US v. TAC Const. Co., Inc.

Decision Date30 January 1991
Docket NumberCiv. A. No. S89-0859(G).
Citation760 F. Supp. 590
PartiesUNITED STATES of America, Plaintiff, v. TAC CONSTRUCTION COMPANY, INC., et al., Defendants.
CourtU.S. District Court — Southern District of Mississippi

William H. Petty Jr., Dukes, Dukes, Keating & Faneca, Gulfport, Miss. for Bruces El.

Doyle L. Coats, Hester & Coats, Gulfport, Miss., for TAC Const. Co., Inc.

Andrew J. Kilpatrick, Jr., Reynolds & Kilpatrick, Jackson, Miss., for Williams Equipment & Supply Co.

David W. Mockbee, Mary Elizabeth Hall, Jackson, Miss., for Binswanger Glass Co., intervenor.

Neville H. Boschert, Paul W. Crutcher, Jackson, Miss., for Thrasher Co.

David W. Case, Luther S. Ott, Ott & Purdy, Jackson, Miss., for Easley & Easley Millwork, Inc.

H.M. Yoste, Jr., Page, Mannino & Peresich, Biloxi, Miss., for Saucier Bros. Roofing, Inc.

John C. Wheeless, Jr., Wheeless, Beanland, Shappley & Bailess, Vicksburg, Miss., for First Nat. Bank of Vicksburg.

Stanford E. Morse, Jr., White & Morse, Gulfport, Miss., for Ray C. Weaver Mechanical Contractors, Inc.

Dorian E. Turner, Brunini, Grantham, Crower, & Hewes, Jackson, Miss., for Major Industries, Inc.

Kevin J. Necaise, Gulfport, Miss., for Coast Lumber and Bldg. Supply, Inc.

John L. Low, IV, Jackson, Miss., for Ace Blinds, Inc.

Mark F. McIntosh, Thomas, Price, Alston, Jones & Davis, Jackson, Miss., for Landis & Gyr Powers, Inc.

Rufus Alldredge, Jr., Franke, Rainey & Salloum, Gulfport, Miss., for Deposit Guar. Nat. Bank.

Robert S. Graham, T.E. Davidson, Jackson, Miss., for Professional Service Industries, Inc.

Sanford R. Steckler, Biloxi, Miss., for Seasons Nursery.

Alfred R. Koenenn, Gulfport, Miss., for Harold Elrod d/b/a Elrod Const. Co.

Phil B. Abernethy, Jackson, Miss., for Engle, Inc.

Dwight A. Dahmes, New Orleans, La., for Atlas-Edco, Inc.

John H. Henley and Ross E. Henley, Jackson, Miss., for Simplex Time Recorder Co.

Russell S. Gill, Biloxi, Miss., for Cochran Plastering Co.

Robert C. Galloway, James B. Galloway, Gulfport, Miss., for St. Paul Fire & Marine.


GEX, District Judge.

This cause comes before the Court on the motion of the defendant/claimant, Binswanger Glass Company Binswanger, for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. The remaining claimants filed joinders in Binswanger's motion or filed their own motions for judgment on the pleadings. Because the claimants submitted exhibits which are beyond the pleadings, the Court will consider their motions as motions for summary judgment. The United States has moved to dismiss the counterclaim of the defendant, Engle, Inc., Engle pursuant to Rules 12(b)(1), 12(b)(6), and 12(h)(3) of the Federal Rules of Civil Procedure. The Court has duly considered the record in this action, in addition to the briefs of counsel, and being fully advised in the premises, concludes as follows:

Standard of Review

Upon consideration of the United State's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, this Court must construe the counterclaimant's complaint in the light most favorable to the counterclaimant, and the allegations must be accepted as true. Radovich v. National Football League, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957); Reeves v. City of Jackson, 532 F.2d 491, 493 (5th Cir.1976). The motion may not be granted unless it is apparent that the counterclaimant would not be entitled to recover under any state of facts which could be proven in support of its claims.

In making its determinations of fact on a motion for summary judgment, the Court must view the evidence submitted by the parties in the light most favorable to the nonmoving party. McPherson v. Rankin, 736 F.2d 175, 178 (5th Cir.1984). The Supreme Court has discussed and clarified the relevant standard for summary judgment:

In our view, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Furthermore, speculative evidence, lacking a reasonable basis in fact, is insufficient to enable the nonmoving party to avoid summary judgment. "There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986).

