ThyssenKrupp Steel USA, LLC v. United Forming, Inc.

• Citation: 926 F.Supp.2d 1286
• Decision Date: 29 January 2013
• Docket Number: No. CA 12–00297–C.,CA 12–00297–C.
• Parties: THYSSENKRUPP STEEL USA, LLC, Plaintiff, v. UNITED FORMING, INC., Defendant.
• Court: U.S. District Court — Southern District of Alabama

926 F.Supp.2d 1286

THYSSENKRUPP STEEL USA, LLC, Plaintiff,

v.UNITED FORMING, INC., Defendant.

No. CA 12–00297–C.

United States District Court,

S.D. Alabama,

Southern Division.

Jan. 29, 2013.

Charles William Daniels, Jr., Taylor Noelle Barr, Burr & Forman LLP, Mobile, AL, for Plaintiff.

Bart Gary, Neil Wilcove, Atlanta, GA, J. Hodge Alves, III, Joseph Craig Campbell, W. Alexander Moseley, Hand Arendall LLC, Mobile, AL, for Defendant.

MEMORANDUM OPINION AND ORDER¹

WILLIAM E. CASSADY, United States Magistrate Judge.

Plaintiff ThyssenKrupp Steel USA, LLC (“TKS”)'s motion for summary judgment in its favor on Defendant United Forming, Inc. (“UFI”)'s five-count counterclaim (Doc. 47; see also Docs. 48–50, 52, 70 (UFI's opposition), and 80 (TKS's reply in support)) ² and UFI's motion for summary judgment in its favor on Count I of its counterclaim (Doc. 71; see also Docs. 72 and 87 (TKS's opposition)) came before the Court on January 3, 2013 for hearing ( see Doc. 92). After considering the record, the parties' pleadings, and the arguments presented, in the pleadings and at the hearing, and for the reasons set forth herein, TKS's motion for summary judgment is GRANTED IN PART and DENIED IN PART, as set out below, and UFI's motion for summary judgment is DENIED.

Background

Briefly, this dispute concerns work performed by UFI for TKS at two TKS facilities located in Calvert, Alabama—the Hot Strip Mill (“HSM”) and the Cold Roll Mill (“CRM”). While TKS has filed a complaint against UFI, alleging counts for declaratory judgment, breach of contract, negligence, and misrepresentation ( see generally Doc. 62, first amended complaint), the summary judgment motions now before the Court deal solely with UFI's five-count counterclaim (Doc. 65).

The HSM Project. TKS, under its former name, “ThyssenKrupp Steel and Stainless USA, LLC,” and UFI entered into a written construction agreement under which “UFI agreed to supply services, labor, equipment, materials, things, and items of expense necessary to perform the reinforced concrete work [for the HSM] Building and Equipment Foundations[.]” ( Id. at 11.) ³ After the parties executed the HSM agreement, they agreed upon fifty-three change orders to it. ( Id.) UFI characterizes two of these, Nos. 7 and 53, as significant ( id.), something TKS denies (Doc. 69 at 1). The parties agree, however, that UFI substantially completed its work on the HSM Project. ( Id.)

Four of UFI's five counterclaims deal with the HSM agreement: Count I is a claim for the contract balance on that agreement ( see Doc. 65, ¶¶ 7–10); Count II seeks additional damages under that agreement based on either breach of contract or quantum meruit ( see id., ¶¶ 11–14); Count III is a claim for crane supervision ( see id., ¶¶ 15–18); and Count v. is for unjust enrichment ( see id., ¶¶ 22–25).

The CRM Project. TKS and UFI also entered into a written agreement for UFI to provide reinforced concrete work for the CRM facility. (Id., ¶ 5.) While the parties agree that TKS has paid UFI in full for the CRM project's agreed contract value ( compare id., with Doc. 69, ¶ 5), UFI contends that TKS still owes it “additional compensation for two (2) proposed change orders, and for prejudgment interest on UFI's contract billings” (Doc. 65, ¶ 5).

UFI's fourth counterclaim deals with delay damages on the CRM project. ( See id., ¶¶ 19–21.) ⁴

Summary Judgment Standard

It is well-established that, consistent with Federal Rule of Civil Procedure 56(c), summary judgment is proper “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 a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The party asking 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 ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Id. at 323, 106 S.Ct. 2548. The movant can meet this burden by presenting evidence showing there is no dispute of material fact, or by showing, or pointing out to, the district court 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, 106 S.Ct. 2548.

