U.S. for The ex rel. Heavy Materials, LLC v. Tip Top Constr. Corp
| Decision Date | 20 May 2016 |
| Docket Number | Civil Action No. 2015-0008 |
| Parties | UNITED STATES OF AMERICA FOR THE USE OF HEAVY MATERIALS, LLC, Plaintiff, v. TIP TOP CONSTRUCTION CORP, Defendant. |
| Court | U.S. District Court — Virgin Islands |
Attorneys:
Michael J. Sanford, Esq.,
St. Croix, U.S.V.I.
For Plaintiff
Scot F. Mchain, Esq.,
St. Croix, U.S.V.I.
THIS MATTER comes before the Court on the following Motions to Dismiss filed by Defendant Tip Top Construction Corp ("Defendant"): (1) "Defendant Tip Top's Motion to Dismiss Amended Complaint" filed on May 19, 2015 (Dkt. No. 20), (the "Motion"); and (2) "Defendant Tip Top's Second Motion to Dismiss" filed on January 5, 2016 , (the "Second Motion").1 For the reasons set forth below, the Court will deny both Motions.
On February 19, 2015, Plaintiff brought suit under the Miller Act, 40 U.S.C. §§ 3131-3134, alleging that it is owed money from Defendant and its surety Travelers Casualty and Surety Company ("Travelers") for materials supplied for a federal construction project. (See Dkt. No. 1). Specifically, the Original Complaint alleges that Defendant entered into a written contract with the United States to construct the Joint Forces Readiness Headquarters Facility at Estate Bethlehem, Kingshill, St. Croix for the Virgin Islands National Guard; that Defendant and Travelers allegedly "duly executed and delivered to the United States of America a payment bond, bond number 105350690, for the protection of all persons supplying labor and material" in connection with the construction project; and that despite supplying construction materials pursuant to Defendant's contract, Defendant has failed to fully pay Plaintiff. (Id. at ¶¶ 5-7).
On April 8, 2015, Defendant filed a Motion to Dismiss claiming that the Original Complaint identified the wrong bond number and should therefore be dismissed. (See Dkt. No. 10 at 2 ()). In lieu of a response, Plaintiff filed its First Amended Complaint on April 29, 2015 (Dkt. No. 14) ("Amended Complaint"), pursuant to Rule 15(a)(1)(B) of the Federal Rules of Civil Procedure.2 The Amended Complaint alleges for the first time that the construction materials were provided pursuant to bond number 105485008. (Id. at ¶ 6). Contemporaneously with the Amended Complaint, Plaintiff filed a "Motion Requesting Plaintiff's Amended Complaint Relate Back to Original Complaint Pursuant [to] Fed. R. Civ. P. 15(c)" (Dkt. No. 15). In its Motion to Relate Back, Plaintiff asserts that therelation-back doctrine of Rule 15(c) of the Federal Rules of Civil Procedure "applies to the Miller Act." (Id. at 5). Plaintiff further asserts that correcting the bond number was a "technical change" and that both the Original Complaint and the Amended Complaint "relate[] to the exact same parties, for the same type of materials, involving the same location, and adds no new claims or allegations." (Id.).3 Accordingly, Plaintiff argues that its Amended Complaint—although filed after the Miller Act's one-year time limit—should relate back to its Original Complaint pursuant to Rule 15(c). (Id.).
On May 13, 2015, Defendant filed its "Opposition to Motion to Relate Amended Complaint Back" (Dkt. No. 17),4 and on May 19, 2015, filed its "Motion to Dismiss Amended Complaint" (Dkt. No. 20). In the Motion to Dismiss, Defendant argues that the Amended Complaint should be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and the Miller Act. (Dkt. No. 20 at 1). Defendant argues that the Miller Act's one-year time limit is not just a statute of limitations but is a "statute of repose," and the relation-back doctrine under Rule 15(c) is inapplicable to statutes of repose. (Id. at 2-3).5 Accordingly, Defendant asserts that the Amended Complaint should be dismissed as untimely. (Id. at 3-4).6
On October 1, 2015, Plaintiff and Travelers filed a "Stipulation for Dismissal with Prejudice" that dismissed Travelers from the case, but noted that "Plaintiff's claims against [Defendant] remain outstanding." (Dkt. No. 33 at 1). The Court subsequently accepted this Stipulation. (Dkt. No. 34).
