United States ex rel. TBI Invs., Inc. v. BrooAlexa, LLC
Decision Date | 10 August 2015 |
Docket Number | Civil Action No. 2:14–cv–29074. |
Parties | UNITED STATES of America, for the use of TBI INVESTMENTS, INC., Plaintiff, v. BROOALEXA, LLC et al., Defendants. |
Court | U.S. District Court — Southern District of West Virginia |
Charles M. Johnstone, II, Johnstone & Gabhart, Charleston, WV, for Plaintiff.
David A. Barnette, James Eric Whytsell, Vivian H. Basdekis, Jackson Kelly, Charleston, WV, for Defendants.
Pending before the Court is Defendants' Motion to Dismiss, or in the Alternative, to Stay Action and Compel Arbitration (the "Motion"). (ECF No. 7.) For the reasons discussed herein, the Court GRANTS IN PART and DENIES IN PART the Motion.
This case arises out of a contractual dispute between the prime contractor and subcontractor on a federal construction project. Defendant BrooAlexa, LLC ("BrooAlexa") was the prime contractor "for the construction of the project identified as FCI McDowell West Virginia Staff Training Building" (the "Project"), , )"for the United States Federal Bureau of Prisons" (the "FBP") "under US–8A–DOJ–FBP–2013–11SC," (ECF No. 1 ¶ 7). Defendant American Contractors Indemnity Company ("American Contractors") "is ... the Surety for [Defendant] BrooAlexa, and has furnished to the United States a payment bond as required by the" contract between Defendant BrooAlexa and the FBP relating to the Project "and pursuant to 40 U.S.C. §§ 3131 to 3134." (Id. ¶ 8; see also id., Ex. A (constituting a payment bond executed on May 23, 2013, with the principal listed as Defendant BrooAlexa and the surety listed as Defendant American Contractors).)
Defendant BrooAlexa "[s]ubcontracted with [Plaintiff] to perform various portions of the site work for the [Project]." (Id. ¶ 9.) Plaintiff and Defendant BrooAlexa executed two contracts relating to Plaintiff's subcontracting work on the Project (the "Contracts"). The first agreement provides that Defendant BrooAlexa agrees to pay Plaintiff $300,000.00 for its work on the Project, , while the second states that )Defendant BrooAlexa agrees to pay Plaintiff $218,350.00 for this work, . ) The two Contracts are otherwise materially identical, for purposes of the present Motion. Both Contracts were signed by Lindsey Ray—the President of Plaintiff—on May 31, 2013, and countersigned by Gene Brooks—the President of Defendant BrooAlexa—on June 5, 2013.
On the sixth and final page of the Contracts, the agreements both include the following identical "Alternative Dispute Resolution Process" clause (the "ADR Clause") directly above the signature lines:
.
The Complaint alleges that Plaintiff's "original quote for the Subcontract work was $954,500.00," but Defendant "BrooAlexa informed [Plaintiff] that its quote was too high and had to be lowered substantially." (ECF No. 1 ¶ 10.) The Complaint avers that, "[i]n order to arrive at the final ... amount of $518,350.00, by express agreement by and between [Defendant] BrooAlexa and [Plaintiff], the purchase of materials as well as any costs for potentially encountering, excavating, removing and/or replacing rock or other differing site conditions were removed from the scope of the work." (Id. ). The Complaint further alleges that the parties "expressly agreed and made part of the [Contracts] that [Plaintiff] would be compensated for all costs incurred in dealing with rock and other differing site conditions through change orders to the [Contracts]." (Id.; cf. id. ¶ 11 ().)
The Complaint avers that, "[a]lmost immediately after the site-work began, [Plaintiff] encountered a substantial amount of rock and other differing site conditions." (Id. ¶ 12.) According to the Complaint, "[Plaintiff] immediately notified [Defendant] BrooAlexa and requested that a change order be issued," "[Defendant] BrooAlexa agreed that a change order would and should be executed," but "no such change order was ever finalized." (Id. ) The Complaint alleges that, "[Defendant] BrooAlexa requested that [Plaintiff] submit its actual and estimated costs that it had and would incur in dealing with the rock and other differing site conditions," and that "[Plaintiff] promptly complied and requested an additional amount of $432,832.05 for work, equipment and labor associated with the rock and other differing site conditions." (Id. ¶ 13.) The Complaint also asserts that, "[d]uring the remainder of the project, [Plaintiff] submitted additional ... claims for extra/additional work to [Defendant] BrooAlexa." (Id. ¶ 16.) The Complaint alleges that, despite these additional claims, "[Defendant] BrooAlexa failed and refused to pay" Plaintiff for work related to differing site conditions, the "extra/additional work," or an amount from the Contracts that "[Defendant] BrooAlexa alleges that it paid for materials for [Plaintiff's] work." (Id. ¶¶ 14–17.) The Complaint alleges that "[Plaintiff] filed a claim under the applicable payment bond with [Defendant] American Contractors but its claim [was] rejected." (Id. ¶ 20.)
On November 26, 2014, Plaintiff filed the Complaint "in the name of the United States of America pursuant to 40 U.S.C. § 3133." (Id. ¶ 2.) The Complaint includes the following four claims: (1) Count I is a breach of contract claim against Defendant BrooAlexa, (id. ¶¶ 21–24); (2) Count II is a breach of payment bond claim under the Miller Act against Defendant American Contractors, (id. ¶¶ 25–28); (3) Count III is a quantum meruit claim against both Defendants, (id. ¶¶ 29–34); and (4) Count IV is a claim under the federal Prompt Payment Act against both Defendants, (id. ¶¶ 35–41). The Complaint requests a "judgment against [Defendants] jointly and severally ... in the amount of at least $683,337.94 representing the past-due principal amount plus extended general conditions, extended home office overhead, lost profits, lost business opportunities and other compensable damages as well as applicable interest, costs and attorney's fees." (Id. at 8.) The Complaint does not reference the ADR Clause and Plaintiff did not attach the Contracts to the Complaint. (See ECF No. 1.)
On January 15, 2015, Defendants filed the Motion, in which they argue that some of Plaintiff's claims are arbitrable under the ADR Clause and request that the Court compel arbitration as to those claims and dismiss or, alternatively, stay this case pending the arbitration proceedings. (ECF No. 7.) Defendants attached the ...
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