United States ex rel. RCO Constr., LLC v. Fed. Ins. Co.
| Decision Date | 03 May 2022 |
| Docket Number | CIVIL ACTION NO. 20-00154 |
| Citation | 601 F.Supp.3d 1091 |
| Parties | UNITED STATES of America, FOR the USE OF RCO CONSTRUCTION, LLC, Plaintiff, v. FEDERAL INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Oklahoma |
Alan Wesley Bardell, Hayes Magrini & Gatewood, Oklahoma City, OK, for Plaintiff.
John Edward Harper, Jr., Timothy Lee Rogers, Barrow & Grimm PC, Tulsa, OK, for Defendant.
YOUNG, D.J.1
More and more parties are eager to cut the jury trial off at its knees through summary judgment. As Judge Patricia Wald aptly noted:
[f]ederal jurisprudence is largely the product of summary judgment .... It is 1-L stuff that a motion for summary judgment lies only when there is no genuine issue of material fact, and that Rule 56 is not designed to foreclose when material facts are at issue. But research and observations in my D.C. Circuit suggest that summary judgment has assumed a much larger role in civil case dispositions than its traditional image portrays or even than the text of Rule 56 would indicate, to the point where fundamental judgments about the value of trials and especially trials by jury may be at stake.
The Honorable Patricia Wald, Summary Judgment at Sixty, 76 Tex.L. Rev. 1897, 1897-98 (1998). Courts ought be cautious in invoking this procedural mechanism, because while at first glance a case may appear apt for the summary judgment ax, more often than not its outcome relies on minute factual issues that are best left to the jury. This is one such case.
The United States of America for the use of RCO Construction brought a claim against the Federal Insurance Company ("Federal") under the Miller Act, which allows subcontractors to sue for payment to which they are entitled on a construction project bond. Federal moved for summary judgment on the basis that the one-year statute of limitations had elapsed on RCO Construction's Miller Act claim. The determination of whether the statute of limitations elapsed hinges on when RCO Construction's last day of work took place, or, in other words, when the statute of limitations clock began to run.
Federal argued that the payroll records and documentary evidence provide sufficient proof that RCO Construction's last day was April 10, making its claim untimely by two days. RCO Construction countered that its employees were physically present and working on the project in question on April 12 and 13, making their action timely. RCO Construction also argued that payroll records and other documentary evidence are not definitive proof of its last day of work.
At a hearing held on December 9, 2021, this Court denied Federal's motion for summary judgment. This memorandum of decision explains the Court's reasoning. There is a genuine dispute of material fact as to whether RCO Construction's employees were physically present and working on the project on April 12 and 13. Furthermore, the payroll records and documentary evidence here cannot be considered definitive proof of the last day of work. More broadly, Miller Act cases cannot be decided on the basis of payroll records alone.
RCO Construction2 filed suit against Federal on April 13, 2020. See Compl., ECF No. 2. On February 3, 2021, Federal moved for summary judgment. See Def.’s Mot. Summ. J. & Br. Supp. ("Mot. Summ. J."), ECF No. 16. The parties fully briefed this motion. See Pl.’s Response & Objection Def.’s Mot. Summ. J. ("Opp'n Mot. Summ. J."), ECF No. 19; Def.’s Reply Supp. Mot. Summ. J. ("Reply"), ECF No. 21.3
This Court held a hearing on December 9, 2021 and denied the motion for summary judgment. See Minutes Proceedings, ECF No. 28. This memorandum explains the Court's reasoning.
RCO Construction is a Texas Limited Liability Company, all of whose members reside in Texas. The defendant Federal is a corporate surety that conducts business in Oklahoma and Texas. Compl. ¶ 1. Ross Construction Corp. ("Ross") is a player in this suit, in that it is the general contractor that hired RCO Construction to assist with construction on the relevant project. Mot. Summ. J. ¶ 1-2, at 2; Opp'n Mot. Summ. J. ¶ 1-2, at 2.
On May 26, 2016, Ross contracted with NAVFAC Southeast IPT Gulfcoast for a construction project known as Corpus Christi Repairs Hangar 55 and 56 and Fire Protection, Naval Air Station Corpus Christi, Texas ("the Project"). See Mot. Summ. J. 1; Opp'n Mot. Summ. J. 1. Pursuant to the Miller Act, Ross as the principal, and Federal, as the surety, executed a payment Bond, No. 8244-14-48, in connection with the Project. Id.
On or around April 19, 2017, Ross and RCO Construction entered into a subcontract for the performance of certain work on the Project (Subcontract Agreement Number 04177.10-32-1313-0004) ("the Subcontract"). Mot. Summ. J. ¶ 1-2, at 2; Opp'n Mot. Summ. J. ¶ 1-2, at 2. RCO Construction continued work on the Project from 2017 to 2019. Mot. Summ. J. ¶ 5, at 3; Opp'n Mot. Summ. J. ¶ 5, at 3.
