United States v. E. Coast Welding & Constr. Co.

Decision Date10 March 2022
Docket NumberCivil Action ELH-21-1244
PartiesUNITED STATES OF AMERICA, for the use of DELVAL EQUIPMENT CORPORATION, INC., and DELVAL EQUIPMENT CORPORATION, INC., Plaintiff, v. EAST COAST WELDING AND CONSTRUCTION CO., INC., et al., Defendants.
CourtU.S. District Court — District of Maryland
MEMORANDUM OPINION

Ellen L. Hollander, United States District Judge

This case arises under the Miller Act, 40 U.S.C. § 3131 et seq. Plaintiff is the United States of America for the use of Delval Equipment Corporation, Inc., and Delval Equipment Corporation, Inc. (Delval).[1] ECF 30 (the First Amended Complaint) (hereinafter, “Amended Complaint”). The case concerns several government construction contracts for the U.S. General Services Administration (“GSA”) with unrelated general contractors, for which Delval provided materials.[2]

Delval has sued NS & Associates, LLC (“NS&A”), a prime contractor for the GSA; QCM, Inc. (“QCM”) which is another prime contractor for the GSA; East Coast Welding and Construction Co., Inc. (ECW), a subcontractor; Christopher Brown, an ECW officer; The Fields Group, LLC (the “Fields Group”), another contractor; and the Pennsylvania National Mutual Casualty Insurance Company (“Pennsylvania National”), which provided a payment bond implicated in this dispute. Id.

The suit contains fifteen claims: violation of the Miller Act, lodged against NS&A (Count I); breach of contract, against ECW (Count II); intentional misrepresentation, against ECW (Count III); negligent misrepresentation, against ECW (Count IV); negligence, against the Fields Group (Count V); a “Bond Claim, ” against Pennsylvania National (Count VI); constructive fraud, against Christopher Brown (Count VII); unjust enrichment, against ECW (Count VIII); quantum meruit, against ECW (Count IX); unjust enrichment, against NS&A (Count X); quantum meruit, against NS&A (Count XI); unjust enrichment, against QCM (Count XII); quantum meruit, against QCM (Count XIII); unjust enrichment, against the Fields Group (Count XIV); and quantum meruit, against the Fields Group (Count XV). See ECF 30, ¶¶ 53-176. Delval invokes federal question jurisdiction for its Miller Act claims (Count I and Count VI), and invokes supplemental jurisdiction for the remaining State law claims. See id. at ¶¶ 8-9.

The original Complaint (ECF 1) was accompanied by eight exhibits. ECF 1-1 to ECF 1-8. The Amended Complaint (ECF 30) includes three additional exhibits. ECF 30-1 to ECF 30-3.[3]

ECW, Brown, and Pennsylvania National have jointly answered the Amended Complaint. ECF 39. The Fields Group answered the original Complaint, although it has not answered the Amended Complaint. ECF 25.[4] In February 2022, the Fields Group also moved for summary judgment. ECF 51.[5]

NS&A and QCM have both moved to dismiss the suit, pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) or, in the alternative, for summary judgment. NS&A's motion (ECF 35, the “NS&A Motion”) is accompanied by seven exhibits. ECF 35-1 to ECF 35-7. QCM's motion (ECF 36, the “QCM Motion”) is accompanied by five exhibits. ECF 36-1 to ECF 36-5. Delval opposes both motions. ECF 37 (opposition to the NS&A Motion); ECF 38 (opposition to the QCM Motion). And, NS&A and QCM have jointly replied in a single filing. ECF 46.

No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I shall construe the motions as motions to dismiss and deny them.

I. Factual Background[6]

This case involves the GSA; NS&A and QCM, both of which are prime contractors for the GSA; ECW, a subcontractor for both prime contractors; the Fields Group, another contractor that contracted with ECW; Delval, a materials supplier for ECW; and a surety, Pennsylvania National.

The Amended Complaint describes ECW as a “contractor for construction services serving federal, state, and local governmental agencies in Maryland and the District of Columbia.” ECF 30, ¶ 12. According to the Amended Complaint, “ECW holds itself out as a welding and construction company that performs work throughout the North American region, including in Maryland and the District of Columbia.” Id. ¶ 13. And, the Amended Complaint alleges that Brown is an “officer, director, or agent in control of ECW.” Id. ¶ 3. Materials attached to the NS&A Motion and the ECW Motion identify Brown as the president of ECW. See ECF 35-4 at 2; ECF 36-3 at 2.

Of relevance here, ECW was a subcontractor for all the contractors. Delval was, in turn, a sub-subcontractor. According to the parties' submissions, however, there is substantial confusion regarding the particular projects for which Delval supplied materials to ECW.