Once the moving party has met its burden, Rule 56(e) “requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ ” Id. at 324, 106 S.Ct. 2548. To avoid summary judgment, the nonmoving party “must do more than 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, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). On the other hand, the evidence of the nonmovant must be believed and all justifiable inferences must be drawn in its favor. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505. After the nonmoving party has responded to the motion for summary judgment, the court must grant summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

Archie v. Home–Towne Suites, LLC, 749 F.Supp.2d 1308, 1312 (M.D.Ala.2010) (some internal citations modified).

Discussion

I. TKS's motion for summary judgment.

a. Illegality

TKS contends that UFI's use of Liberty Reinforcing Steel, Inc. (“Liberty”) and Reliable Staffing, Inc. (“Reliable”), two entities not licensed by the Alabama Licensing Board for General Contractors (the “Licensing Board”), to complete its work on the HSM project is an absolute bar to UFI recovering on the four counts of its counterclaim (Counts I, II, III, and V) that concern the HSM agreement between TK and UFI. Or, as UFI states in its opposition to TKS's motion, “TKS asserts the HSM Contract valued at over $100 Million is void in its entirety because UFI entered into contracts with two (2) subcontractors who were not licensed by the [Licensing Board].” (Doc. 70 at 8.) While UFI contends that the work performed by Liberty and Reliable represent a miniscule amount of UFI's contract balance claim ( see id. at 8–9),⁵ TKS counters that “[t]here are no exceptions under Alabama law for those like UFI who use[ ] an unlicensed subcontractor to only perform part of the work” (Doc. 80 at 3).

The Alabama General Contractor's Practice Act (the “AGCPA”), ALA. CODE § 34–8–1 et seq., “is ... regulatory legislation designed to protect the public against incompetent contractors and to assure properly built structures that are free from defects and dangers to the public.” Ipsco Steel (Alabama) Inc. v. Kvaerner U.S. Inc., No. Civ.A.01–0730–CG–C, 2005 WL 1244929, at *4 (S.D.Ala. May 25, 2005) (quoting Thomas Learning Cent., Inc. v. McGuirk, 766 So.2d 161, 169 (Ala.Civ.App.1998) and citing White v. Miller, 718 So.2d 88, 89–90 (Ala.Civ.App.1998); Architectural Graphics & Constr. Servs., Inc. v. Pitman, 417 So.2d 574, 576 (Ala.1982); Cooper v. Johnston, 283 Ala. 565, 219 So.2d 392 (1969)). Under the AGCPA,

one who, for a fixed price, commission, fee, or wage undertakes to construct or superintend or engage in the construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving or project or any improvement in the State of Alabama where the cost of the undertaking is fifty thousand dollars ($50,000) or more, shall be deemed and held to have engaged in the business of general contracting in the State of Alabama.

Id., § 34–8–1(a). Similarly,

a “subcontractor” is defined to be one who constructs, superintends, or engages in the construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving, or project or any improvement in the State of Alabama where the cost of the undertaking is fifty thousand dollars ($50,000) or more under contract to general contractor as defined in subsection (a) or another subcontractor.

Id., § 34–8–1(c).

And in B.D. Stephenson Trucking, L.L.C. v. Riverbrooke Capital Partners, L.L.C., Civil Action No. 06–0343–WS–M, 2006 WL 2772673 (S.D.Ala. Sept. 25, 2006),⁶ this Court observed,

[a]s a matter of Alabama statute, “[a]ny person, firm, or corporation not being duly authorized who shall engage in the business of general contracting in this state ... shall be deemed guilty of a Class A misdemeanor.” Ala.Code § 34–8–6(a). Alabama courts have taken this principle one step further, declaring that “express or implied contracts with unlicensed ‘general contractors' [are] unenforceable as a violation of public policy. Such contracts are illegal and unenforceable by the unlicensed ‘general contractor.’ ” Med Plus Properties v. Colcock Constr. Group, Inc., 628 So.2d 370, 374 (Ala.1993) (citations omitted); see also Architectural Graphics, 417 So.2d at 576 (“a contract by an unlicensed ‘general contractor,’ as defined in § 34–8–1, is null and void as a violation of that public policy. Such contracts are illegal and unenforceable by the unlicensed general contractor.”). Moreover, “an unlicensed contractor will not be afforded the privileges that come from the statute because of its association with a licensed contractor ...; because of its obtaining a license subsequent to the execution of the contract ...; or because of the equally inequitable conduct of the other contracting party.” Med Plus, 628 So.2d at 374–75 (citations omitted); see also Thomas Learning Center, 766...