The parties disagree on when exactly RCO Construction's work ceased in 2019: RCO Construction argues its last day of work was April 13, 2019, at the earliest, and Federal argues it was April 10, 2019, at the latest. Mot. Summ. J. ¶ 3, at 2-3; Compl. ¶ 11. The parties do, however, agree on several key facts pertinent to this inquiry.
Both parties agree that RCO Construction submitted the following payroll records: (1) one for the week ending on April 10, 2019, see Mot. Summ. J., Ex. 3, Weekly Certified Payroll Reporting Form, ECF No. 16-3, and (2) another for the week ending on April 17, 2019, titled "Certified Payroll Report for Non-Performing Week ," see id. Ex. 4, Certified Payroll Report for Non-Performing Week, ECF No. 16-4 (emphasis added); see also Mot. Summ. J. ¶ 3, at 2; Opp'n Mot. Summ. J. ¶ 3, at 2. RCO Construction also attached to its opposition a certified payroll -- Federal does not dispute its authenticity -- starting on April 25 and ending on May 1, 2019, which lists the same workers as the April 10, 2019 Payroll and is associated with the same project. See Opp'n Mot. Summ. J., Ex. 7, Certified Payroll Week Ending May 1, 2019, ECF No. 19-7.
Both parties agree that on April 12, 2019, Ryan Ahlgrim ("Ahlgrim"), a Ross employee, sent an email requesting that RCO Construction fill trenches and proceed with tank excavation work. See Reply 3; Opp'n Mot. Summ. J. ¶ 3, at 2. In this email, Ahlgrim lists several tasks that "RCO [Construction] needs to do by close of business Friday, April 19th." See Opp'n Mot. Summ. J., Ex. 3, April 12, 2019 Email from Ryan Ahlgrim ("Ahlgrim's April 12 Email"), ECF No. 19-3. The email lists four separate items: (1) backfilling the trench and providing a total of five plates; (2) backfilling the tank excavation ; (3) possibly using the rock on site ; and (4) cleaning up the punch list . Id.
On April 16 and 17, 2019, RCO Construction and Ross exchanged emails regarding additional plates, the number that Ross would need for the Project, and what a quote on those plates would look like. See Opp'n Mot. Summ. J., Ex. 6, Email dated April 16, 2019 from Ross, ECF No. 19-6. Someone from Ross asked about the "status of the trench filling" during this conversation. Id. at 4. To this, someone from RCO Construction replied, "we have everything ready to go, we are just waiting to hear back on payment status for Feb." Correction Reply Exs., Ex. 1-A, April 16, 2019 Email Chain, ECF No. 22-1. Federal also submits a proposal drafted by RCO Construction on April 17, 2019, that lists "[b]ackfill[ing] of all existing trench areas" and providing plates, as tasks to be completed . See id. Ex. 1-B, Proposal, ECF No. 22-1.
Federal also attached several other email exchanges to its briefing -- RCO Construction does not dispute the authenticity of these documents. On April 19, 2019, Ahlgrim sent an email which states "I think we've convinced NAVFAC to leave the trenches open for now ...." See id. Ex. 1-C, April 19, 2019 Email Chain, ECF No. 22-1. On April 20, Ahlgrim sent an email stating See id. Ex. 1-D, April 20, 2019 Email Chain, Ex. 22-1. RCO Construction replied the same day with an email stating that "[t]here is nothing to backfill with" and that any backfilling material would constitute an added cost that Ross would need to cover in order for RCO Construction to move forward. See id.
On April 25, 2019, Ross terminated RCO Constructions's right to perform the remainder of the Subcontract. Mot. Summ. J. ¶ 5, at 3; Opp'n Mot. Summ. J. ¶ 5, at 3. RCO Construction collected its tools between April 30 and May 1, 2019. Mot. Summ. J. ¶ 6, at 3.
On November 1, 2019, RCO Construction filed an action identical to the one at bar in the District Court for the Southern District of Texas, which it voluntarily dismissed on January 15, 2020, pursuant to Federal Rule of Civil Procedure 41(a). Mot. Summ. J. ¶ 7, at 3-4; Opp'n Mot. Summ. J. ¶ 7, at 4.
On April 13, 2020, RCO Construction filed the instant action alleging one count under the Miller Act, claiming that Ross and its surety, Federal, have refused to pay a series of invoices to RCO Construction amounting to $152,466.24. Compl. ¶¶ 12-16, 17-19. In its complaint RCO Construction alleges that it was hired to provide subcontract work, equipment, and material necessary for the sitework, utilities, and concrete installation for the Project, making it a "first-tier" subcontractor.4 Compl. ¶¶ 9-10.
The central dispute is whether RCO Construction's last day of work was April 10, 2019, as Federal claims, Mot. Summ. J. ¶ 3, at 2, or April 13, 2019, as RCO Construction argues, Compl. ¶ 11.
Federal states that "documentary evidence" establishes that RCO Construction did not return to the Project on April 12, and 13. Reply 2. First, Federal argues that the payroll records indicate that April 10 was the final working week for RCO Construction on the project. See Mot....
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