Prime Mechanical Service, Inc. v. Federal Solutions Group, Inc. et al, No. 3:2018cv03307 - Document 39 (N.D. Cal. 2018)
Court Description: ORDER GRANTING DEFENDANT INDEMNITY COMPANY OF CALIFORNIA'S MOTION TO DISMISS; DISMISSING SECOND CAUSE OF ACTION WITHOUT FURTHER LEAVE TO AMEND. Signed by Judge Maxine M. Chesney on November 28, 2018. (mmclc2, COURT STAFF) (Filed on 11/28/2018)
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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 PRIME MECHANICAL SERVICE, INC., Plaintiff, 8 v. 9 10 11 FEDERAL SOLUTIONS GROUP, INC., et al., United States District Court Northern District of California Defendants. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 18-cv-03307-MMC ORDER GRANTING DEFENDANT INDEMNITY COMPANY OF CALIFORNIA’S MOTION TO DISMISS; DISMISSING SECOND CAUSE OF ACTION WITHOUT FURTHER LEAVE TO AMEND Re: Dkt. No. 29 Before the Court is defendant Indemnity Company of California’s (“ICC”) Motion to Dismiss, brought pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and filed September 14, 2018. Plaintiff Prime Mechanical Service, Inc. has filed opposition, to which ICC has replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows. 1 BACKGROUND2 On March 6, 2017, defendant Federal Solutions Group, Inc. (“FSG”) “was awarded a prime contract [(“the Contract”)] by the United States of America, acting by and through the General Services Administration” (“GSA”), which “required FSG to design and install stair pressurization fans” and “a new heating, ventilation, and air conditioning [(“HVAC”)] system” for the Frank Hagel Federal Building (“the Project”). (See FAC ¶ 7.) On March 28, 2017, “FSG, as principal,” and ICC, “as surety, . . . executed and 1 By order filed October 15, 2018, the Court took the motion under submission. The following facts are taken from the First Amended Complaint (“FAC”) and the exhibits attached thereto. 2 1 delivered to GSA a Payment Bond pursuant to 40 U.S.C. §3131 and §3133 . . . [,] 2 whereby ICC guaranteed the payment to all entities supplying labor, services and 3 material in the prosecution of the work provided for in the Contract.” (See id. ¶ 8; see 4 also id. Ex. A at 1.) 5 6 whereby plaintiff “agreed to perform the HVAC work” required under the Contract “for the 7 sum of $93,700.” (See id. ¶ 10; see also id. Ex. B at 2.) 8 9 United States District Court Northern District of California On March 30, 2017, “FSG entered into a subcontract agreement with [plaintiff],” Plaintiff alleges that, “commencing on or after March 30, 2017 and continuing through August 15, 2017,” plaintiff and its sub-designer “prepared the new HVAC design 10 for the [P]roject, and submitted the document to FSG for submission to the GSA for 11 review and approval.” (See id. ¶ 12.) In addition, plaintiff alleges, it provided several “on- 12 site” services in connection with the Project.3 (See id. ¶ 12.) 13 Plaintiff further alleges that “on or about August 30, 2017,” it “submitted to FSG an 14 invoice . . . in the amount of $34,424.28” (“the Invoice”) (see id. ¶ 13; see also id. Ex. C), 15 which was “due and payable 30 days after FSG’s receipt of the document,” specifically, 16 on September 30, 2017 (see FAC ¶ 13). According to plaintiff, the Invoice is 17 “erroneous[ly] dated May 15, 2017, since [plaintiff] had failed to change the date of a prior 18 invoice.” (See id.) Plaintiff alleges that “more than 90 days has now elapsed” (see id. ¶ 19 19) since payment on the Invoice was due and that “FSG has refused to pay [plaintiff] for 20 the services rendered” for the Project under the Contract (see id.). 21 Based on the above, plaintiff asserts against ICC a claim under 40 U.S.C. 22 § 3133(b) (“Miller Act claim”), by which it seeks to recover on the Payment Bond the 23 amount due under the Invoice. LEGAL STANDARD 24 25 26 Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure “can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged 27 28 3 There is no allegation as to when such “on-site” services were provided. 2 1 under a cognizable legal theory.” See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 2 699 (9th Cir. 1990). Rule 8(a)(2), however, “requires only ‘a short and plain statement of 3 the claim showing that the pleader is entitled to relief.’” See Bell Atlantic Corp. v. 4 Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). Consequently, “a 5 complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual 6 allegations.” See id. Nonetheless, “a plaintiff's obligation to provide the grounds of his 7 entitlement to relief requires more than labels and conclusions, and a formulaic recitation 8 of the elements of a cause of action will not do.” See id. (internal quotation, citation, and 9 alteration omitted). United States District Court Northern District of California 10 In analyzing a motion to dismiss, a district court must accept as true all material 11 allegations in the complaint, and construe them in the light most favorable to the 12 nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). “To 13 survive a motion to dismiss, a complaint must contain sufficient factual material, accepted 14 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 15 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “Factual allegations must be 16 enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S. at 555. 17 Courts “are not bound to accept as true a legal conclusion couched as a factual 18 allegation.” See Iqbal, 556 U.S. at 678 (internal quotation and citation omitted). 