United States v. Travelers Cas. & Sur. Co. of Am., Fed. Ins. Co., Fid. & Deposit Co. of Md., Zurich Am. Ins. Co., Liberty Mut. Ins. Co., the Cont'l Ins. Co., & Bell Constructors, LLC
| Decision Date | 24 September 2015 |
| Docket Number | Civil Action No. 1:13CV240 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | UNITED STATES OF AMERICA f/u/b/o KOGOK CORPORATION, Plaintiff, v. TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, FEDERAL INSURANCE COMPANY, FIDELITY & DEPOSIT COMPANY OF MARYLAND, ZURICH AMERICAN INSURANCE COMPANY, LIBERTY MUTUAL INSURANCE COMPANY, THE CONTINENTAL INSURANCE COMPANY, and BELL CONSTRUCTORS, LLC, Defendants. |
(STAMP)
The plaintiff ("Kogok") filed this action under the Miller Act, 40 U.S.C. § 3133, to recover payment for labor and materials it rendered to the FBI Biometric Technology Center, New Office Building and Central Utilities Plant Expansion ("the project") located in Clarksburg, West Virginia. Turner Construction Company ("Turner") and the Government entered into a contract, in which Turner agreed to construct the project. Turner entered into a subcontract agreement with Bell Constructors, LLC ("Bell") in which Bell agreed to perform the mechanical work on the project. Bellthen entered into a subcontract agreement with Kogok, in which Kogok agreed to provide sheet metal, ductwork, and related HVAC services to the project for $3.22 million. The defendants Travelers Casualty and Surety Company of America, Federal Insurance Company, Fidelity & Deposit Company of Maryland, Zurich American Insurance Company, Liberty Mutual Insurance Company, and the Continental Insurance Company ("the sureties" or "surety defendants") issued a payment bond on behalf of Turner, the general contractor, for the project.
The surety defendants previously filed a motion for partial summary judgment and to stay all proceedings. More specifically, the surety defendants sought summary judgment against Kogok with respect to: (1) all claims arising on or before October 31, 2013; (2) Kogok's claims for damages for delays; and (3) Kogok's claim for damages resulting from labor inefficiency. This Court granted the surety defendants' motion for partial summary judgment but denied their motion to stay all proceedings. ECF No. 61.
Later, Kogok filed a motion to amend the complaint and a motion to amend the scheduling order. This Court granted Kogok's motion to amend the complaint, directed Kogok to file a reformulated complaint,1 and deferred ruling on Kogok's motion toamend the scheduling order. ECF No. 77. Regarding the reformulated complaint, Kogok added Bell as a defendant and asserted several claims against Bell.2 Moreover, under Counts I through VI, Kogok revised its allegations and relief sought against the surety defendants. After Kogok filed its reformulated complaint, the surety defendants filed a motion to dismiss the reformulated complaint, and Bell filed a motion for summary judgment. ECF Nos. 88 and 86, respectively.
For the reasons set forth below, the surety defendants' motion to dismiss and Bell's motion for summary judgment are both granted. Furthermore, Kogok's motion to amend/correct the scheduling order is denied as moot.
Turner and the Government entered into a construction contract. Turner executed a labor and material payment bond with the surety defendants as joint and several sureties, which Turnerdelivered to the Government. After entering into the contract with the Government, Turner subcontracted the mechanical work on the project to Bell. Bell then entered into a subcontract agreement with Kogok, in which Kogok agreed to provide sheet metal, ductwork, and related HVAC services for the project. Kogok was to provide such material and services for $3.22 million. ECF No. 81 Ex. B.
At issue now are certain filings by Kogok and three provisions of the subcontract agreement between Bell and Kogok. In particular, the three provisions of the subcontract agreement are the "Release and Waiver" forms, the "Dispute" provision, and the "No Damages for Delay" clause. Regarding the Release and Waiver forms, Bell required Kogok to submit payment applications to Bell every month. ECF No. 87 Ex. 3. Pursuant to the subcontract agreement, each payment application had to be submitted with a Release and Waiver form. The Release and Waiver forms each state the following:
In consideration of the payment herewith made, the Undersigned [Kogok] does fully and finally release and waive any and all claims, causes of action, and/or lien rights against the Contractor [Bell] . . . for all costs, expenses, or losses of any nature or description which have arisen or are in any manner related to any aspect of the Work items from the date the Work items originally commenced to the date payment is made hereunder. This Release and Waiver applies to all claims, disputes, and other matters through the date this payment is made, including all claims for direct and indirect costs, productivity losses, delays, accelerations, ripple effects, field and home office overhead, equipment costs, and all other consequential and incidental costs, losses, and/or damages.
