Taylor Pipeline Const. v. Directional Road Boring, CIV.A. 1:04-CV-599.

• Decision Date: 26 April 2006
• Docket Number: No. CIV.A. 1:04-CV-599.,CIV.A. 1:04-CV-599.
• Citation: 438 F.Supp.2d 696
• Parties: TAYLOR PIPELINE CONSTRUCTION, INC., Plaintiff, v. DIRECTIONAL ROAD BORING, INC., David J. O'Leary, Hypower, Inc., and P.D.G. Electric Company, Defendants.
• Court: U.S. District Court — Eastern District of Texas

438 F.Supp.2d 696

TAYLOR PIPELINE CONSTRUCTION, INC., Plaintiff, v. DIRECTIONAL ROAD BORING, INC., David J. O'Leary, Hypower, Inc., and P.D.G. Electric Company, Defendants.

No. CIV.A. 1:04-CV-599.

United States District Court, E.D. Texas, Beaumont Division.

April 26, 2006.

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Nancy Hesse Hamren of Coasts Rose Yale Ryman & Lee Houston, TX, for Hypower, Inc.

David E. Finck and Monica F. Oathout of Schwartz Junell Greenberg & Oathout, Houston, TX, for PDG Electric Company.

MEMORANDUM AND ORDER

CRONE, District Judge.

Pending before the court are Defendant Hypower, Inc.'s ("Hypower") Motion for Summary Judgment (# 46) and Defendant P.D.G. Electric Company's ("P.D.G.") Motion for Summary Judgment (# 47). Defendants seek summary judgment on an action brought by Plaintiff Taylor Pipeline Construction, Inc. ("Taylor") for sworn account, conversion and negligence, quantum meruit and unjust enrichment, fraud, violation of the Texas Construction Trust Fund Act, and violation of the Prompt Pay Act. Having reviewed the pending motions, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that summary judgment for both Defendants is warranted.

I. Background

In a document dated May 1, 2002, the City of Houston announced its intention to award P.D.G., a Florida corporation with its principal place of business in Florida, a contract to perform construction and improvements at George Bush Intercontinental Airport ("IAH project") in Houston, Harris County, Texas. P.D.G. and the City of Houston later formalized their agreement in a written contract ("prime contract"). On May 15, 2002, P.D.G. entered into a teaming agreement with Hypower, a Nevada corporation with its principal place of business in Florida. The teaming agreement provided that "[f]rom time to time, both PDG and Hypower may obtain contracts from General Contractors, Agencies, FAA, or other customers and PDG or Hypower may choose to issue a subcontract to the other." P.D.G. and Hypower executed an addendum to the original teaming agreement on September 25, 2002, under which P.D.G. would act as general contractor and Hypower would serve as a subcontractor on the IAH project.

P.D.G. entered into other subcontracts pertaining to the IAH project, including an agreement with Directional Road Boring ("DRB"), signed December 9, 2002, to provide equipment and labor to install all bores. DRB is a Louisiana corporation with its principal place of business in Louisiana. Its president David J. O'Leary ("O'Leary") is a citizen and resident of the State of Louisiana. Prior to signing DRB's subcontract with P.D.G., O'Leary approached Taylor in Dayton, Liberty County, Texas, about performing work on the IAH project. Taylor is a Texas corporation with its principal place of business in Texas. Doug Taylor ("D. Taylor") is the owner of Taylor, Jimmy Taylor ("J. Taylor") serves as its president, and Julia Taylor ("Ms. Taylor") acts as its treasurer and secretary. O'Leary and Ms. Taylor, on behalf of J. Taylor, signed a contract ("sub-subcontract") dated November 22, 2002, listing DRB as contractor, Taylor as subcontractor, and Hypower as owner. According to this sub-subcontract, Taylor was responsible for installing telecommunications and electrical steel casing or conduit throughout the airport using the dry boring method of installation. Neither P.D.G. nor Hypower signed the subcon, tract between DRB and Taylor, entered into any negotiations with Taylor, or executed a separate contract with Taylor.

Plaintiff commenced work in December 2002. In his deposition, J. Taylor described the system governing requests for payment on the IAH project. Taylor was to submit its time and expenses to DRB. DRB, in turn, was to provide P.D.G. with its invoices. P.D.G. was then to give its billing statements to the City of Houston. Once P.D.G. received payment from the City, P.D.G. was to pay DRB. DRB, upon receiving payment from P.D.G., was to compensate Taylor. In accordance with this system, Plaintiff sent DRB several invoices for labor rendered, equipment rented, and materials furnished: (1) invoice # 1588, dated February 6, 2003, in the amount of $54,221.67; (2) invoice # 1699, dated March 19, 2003, in the amount of $36,986.31; and (3) invoice # 1742, dated April 7, 2003, in the amount of $8,739.90.

