Whiting-Turner/A.L. Johnson v. P.D.H. Development

• Citation: 184 F.Supp.2d 1368
• Decision Date: 21 March 2000
• Docket Number: No. 3:98-CV-107(DF).,3:98-CV-107(DF).
• Parties: WHITING-TURNER/A.L. JOHNSON, a Joint Venture, Plaintiff, v. P.D.H. DEVELOPMENT, INC., United States of America, and Athens First Bank & Trust Company, Defendants.
• Court: U.S. District Court — Middle District of Georgia

184 F.Supp.2d 1368

WHITING-TURNER/A.L. JOHNSON, a Joint Venture, Plaintiff, v. P.D.H. DEVELOPMENT, INC., United States of America, and Athens First Bank & Trust Company, Defendants.

No. 3:98-CV-107(DF).

United States District Court, M.D. Georgia, Athens Division.

March 21, 2000.

Curtis William Martin, William Garth Snider, Griffin, Cochrane & Marshall, Atlanta, GA, for Whiting-Turner/A.L. Johnson, a Joint Venture, a Joint Venture, plaintiffs.

Thomas H. Rogers, Jr., Athens, GA, for Athens First Bank and Trust Co., defendant.

Vicki R. Crowell, Macon, GA, Ann Reid, Department of Justice, Washington, DC, for U.S.A., defendant.

ORDER

FITZPATRICK, District Judge.

Whiting-Turner/A.L. Johnson ("Whiting-Turner") initiated this lawsuit in the Superior Court of Clarke County by filing a complaint in interpleader, as amended, in which it seeks to determine entitlement to $26,330.14 that it is obligated to pay P.D.H. Development, Inc. ("PDH") as compensation for work performed on the University of Georgia Animal Science Complex. Whiting Turner named three defendants to the action: (1) PDH; (2) Athens First Bank & Trust Company ("Athens First"); and (3) the United States of America. The complaint for interpleader was filed pursuant to 28 U.S.C. § 2410, in which the United States waived its sovereign immunity for interpleader actions involving tax liens. The United States subsequently removed the case to federal court pursuant to 28 U.S.C. § 1444, which allows the United States to remove any action brought in state court against the United States under § 2410 to the district court. This matter is now before the Court on cross-motions for summary judgment filed by the United States and Athens First.

I. STATEMENT OF FACTS

On August 9, 1996, Whiting-Turner entered into a subcontract (the "Subcontract") with PDH to perform all of the grading and site utilities work on a project known as the University of Georgia Animal Science Complex (the "Project"). In subsection (b) of Article 5 of the Subcontract, PDH agreed to submit to Whiting-Turner applications for payment by the fifteenth of each month, or as otherwise provided in the contract documents, so as to enable Whiting-Turner to apply for payment from the Project owner. Subsection (a) of Article 5 of the Subcontract provides for payment of the contract amount as follows: Whiting-Turner was obligated to pay PDH an amount equal to ninety percent (90%) of the value of the work performed as determined by the architect and approved by the construction manager during any calendar month within fifteen (15) days after payment therefore was received by the construction manager from the owner of the project or within such time as specified by law. Additionally, the contract provides that

Retainage and any other balance of the Contract Amount shall be payable within fifteen (15) days ... after the work under this Agreement has been completed and accepted by Owner, Architect, and [Whiting-Turner] and following approval by the Architect of the final application for payment and settlement of all claims, if any under this Agreement, provided that Trade Contractor has fully performed all of its obligations hereunder.

Article 5(a) of the Subcontract.

On July 18, 1997, Whiting-Turner declared PDH to be in default under the Subcontract. Whiting-Turner terminated the Subcontract and PDH ceased all work on the Project as of July 18, 1997. The amount due and owning PDH for the services it performed on the Project is $26,330.14.

Two independent parties, Athens First and the United States, claim an interest in the money owed to PDH under the Subcontract. PDH has not claimed an independent entitlement to any portion of the fund involved in this case or indicated its support for either of the two claims of entitlement.

Athens First's claim is premised on its security interest in all of PDH's accounts receivable. Over a period of several years, Athens First advanced loans and funds to PDH. PDH executed numerous promissory notes, security agreements, and UCC-1 financing statements granting a security interest in all of PDH's accounts receivable to Athens First (Aff. of A. Middleton Ramsey (tab # 22), paras. 3 & 4; Exhibits D, E, F, I, J, K, O, and Q). On February 10, 1994, Athens First filed a UCC-1 financing statement to perfect its interest in "All Furniture, Fixtures, Equipment, Accounts Receivable and General Intangibles now or hereafter existing or created" (Aff. of A. Middleton Ramsey (tab # 22), Exhibit O). Athens First filed a second UCC-1 financing statement, covering "All Furniture, Fixtures, Equipment, Inventory, Accounts Receivable and proceeds thereof, all General Intangible instruments, chattel paper and cash of P.D.H. Development, Inc. now owned or hereinafter acquired or created," on June 8, 1995 (Aff. of A. Middleton Ramsey (tab # 22), Exhibit Q). Athens First has not advanced any loans or funds to P.D.H. since August 4, 1995 (Aff. of A. Middleton Ramsey (tab # 22), para. 5). As of January 31, 1997, the balance owed by PDH to Athens First was $345,678.90 principal and $41,338.45 interest (Aff. of A. Middleton Ramsey (tab # 22), para. 6).