After Travelers' dismissal, Defendant filed its Second Motion arguing, as an alternative to its first Motion, that the Miller Act allows Plaintiff to "bring a civil action on the payment bond." (Dkt. No. 36 at 2 (quoting 40 U.S.C. § 3133(b)(1)) (quotations omitted)). Because Plaintiff dismissed its claims against Travelers (the surety), Defendant asserts that the federal claim on the payment bond has been eliminated, and the Court should decline to exercise jurisdiction over the remaining local claims. (Id.).
In its Opposition, Plaintiff argues that the Miller Act allows it to "prosecute the action to final judgment." (Dkt. No. 37 at 1). Although it settled its claims with Travelers, Plaintiff contends that "the action against [Defendant] had not been prosecuted to final judgment," and, therefore, the federal claim has not been extinguished. (Id. at 1-2 (emphasis in original)). In any event, Plaintiff maintains that the Court should not decline to exercise jurisdiction over Plaintiff's debt action against Defendant. Id. at 3-4.
Following Bell Atlantic v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Third Circuit described the analysis to be undertaken when presented with a motion to dismiss for failure to state a claim under Rule 12(b)(6):
Under the pleading regime established by Twombly and Iqbal, a court reviewing the sufficiency of a complaint must take three steps. First, it must "tak[e] note of the elements [the] plaintiff must plead to state a claim." Iqbal, 556 U.S. at 675, 129 S.Ct. 1937. Second, it should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679, 129 S.Ct.1937. See also Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011) . Finally, "[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.
Connelly v. Lane Const. Corp., 809 F.3d 780, 787 (3d Cir. 2016) (omitting footnote). Accepting all well-pleaded factual allegations as true, courts must "construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Advanced Rehab., LLC v. UnitedHealthgroup, Inc., 498 F. App'x 173, 176 (3d Cir. 2012) (quoting Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)) (quotations omitted). "A district court may grant the motion to dismiss only if . . . it determines that plaintiff is not entitled to relief under any reasonable reading of the complaint." Acosta v. Hovensa, LLC, 53 V.I. 762, 771 (D.V.I. 2010). (citing Capogrosso v. Supreme Court of N.J., 588 F.3d 180, 184 (3d Cir. 2009) (internal quotations and brackets omitted)).
Determining whether the well-pleaded facts plausibly give rise to a claim for relief "is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Connelly, 809 F.3d at 786-87 (quoting Iqbal, 556 U.S. at 679) (quotations omitted). While the Court must determine whether the facts as pleaded state a plausible claim for relief, "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts alleged is improbable and that a recovery is very remote and unlikely." Fowler, 578 F.3d at 213 (quoting Twombly, 550 U.S. at 556) (quotations omitted).
The Miller Act requires "a general contractor performing a contract valued at over $25,000 on any [federal] public construction project to obtain a performance bond for the protection of persons supplying labor and material in the prosecution of the work on the project." U.S. for Use & Ben. of Water Works Supply Corp. v. George Hyman Const. Co., 131 F.3d 28, 31 (1st Cir. 1997)(citing 40 U.S.C. § 3132). Subcontractors who have "furnished labor or material" to the public project but have not been paid in full may bring suit under the Miller Act to recover the amount owed to them. 40 U.S.C. § 3133(b). "The purpose of the Miller Act is 'to protect persons supplying labor and material for the construction of federal public buildings in lieu of the protection they might receive under state statutes with respect to the construction of nonfederal buildings,'" as liens created under state law cannot be applied to federal properties. Arena v. Graybar Elec. Co., 669 F.3d 214, 220 (5th Cir. 2012) (quoting U.S. for Use & Ben. of Water Works Supply Corp., 131 F.3d at 31). However, "[a]n action brought under [the Miller Act] must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person bringing the action." 40 U.S.C. § 3133.
Rule 15 addresses amended and supplemental pleadings. Under Rule 15(c), an amended pleading "relates back" to the date of the original pleading when, inter alia, "the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading." Fed. R. Civ. P. 15(c). "Rule 15(c) endeavors to preserve the important policies served by the statute of limitations—most notably, protection against the prejudice of having to defend against a stale claim, as well as society's general interest in security and stability—by requiring 'that the already commenced action sufficiently embraces the amended claims.'"...
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