In essence, Delval alleges that it supplied materials to ECW with the understanding that the materials were for a project for NS&A, and covered by a contract and a bond. However, Delval was not paid for the materials. And, it was subsequently informed that the order was for other, distinct contracts and projects, and not covered by the same bond. Because Delval “cannot be sure what contract it provided materials for, ” ECF 30, ¶ 52, Delval has sued several parties up and down the contractual chain, lodging multiple claims. As NS&A and QCM put it, Delval has filed suit “against the entire kitchen sink, ” i.e., the “upstream contractors” on three projects. See ECF 35 (NS&A) at 2; ECF 36 (QCM) at 2 (emphasis in originals).

At least two GSA contracts are implicated in this litigation. The first is Contract No. 47PM06-19-C-0009, between the GSA and NS&A. ECF 30, ¶¶ 11, 14.[7] This contract is described in the Amended Complaint as a contract to repair an economizer (id. ¶ 14), and is referred to in a separate subcontractor agreement between NS&A and ECW as a contract for “Central Heating and Refrigeration Plant Boiler #4 Tube Repairs.” ECF 30-1 (original NS&A-ECW contract) at 1.[8]Correspondence from Brown, on behalf of ECW, to counsel for Delval describes this contract as involving “Economizer #2” at the Central Heating and Refrigeration Plant. ECF 35-5 (letter of February 10, 2021, from Brown to Gene Foehl) at 2. The Amended Complaint alleges that NS&A was required to furnish a payment bond for this project under the Miller Act, because it exceeded $100, 000. ECF 30, ¶ 57.

In order to implement its contract with the GSA, NS&A entered into a subcontractor agreement with ECW on September 30, 2019, for a total sum of $566, 984. Id. ¶ 15; see ECF 30-1 (original NS&A-ECW contract), at 1. The subcontractor agreement was amended on February 11, 2020, to “include Economizer #2, ” for an amended total of $993, 840. ECF 1-1 (amended NS&A Contract) at 1. Both versions of the subcontractor agreement obligated ECW to “furnish and install required Supervision, Cleared Labor, materials, equipment, structural components . . . and all necessary items as needed to successfully complete the project.” Id.; ECF 30-1 at 1.

On October 9, 2019, Pennsylvania National issued a “Subcontract Payment Bond.” ECF 1-2 (the “Bond” or the “Pennsylvania National Bond.”).[9] It is identified as Bond No. SB 0611505.” ECF 1-2 at 5. The Amended Complaint describes the Bond as a “payment bond for contract number 47PM06-19-C-0009.” ECF 30, ¶ 18. It also describes the Bond as “the payment bond for purchase order 1745.” Id. ¶ 41.

The Bond specifies that Pennsylvania National is the “Surety”; ECW is the “Subcontractor”; and NS&A is the “Construction Manager.” ECF 1-2 at 5. The amount of the Bond, and the amount of the “Subcontract, ” are listed as $566, 984. Id. And, the “Project Description” states: “Contract Number 47PM06-19-C-0009, Central Heating and Refrigeration Plant Boiler #4 Tube Repairs Washington, DC.” Id.

The second contract is between the GSA and QCM, identified as Contract No. 47PM06-19-C-0005. ECF 30, ¶ 147; ECF 30-3 (the QCM contract). According to the Amended Complaint, the contract provided that QCM was to perform structural concrete repairs to the steam tunnel at the Central Heating and Refrigeration Plant, which was the same facility covered by the NS&A contract. ECF 30, ¶ 147; see also ECF 30-3 at 4-16 (describing scope of work); ECF 35-7 (letter from counsel for NS&A to counsel for Delval, describing contract) at 2; ECF 36-5 (letter from counsel for QCM to counsel for Delval, describing contract) at 2. The contract price was $689, 883. ECF 30-3 at 2. The Amended Complaint alleges that QCM was required to furnish a payment bond for this project under the Miller Act, because the cost of the contract exceeded $100, 000. ECF 30, ¶ 148.

QCM entered into a contract with ECW in relation to QCM's contract with the GSA. Id. ¶¶ 29, 160, 164. Specifically, QCM and ECW entered into a “Short Form Subcontractor Agreement” on December 8, 2019, in the amount of $167, 000. ECF 36-2 (QCM-ECW contract) at 1. Under this agreement, ECW agreed to [p]rovide all labor, material, and equipment to Re-tube the #5 Economizer” as part of the “Steam Plant Equipment Repairs” project. Id. Later, on February 28, 2020, QCM and ECW agreed to a “Change Order” regarding their contract, under which ECW would “Re-tube the #1 Economizer, Supply and store tubes for 6 months.” ECF 1-7 (QCM-ECW change order).[10] The Change Order increased the value of the contract by $96, 096, for a total of $263, 096. Id.

In addition, ECW entered into a separate contract with the Fields Group, under which ECW agreed “to supply tubing for an economizer repair.” ECF 30, ¶ 28. This contract took the form of a “Subcontractor Agreement” between ECW and the Fields Group, dated March 3, 2020, for the amount of $123, 019. ECF 1-8 (Fields contract). The Fields Group was the contractor, and ECW was the subcontractor. Id.

In the context of these various contracts and subcontracts, ECW contracted with Delval for all of them,...

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