Although P.D.G. paid DRB for its work on the project, DRB failed to pay Taylor. Plaintiff claims it spoke with Mike Arroyo ("Arroyo"), a Hypower project manager, between ten and twelve times beginning in March 2003, about DRB's failure to pay Taylor's invoices. Taylor alleges Arroyo assured Plaintiff that DRB would be paid shortly and that Taylor, in turn, would receive its compensation. Plaintiff asserts it also discussed the nonpayment issue with a P.D.G. project manager Max Hurd ("Hurd") in May or June 2003. J. Taylor testified during his deposition, however, that he never sent any written correspondence to P.D.G. or Hypower alerting either company to the fact that DRB had failed to pay Taylor for its work on the IAH project. Even though Plaintiff had not received payment from DRB, it continued its work on the project for some period of time. Finally, in April 2003, Plaintiff shut down operations and walked off the job.

As early as January or February 2003, Plaintiff learned that this public project was bonded. In June 2003, Taylor decided to make a claim against the bond due to DRB's failure to pay. It was not until October 6, 2003, however, that Taylor actually made the claim. The bond company responded to the claim by stating that it needed supporting documentation. While it remains unclear as to whether the supporting documentation was eventually forwarded by Taylor to the bond company, in the send, Taylor's claim was denied.

On April 7, 2004, Taylor filed suit against P.D.G., Hypower, DRB, and O'Leary in the 75th Judicial District Court of Liberty County, Texas, seeking to collect on its unpaid invoices. In August 2004, Plaintiff entered into a settlement agreement with DRB. According to the agreement, DRB was to pay $5,000.00 per month beginning September 15, 2004, and on the fifteenth day of each month. Upon timely payment of $75,000.00, the outstanding indebtedness was to be deemed paid in full. After providing Plaintiff with one check for $5,000.00, DRB failed to make any further installment payments.

On September 17, 2004, P.D.G., with the consent of Hypower, DRB, and O'Leary, removed the case to this court, on the basis of diversity jurisdiction under 28 U.S.C. § 1441. In its first amended petition, Plaintiff asserts an action for sworn account in addition to alleging claims for conversion and negligence, quantum meruit and unjust enrichment, fraud, violation of the Texas Construction Trust Fund Act, and violation of the Prompt Pay Act. P.D.G. and Hypower each filed an amended answer on April 1, 2005.

On July 25, 2005, Plaintiff filed a motion for entry of default and default judgment against DRB and O'Leary. This court held a show cause hearing on October 18, 2005. Neither DRB nor O'Leary appeared in court in person or through counsel to show cause why default should not be entered against them. Accordingly, the court granted a default judgment in favor of Taylor and against DRB and O'Leary on October 21, 2005, with final judgment to be entered at a later date pending disposition of the claims against P.D.G. and Hypower. On December 1, 2005, P.D.G. and Hypower filed the instant motions seeking summary judgment on the claims asserted by Taylor.

II. Analysis

A. Summary Judgment Standard

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. Civ. P. 56(c). The parties seeking summary judgment bear the initial burden of informing the court of the basis for their motions and identifying those portions of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, which they believe demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Warfield v. Byron, 436 F.3d 551, 557 (5th Cir.2006); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir.2005); Martinez v. Schlumberger, Ltd., 338 F.3d 407, 411 (5th Cir.2003); Terrebonne Parish Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 877 (5th Cir.2002).

"A fact is 'material' if it 'might affect the outcome of the suit under governing law.'" Bazan v. Hidalgo County, 246 F.3d 481, 489 (5th Cir.2001) (emphasis in original) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505); see Cooper Tire & Rubber Co. v. Farese, 423 F.3d 446, 454 (5th Cir.2005); Harken Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 471 (5th Cir.2001); Merritt-Campbell, Inc. v. RxP Prods., Inc., 164 F.3d 957, 961 (5th Cir.1999); Burgos v. Southwestern Bell Tel. Co., 20' F.3d 633, 635 (5th Cir.1994). "An issue is `genuine' if it is real and substantial, as opposed to merely formal, pretended, or a sham." Bazan, 246 F.3d at 489 (emphasis in original). Thus, a genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505; accord EMCASCO Ins. Co. v. American Int'l Specialty Lines Ins. Co., 438 F.3d 519, 523 (5th Cir.2006); Cooper Tire & Rubber Co., 423 F.3d at 454; Harken Exploration Co., 261 F.3d at 471; Merritt-Campbell, Inc., 164 F.3d at 961. The moving parties, however, need not...