Although Rule 56 is peculiarly adapted to the disposition of legal questions, it is not limited to that role. Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis, 799 F.2d 218, 222 (5th Cir.1986). Hence, "the mere existence of a disputed factual issue, therefore, does not foreclose summary judgment. The dispute must be genuine, and the facts must be material." Id. The Fifth Circuit has determined that:

An issue is genuine if the evidence supporting its resolution in favor of the party opposing summary judgment, together with any inferences in such party's favor that the evidence allows, would be sufficient to support a verdict in favor of that party. If, on the other hand, the evidence offered by both the moving and opposing parties would support only one conclusion and, even if all the evidence to the contrary is fully credited, a trial court would be obliged to direct a verdict in favor of the moving party, the issue is not genuine.
* * * * * *
Thus, as the Supreme Court recently said in Anderson v. Liberty Lobby, Inc., affirming a summary judgment rendered by a trial court: "The inquiry performed is the threshold inquiry of determining whether there is a need for trial — whether, in other words, there are any genuine factual issues that can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party."

Id. at 223.

"With regard to `materiality,' only those disputes over facts that might affect the outcome of the lawsuit under the governing substantive law will preclude summary judgment." Phillips Oil Company v. OKC Corporation, 812 F.2d 265, 272 (5th Cir.1987).

Applying the summary judgment standard to the evidence presented by the parties to this motion, the Court makes the following findings.

Statement of Facts

On December 28, 1989, the United States filed the instant action pursuant to 28 U.S.C. §§ 1335, 1345, and 2361 by interpleading into the registry of the Court the sum of $168,035.40. This sum was a portion of the unpaid contract balance under a contract between TAC Construction Company, Inc. (TAC) and the United States Department of Navy for the construction of the Commander, Naval Oceanographic Command Administration Facility (the project) at the John C. Stennis Space Center1 in Bay St. Louis, Mississippi.

The United States interpled the amount of $168,035.40 after deducting from the unpaid contract proceeds the amount of $12,000 for work allegedly uncompleted and the amount of $16,870.01 to satisfy two federal tax liens. Subsequently, the United States paid the $12,000 into the registry of the Court which it had originally withheld. Binswanger, an unpaid subcontractor, intervened and asserted a claim for $76,477 as its unpaid contract balance against the interpled funds and asserted a cross-claim against TAC and the sureties on the payment bond, Sam L. Bass, Jr., and John L. Bass. Likewise, all of the subcontractors and suppliers intervened, filed answers, cross-claims, and motions. Numerous other subcontractors and suppliers on the project have also asserted their equitable interests in the unpaid contract balance.

First National Bank of Vicksburg (First National) was the assignee of the contract between TAC and the United States. Pursuant to that assignment, First National claims $88,666.13 plus interest.2 TAC also executed security agreements granting Deposit Guaranty National Bank (DGNB) a security interest in all of TAC's accounts, contract rights, and chattel paper.

Virtually all parties have filed motions for judgment on the pleadings or for summary judgment. The Court's ruling on these motions will have the effect of deciding the rights of all parties to the fund due to the nature of this action even if a particular party has not filed a motion.

Conclusions of Law
I. The Interpled Funds
A. The Contractor — TAC

TAC's claim against the interpled funds cannot be superior to the subcontractors and suppliers because it has not paid them. In Pearlman v. Reliance Insurance Company, 371 U.S. 132, 83 S.Ct. 232, 9 L.Ed.2d 190 (1962), the court noted that "the contractor, had he completed his job and paid his laborers and materialmen, would have become entitled to the contract retainage fund...." Pearlman, 371 U.S. at 141, 83 S.Ct. at 237. Furthermore, TAC assigned all of its interest in the contract proceeds to First National and assigned all of its accounts and contract rights to DGNB. Thus, TAC's claim against the fund is lower in priority than the assignee banks and the subcontractors.

B. The Sureties — Sam and John Bass

The sureties have yet to pay any of the claims of the subcontractors. In United States Fidelity & Guaranty Co. v. United States, 475 F.2d 1377, 201 Ct.Cl. 1 (1973), the court held:

In North Denver Bank v. United States, 432 F.2d 466, 193 Ct.Cl. 225 (1970), this court followed the rule laid down in American Sur. Co. v. Westinghouse Elec. Mfg. Co., 296 U.S. 133, 56 S.Ct. 9, 80 L.Ed. 105 (1935), in which it was held

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