ECF No. 87 Ex. 4. The record shows that Kogok consecutively submitted 26 Release and Waiver forms, which were each executed and contained the language quoted above.
The subcontract agreement also contained a Disputes provision, which relates to any change orders placed pursuant to the Change Order provision. The Change Order provision states in relevant part that if Kogok and Bell are unable to agree on adjustments to the contract by change orders, ECF No. 87 Ex. 3. As referenced in the Change Order provision, the Disputes provision states that "[Kogok] shall give Bell written notice of all claims involving Bell for time extensions and additional costs within seven (7) days of the event giving rise to the claim; otherwise, such claim(s) shall be deemed forever waived." Id. (emphasis added). Any amounts that Kogok seeks to recover for any claims "is limited to the amounts that Bell may recover from the [Government] on Kogok's behalf." Id. Moreover, the "Government's] decision regarding [Kogok's] claim shall be final and conclusive as between Bell and [Kogok], and Bell shall have no liability to [Kogok] for such claims." Id. (emphasis added).
The final provision of the subcontract agreement at issue is the "No Damages for Delay" clause. That clause states in relevant part:
NO DAMAGES FOR DELAY: The Subcontractor [Kogok] expressly agrees not to make, and hereby waives, any and all claims for damages on account of any delay, obstruction, or hindrance for any cause whatsoever, including but not limited to the aforesaid cause, and agrees that its sole right and remedy in the case of any delay, obstruction or hindrance shall be an extension of time fixed for completion of the Work [unless and to the extent that Bell recovers delay damages from the Owner which are directly allocable to the Subcontractor [Kogok]].
Id. Bell and Kogok agreed to the subcontract agreement with the above terms and conditions.
In addition to the contract provisions quoted above, Kogok filed several "Certified Claim" forms. The Certified Claim forms refer to the proposed change order requests ("PCO") that Kogok submitted, which it claims relate to work done outside of the scope of the contract. Each of those claims contains the following certification by Kogok:
I hereby certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the minimum contract adjustments for which [Kogok] believes the Government is liable; and that I am duly authorized to certify the claim on behalf of [Kogok].
ECF No. 87 Ex. 8 (emphasis added). Kogok states that it is still working on the project. ECF No. 81 ¶ 16 ().
Kogok now claims that Bell and the surety defendants owe Kogok money for its work on the project. Kogok believes that Bell owes it $68,739.45 for work completed under the subcontract agreement pursuant to Pay Applications 43 through 46. ECF No. 81 Ex. 3. Those Pay Applications were submitted from November 2014 to April 2015. Id. In addition to the Pay Applications, Kogok submitted several PCOs for labor that it claims fell outside the contractual scope of work. Those PCOs show an additional $2,075,976.45 that Kogok claims Bell has withheld. ECF No. 81 ¶ 18. As to the surety defendants, Kogok seeks not less than $174,012.59 from each surety defendant. The amount sought from the surety defendants is based on Pay Applications 43 through 46, certain PCOs,3 and alleged delays and impacts to Kogok that occurred after October 31, 2013. Previously, Kogok submitted a Notice of Claim to Turner, which listed claims for past payments up to October 31, 2013. ECF No. 89 Ex. 6. However, that Notice of Claim did not state claims for the Pay Applications or the PCOs that are currently at issue.
In assessing a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must accept all well-pled facts contained in the complaint as true. Nemet Chevrolet, Ltd v. Consumeraffairs.com, Inc, 591 F.3d 250, 255 (4th Cir. 2009). However, "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement fail to constitute well-pled facts for Rule 12(b)(6) purposes." Id. (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). This Court also declines to consider ...
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