARE CONSTRUCTION SERVICES, INC., d/b/a WCS CONSTRUCTION, INC., and THE GUARANTEE COMPANY OF NORTH AMERICA USA, Defendants. |
| Court | U.S. District Court — Middle District of Alabama |
[WO]
Plaintiff Sweetwater Apartments, P.A., LLC, brings this breach-of-contract lawsuit against Defendants Ware Construction Services, Inc., ("WCS") and The Guarantee Company of North America USA ("GCNA"). The case is before the court on GCNA's Motion for Summary Judgment (Doc. # 43), which is accompanied by a brief and an evidentiary submission. (Doc. # 44.) Plaintiff filed a response in opposition (Doc. #56), to which GCNA replied. (Doc. # 61.) Upon consideration of the parties' briefs, the relevant law, and the record as a whole, the court finds that GCNA's Motion for Summary Judgment is due to be denied.
Subject matter jurisdiction is exercised pursuant to 28 U.S.C. § 1332. Personal jurisdiction is not contested and is supported by adequate allegations. Venue is proper in the Middle District of Alabama, having previously been transferred from the Southern Division to the Northern Division. (Feb. 29, 2012 Order (Doc. # 50).)
"Summary judgment is appropriate 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Greenberg v. BellSouth Telecomms., Inc., 498 F.3d 1258, 1263 (11th Cir. 2007) (per curiam) (quoting Fed. R. Civ. P. 56(a)). The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record, including pleadings, discovery materials and affidavits], which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant may meet this burden by presenting evidence indicating there is no dispute of material fact or by showing that the nonmoving party has failed to present evidence in support of some element of its case on which it bears the ultimate burden of proof. Id. at 322–24.
If the movant meets its evidentiary burden, the burden shifts to the nonmoving party to establish, with evidence beyond the pleadings, that a genuine issue material to each of its claims for relief exists. Celotex Corp., 477 U.S. at 324; Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). What is material is determined by the substantive law applicable to the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "The mere existence of some factual dispute will not defeat summary judgment unless that factual dispute is material to an issue affecting the outcome of the case." McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003) (per curiam) (internal quotation marks and citation omitted).
A genuine issue of material fact exists when the nonmoving party produces evidence that would allow a reasonable fact-finder to return a verdict in its favor. Greenberg, 498 F.3d at 1263; Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001). However, if the evidence on which the nonmoving party relies "is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249–50 (citations omitted). "A mere 'scintilla' of evidence supporting the [nonmovant's] position will not suffice; there must be enough of a showing that the [trier of fact] could reasonably find for that party," Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990), and the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts,"Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Conclusory allegations based on subjective beliefs are likewise insufficient to create a genuine issue of material fact and do not suffice to oppose a motion for summary judgment. Holifield v. Reno, 115 F.3d 1555, 1564 n.6 (11th Cir. 1997) (per curiam). Hence, when a plaintiff fails to set forth specific facts supported by appropriate evidence sufficient to establish the existence of an element essential to his case and on which the plaintiff will bear the burden of proof at trial, summary judgment is due to be granted in favor of the moving party. Celotex Corp., 477 U.S. at 323.
On summary judgment, the facts must be viewed in the light most favorable to the nonmovant. See Lee v. Ferraro, 284 F.3d 1188, 1190 (11th Cir. 2002). Thus, "'facts, as accepted at the summary judgment stage of the proceedings, may not be the actual facts of the case.'" Id. (quoting Priester v. City of Riviera Beach, 208 F.3d 919, 925 n.3 (11th Cir. 2000)).
In the fall of 2007, Sweetwater contracted with WCS, as the general contractor, for the construction of a multi-unit private apartment complex in Prattville, Alabama. On October 22, 2007, WCS subcontracted with Wainwright to install the complex's storm drain system. (Subcontract (Ex. B to Doc. # 44).) At Wainwright's request, and in conformance with the subcontract, GCNA issued an AIA A312 performancebond to cover the subcontract. (Performance Bond (Ex. A to Doc. # 44).) Wainwright was the named obligee on the bond, and Sweetwater was added as a dual obligee.1 The project was completed in the fall of 2008. On November 10, 2008, the City of Prattville issued a Certificate of Occupancy. On November 11, 2008, Wainwright issued Sweetwater a one-year warranty in conformity with the subcontract's requirements. (Warranty (Ex. 6 to Doc. # 56).)