The United States' interest is premised on assessments made by the Internal Revenue Service ("IRS") against P.D. Hill Development, Inc.¹ On July 15, 1996, the IRS made assessments against P.D. Hill Development, Inc. for $12,873.12 in unpaid Form 941 liabilities for the fourth quarter of 1995 (Athens First's Mot. for Summ. J. (tab # 19), Exhibit BB). On January 31, 1997, the IRS filed a Notice of Federal Tax Lien against "PD Hill Development Inc, a corporation DBA Phoenix Pipe & Dirt" in the Clarke County, Georgia Superior Court Clerk's Office (Athens First's Mot. for Summ. J. (tab # 19), Exhibit BB). Samuel Elliot, a revenue officer with the IRS in Athens, Georgia, asserts that the "balance of P.D. Hill Development's Form 941 liabilities for the fourth quarter of 1995 as of May 3, 1999, is $23,592.51" (Decl. Of Samuel W. Elliot, para. 5, attached as Exhibit 3 to the United States' Statement Of Material Facts Not In Dispute (tab # 27)).

II. MOTIONS TO STRIKE

Athens First has objected to, and moved to strike, the affidavits of Paul Dennis Hill and Samuel W. Elliot, which the United States presented in support of its motion for summary judgment (Mot. to Strike Unsworn Decl. of Paul Dennis Hill (tab # 31); Mot. to Strike Unsworn Decl. of Samuel W. Elliot (tab # 33); Mot. to Strike Supplemental Decl. of Paul Dennis Hill and Renewed Mot. to Strike Decl. of Paul Dennis Hill (tab # 42); Mot. to Strike Supplemental Decl. of Samuel W. Elliot and Renewed Mot. to Strike Decl. of Samuel W. Elliot (tab # 44)). In an effort to cure the objectionable portions of the declarations, the United States filed a Supplemental Declaration of Paul Dennis Hill (tab # 41) and a Supplemental Declaration of Samuel W. Elliot (tab # 37) following Athens First's initial motions to strike. Given that the United States was able to address many of Athens First's concerns through the supplemental declarations, the Court considers the first motions to strike to be moot and will now address the issues raised in Athens First's motions to strike the supplemental declarations.

In order for the supplemental declarations to be used as summary judgment proof, they must be sworn and meet the requirements of Federal Rule of Civil Procedure 56(e). The unsworn declarations submitted by the United States are of the same force and effect as sworn affidavits because both were made under penalty of perjury and verified as true and correct. 28 U.S.C. § 1746. Rule 56(e) also requires that

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith.

Fed.R. Civ.P. 56(e).

With respect to the Supplemental Declaration of Paul Dennis Hill, Athens First objects to paragraph 5, in which Mr. Hill states that "[i]t is well known in the community of Clarke County that `P.D. Hill Development, Inc.' and `P.D.H. Development, Inc.' are the same corporation. It is known by all banks, suppliers and construction contractors in the community." In his declaration, Mr. Hill states that, as the president of "P.D. Hill Development, Inc. a/k/a P.D.H. Development, Inc." (para.2), he has operated his construction business in Clarke County under these names since 1989 (para.3). Mr. Hill also states that, as an agent for his construction business, he has dealt with every major bank, supplier of materials, and contractor in Clarke County (para.4). Based on Mr. Hill's extensive business dealings in Clarke County, perhaps the Court, or a jury at trial, could reasonably infer that the banks, suppliers and construction contractors in the community do know that "P.D. Hill Development, Inc." and "P.D.H. Development, Inc." are the same corporation. However, a reasonable inference based on specific admissible facts is different from Mr. Hill's affirmative statement as to what he believes is known in the community. As Mr. Hill's statements as to what is known in the community would not be admissible in evidence, the Court hereby strikes paragraph 5 of the Supplemental Declaration of Paul Dennis Hill pursuant to Rule 56(e).

Athens First also objects to parts of the Supplemental Declaration of Samuel W. Elliot. First, Athens First objects to Mr. Elliot's statements regarding the application for employer identification number filed in the name of "P.D. Hill Development, Inc." (para.3). Athens First argues that these statements are hearsay and thus would not be admissible at trial. Specifically, Athens First objects to the second sentence of paragraph 3, which provides that "[t]he name `P.D. Hill Development, Inc.,' used...