U.S. ex rel. Am. Gen. Constr. v. Yack Constr., Inc., Case No. 2:17-cv-01994-MMD-CWH
| Decision Date | 25 September 2019 |
| Docket Number | Case No. 2:17-cv-01994-MMD-CWH |
| Parties | UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF AMERICAN GENERAL CONSTRUCTION, INC., and AMERICAN GENERAL CONSTRUCTION, INC. d/b/a AGC, INC., Plaintiffs, v. YACK CONSTRUCTION, INC., MERCHANTS BONDING COMPANY (MUTUAL), and PAE APPLIED TECHNOLOGIES, LLC, Defendants. |
| Court | U.S. District Court — District of Nevada |
This is a contractual dispute between construction companies. Defendant Yack Construction, Inc. ("Yack") was hired to construct a hangar at Creech Air Force Base ("the Project") and subcontracted with Plaintiff American General Construction, Inc. ("AGC") to carry out a portion of the Project. AGC completed part of its work, but then its relationship with Yack deteriorated. Yack terminated AGC and hired one of AGC's former subcontractors to complete the work. Yack has refused to pay AGC, contending that AGC violated the contractual agreement that governed their relationship.
The following motions are pending before the Court: (1) Defendants Yack and Merchants Bonding Company (Mutual)'s ("Merchants") motion for summary judgment (ECF No. 47) and (2) Plaintiffs United States of America for the Use and Benefit of American General Construction, Inc. and AGC's motion for partial summary judgment (ECF No. 48). The Court has reviewed the parties' responses (ECF Nos. 51, 52) and replies (ECF Nos. 53, 54). The Court also held a hearing on the pending motions on September 24, 2019 ("the Hearing"). (ECF No. 59.) For the following reasons, the Court denies the parties' motions.
The following facts are undisputed unless otherwise indicated.
The United States Air Force entered into a Range Support Services Agreement with PAE Applied Technologies, LLC ("PAE") in 2002. (ECF No. 52-4 at 2.) Under that agreement, PAE "provides a broad array of services to the Government at multiple locations on the Nevada Test and Training Range . . . [including] Creech Air Force Base." (Id.) One of the services PAE provided was overseeing the construction of the Project. (Id. at 3.)
PAE solicited proposals for the Project on October 6, 2016. (Id.) The request for proposals "expressly required bidders to obtain a Performance and Payment bond, as required under the Miller Act." (Id.) PAE entered into an agreement with Yack on January 30, 2017 that made Yack primarily responsible for the Project and required Yack to obtain the bond required under the Miller Act.1 (Id.) Yack obtained a bond in the amount of $3,168,122 from Merchants on April 5, 2017. (Id.)
AGC submitted a proposal ("Proposal") on December 22, 2016 to Yack to carry out certain aspects of the Project. (See ECF No. 48-1 at 1.) The Proposal contains pricing for a regular schedule, accelerated schedule, payment terms, and exclusions. (See id. at 2-5.) Yack's agent signed the Proposal on January 6, 2017, agreeing to the regular schedule pricing and the following payment term: (Id. at 4.) The Proposal also bears the signature of AGC's agent. (See id. at 5.) The Proposal references additional forthcoming agreements between the parties, indicating that it "will need to be added . . . to any Ownership Contract Agreements." (Id. at 1.)
AGC contacted Yack on January 25, 2017 to ask whether a draft subcontract agreement was ready for review. (ECF No. 48-4 at 2.) Yack instructed AGC two days later to proceed with the work under the Proposal even though the subcontract agreement was
///not ready for review because Yack was "behind on [its] contracts." (Id. at 4.) AGC commenced work on the Project sometime after that.2 (ECF No. 52 at 4-5; see also ECF No. 52-5 at 6-7 ().)
Yack provided a draft subcontract agreement ("Subcontract Agreement") to AGC on February 13, 2017. (ECF No. 52-11.) The Subcontract Agreement stated that upon receipt of a copy for signature, if AGC "commences work on the site prior to signing," such commencement would be "deemed to be acceptance" of the Subcontract Agreement. (Id. at 4 (Section 2.1).) AGC returned the Subcontract Agreement to Yack with numerous changes. (See ECF No. 52-12 (draft with notations); ECF No. 52-13 (); ECF No. 52-10 at 20-21 (describing redline edits).) Yack did not agree to all changes, and AGC refused to sign. (ECF No. 52-13 (); ECF No. 52-10 at 20-21 ().) In fact, AGC never signed the Subcontract agreement. (ECF No. 52-10 at 20-21; see also ECF No. 52-14 at 3 ().)
AGC entered into a subcontract agreement with Central Concrete Company of Ohio ("CCCO") on February 14, 2017 for CCCO to perform certain work on the Project. (See ECF No. 52-18.) AGC contends that certain failures on the part of Yack delayed this work:
[T]he presence of a hole near the pad where AGC's Scope of Work was to be performed, Yack's failure to ensure a complete pad was poured prior to AGC's arrival, Yack's failure to clear the site of dirt piles or to pour the concrete so that AGC and CCCO could proceed in a prompt manner, Yack's refusal to approve necessary change orders, and Yack's failure to create a master schedule to the Project.
///
///(ECF No. 52 at 7-8 (citing ECF No. 52-19; ECF No. 52-10 at 5, 19; ECF No. 52-20 at 3-6).)
Yack's representatives complained about CCCO's efforts in March 2017 and began to encourage AGC to terminate CCCO. (ECF No. 52 at 8; see also, e.g., ECF No. 52-19 at 4 ( ).) AGC ultimately provided CCCO with a notice of termination on April 4, 2017. (ECF No. 52-25 at 2.) CCCO refused to return to the Project site on April 17, 2017, and Yack notified AGC that AGC would be terminated for failure to provide sufficient manpower at the Project site unless AGC provided sufficient manpower within 48 hours. (See ECF No. 52-28 at 4.) Yack terminated AGC on April 20, 2017. (ECF No. 52-33 at 2-3.)
AGC asserts the following claims against Yack in the First Amended Complaint ("FAC"): (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) quantum meruit; (4) unjust enrichment; (5) civil conspiracy; and (6) recovery from the Yack Bond. (ECF No. 14 at 13-19.) In the prayer for relief, AGC requests payment for the amount of the labor, materials, and services furnished to the Project as well as money damages, fees, and costs. (Id. at 20.)
"The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court." Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits "show there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). An issue is "genuine" if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is "material" if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Wherereasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See id. at 250-51. "The amount of evidence necessary to raise a genuine issue of material fact is enough 'to require a jury or judge to resolve the parties' differing versions of the truth at trial.'" Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).
The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256. The nonmoving party "may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists," Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and "must do more than simply show that there is some metaphysical doubt as to the material facts." Orr v. Bank of Am., 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." Anderson, 477 U.S. at 252.
Further, "when parties submit cross-motions for summary judgment, '[e]ach motion must be considered on its own merits.'" Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (citations omitted) (quoting William W. Schwarzer, et al., The Analysis and Decision of Summary Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992)). "In fulfilling its duty to review each cross-motion separately, the court must review the evidence submitted in support of each cross-motion." Id.
///
///
AGC moves for partial summary judgment on its...
To continue reading
Request your trial