On May 26, 2009, Sweetwater notified Wainwright that large sink holes on the property needed to be repaired.2 (May 26, 2009 Fax (Ex. C to Doc. # 44).) On June 10, 2009, Sweetwater sent a letter to WCS and Wainwright, seeking repairs to be made to the storm drain pipe servicing pursuant to the warranty. (June 10, 2009 Letter (Ex. C to Doc. # 44).) Wainwright replied that it would meet to discuss the repairs but that it maintained that the "installation of [the] storm drain pipe was properly done according to design plans . . . ." (June 12, 2009 Letter (Ex. C to Doc. # 44).) Throughout that summer, Sweetwater contacted Wainwright numerous times, asking Wainwright to make the repairs to the storm drains and insisting that these repairs were covered under the warranty. Wainwright never made the repairs.
Finally, on October 13, 2009, Sweetwater notified GCNA of its attempts to have Wainwright fix the issues at the apartment complex. Sweetwater requested that GCNA "as surety for [Wainwright], step in and complete [the] repairs as required to the storm drain." (Oct. 13, 2009 Letter (Ex. C to Doc. # 44).) Wainwright and GCNA both assured Sweetwater that Wainwright would make the repairs. (Oct. 14, 2009 Letter and Oct. 27, 2009 Letter (Ex. C to Doc. # 44).) GCNA noted that it reserved its rights and defenses under the bond.
In December 2009, Sweetwater again wrote to Wainwright and GCNA that Wainwright had yet to make the requested repairs. (Dec. 14, 2009 (Ex. C to Doc. # 44).) At the end of December, Wainwright filed for bankruptcy. (Mar. 29, 2010 Letter (Ex. 3 to Doc. # 56).) In early January 2010, GCNA informed Sweetwater of its position "that the assertion of any claim under the performance bond [was] premature" because there were "specific conditions precedent to the assertion of any claim under the performance bond which [had] not been met[.]" (Jan. 4, 2010 Letter (Ex. 1 to Doc. # 56).) Sweetwater requested a meeting with GCNA and Wainwright pursuant to § 3.1 of the bond. GCNA declined to attend the meeting. (Feb. 8, 2010 Letter (Ex. 5 to Doc. # 56).) On March 9, 2010, Sweetwater declared Wainright to be "in default" and hired an outside contractor to make the repairs. (Mar. 9, 2010 Letter (Ex. 2 to Doc. # 56).) In response, Wainwright informed Sweetwater that it had filedfor bankruptcy in December and to direct all communications to its bankruptcy attorney. (Mar. 29, 2010 Letter.)
Sweetwater filed suit on March 4, 2011, against WCS and GCNA and brought claims for breach of the prime contract, breach of the bond contract, and breach of warranty. Wainwright was not added as a party because it had filed for bankruptcy. On March 26, 2012, WCS was permitted to add Wainwright as a third-party defendant as the bankruptcy court had issued an order terminating the automatic stay. WCS filed a third-party complaint against Wainwright, asserting claims for indemnity (contractual and common law) and breach of warranty. (Doc. # 57.) The parties engaged in a private mediation on May 3, 2012, during which Sweetwater resolved its claims against WCS, and WCS resolved its claims against Wainwright. (Docs. # 70 & 71.) Both WCS and Wainwright have since been dismissed as parties to this action. Sweetwater and GCNA were unable to resolve their disputes during mediation, leaving GCNA's motion for summary judgment to be decided.
GCNA asserts several arguments as to why its motion for summary judgment is due to be granted. First, GCNA argues that neither Sweetwater nor WCS has met all of the conditions precedent necessary to make a claim under the bond. Second, GCNA argues that Sweetwater's claim is barred by the bond's limitations period.Third, GCNA argues that Sweetwater's claims for replacement of the entire drainage system are outside the warranty period. GCNA's arguments regarding the bond's limitations period will be addressed first, followed by a discussion of the parties' obligations under the bond, and finishing with GCNA's arguments regarding the warranty period.
GCNA argues that Sweetwater's claims are time barred pursuant to § 9 of the bond. Section nine...
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