19 DISCUSSION 20 By order filed August 15, 2018, the Court granted ICC’s motion to dismiss the 21 Miller Act claim asserted against it in plaintiff’s initial complaint. As set forth in said order, 22 the Court, noting “the Complaint allege[d] plaintiff performed work within the statutory 23 period” (see Order Granting Defendant Indemnity Company of California’s Motion to 24 Dismiss (“August 15 Order”) at 1:25-26), found the claim was not “subject to dismissal as 25 time-barred” (see id. at 1:17-18). The Court did, however, find the claim nonetheless 26 subject to dismissal for a different reason, specifically, because plaintiff “failed . . . to 27 show it ‘furnished labor or material’” as required under 40 U.S.C. § 3133(b)(1). (See id. 28 at 1:27-28; see also id. at 2:2-5 (noting plaintiff only “allege[d] it provided ‘design 3 1 2 3 4 By the instant motion, ICC seeks an order dismissing plaintiff’s Miller Act claim as alleged in the FAC. At the outset, ICC, again relying on the date of the Invoice, contends plaintiff’s 5 Miller Act claim is time-barred. See 40 U.S.C. 3133(b)(4) (providing Miller Act claim 6 “must be brought no later than one year after the day on which the last of the labor was 7 performed or material was supplied by the person bringing the action”). As discussed 8 below, the Court again disagrees. 9 United States District Court Northern District of California services’”; finding “such work does not constitute ‘labor’ under the [Miller] Act”).) As set forth in the August 15 Order, although the Invoice is dated more than a year 10 before plaintiff filed the instant action (see FAC Ex. C), plaintiff alleges it performed work 11 on the Project within the statutory period (see FAC ¶ 12 (alleging “on or after March 30, 12 2017 and continuing through August 15, 2017,” plaintiff “prepared the new HVAC design 13 for the [P]roject”). In addition, plaintiff has endeavored to explain in the FAC the reason 14 for the discrepancy in the dates. (See id. ¶ 13) (alleging use of “erroneous” date was due 15 to plaintiff’s “fail[ure] to change the date of a prior invoice”.) Lastly, although, as ICC 16 points out, plaintiff, despite having been advised to do so in the August 15 Order, has not 17 clarified whether the Invoice sought payment for work that was to be, rather than had 18 been, performed,4 nor has plaintiff pleaded the dates on which any “on-site” services 19 were provided, such ambiguities do not establish “beyond doubt that . . . plaintiff can 20 prove no set of facts that would establish the timeliness of the claim.” See Supermail 21 Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir. 1995). 22 Next, defendant contends plaintiff’s Miller Act claim is subject to dismissal because 23 plaintiff has again failed to allege it “‘furnished labor or material in the prosecution of 24 work’ provided for in [the] [C]ontract.” (See Mot. at 5:17-18.) As discussed below, the 25 Court agrees. 26 27 28 4 For example, plaintiff does not allege whether it submits invoices on a weekly or monthly basis, or otherwise in accordance with any other practice or schedule. 4 United States District Court Northern District of California 1 A civil action may be brought under the Miller Act by any “person that has 2 furnished labor or material in carrying out work provided for in a contract for which a 3 payment bond is furnished” but “has not been paid in full within 90 days after the day on 4 which the person did or performed the last of the labor or furnished or supplied the 5 material for which the claim is made.” See 40 U.S.C. § 3133(b). As used in the Miller 6 Act, the term “labor” primarily encompasses services involving “manual labor,” see United 7 States ex. rel. Shannon v. Fed. Ins. Co., 251 Fed. Appx. 269, 272 (5th Cir. 2007), or 8 “physical toil,” see United States ex. rel. Barber-Colman Co. v. United States Fid. & Guar. 9 Co., No. 93-1665, 1994 WL 108502, at *3 (4th Cir. 1994). Although “work by a 10 professional, such as an architect or engineer” generally does not constitute “labor” within 11 the meaning of the Miller Act, see United States ex. rel. Naberhaus-Burke, Inc. v. Butt & 12 Head, Inc., 535 F. Supp. 1155, 1158 (S.D. Ohio 1982), some courts have found “certain 13 professional supervisory work is covered by the Miller Act, namely, skilled professional 14 work which involves actual superintending, supervision, or inspection at the job site” see 15 United States ex. rel. Olson v. W.H. Cates Constr. Co., 972 F.2d 987, 990-92 (8th Cir. 16 1992) (internal quotation and citation omitted) (citing, as examples, “architect . . . who 17 actually superintends the work as it is being done” and “project manager . . . [who] did 18 some physical labor at the job site” (internal quotation and citation omitted)).5 19 Here, plaintiff alleges it “attended 4 or 5 on-site field meetings . . . to determine 20 the location and layout of the new equipment, . . . performed on-site field coordination 21 with the existing equipment, . . . took on-site field measurements for fabrication of duct 22 work and support hangers, . . . scheduled the start date and while on-site planned site 23 access and crane locations, prepared product and equipment submittals, and obtained 24 security passes.” (See FAC ¶ 12.) The above-listed services are, however, “clerical or 25 administrative tasks which, even if performed at the job site, do not involve the physical 26 27 28 5 Plaintiff, despite having been given the opportunity to do so (see August 15 Order at 2:11-15), does not allege that it or any of its employees performed any such superintending, supervision, or inspection. 5 United States District Court Northern District of California 1 toil or manual work necessary to bring them within the scope of the Miller Act.” See 2 United States ex. rel. Constructors, Inc. v. Gulf. Ins. Co., 313 F. Supp. 2d 593, 597 (E.D. 3 Va. 2004) (holding subcontractor did not furnish “‘labor’ within the contemplation of the 4 Miller Act” where subcontractor’s duties entailed paying invoices, reviewing subcontractor 5 and vendor proposals, supervising the hiring of site personnel, and providing site 6 coordination services). Although taking “on-site field measurements” (see FAC ¶ 12) 7 may have involved some minor physical activity, it does not amount to the physical “toil” 8 required by the Miller Act. See Constructors, 313 F. Supp. 2d at 597; cf. Am. Surety Co. 9 v. United States ex. rel. Barowagee Labs., Inc., 76 F.2d 67, 67-68 (5th Cir. 1935) (holding 10 plaintiff supplied “labor” when its employees took, prepared, and tested samples of gravel 11 for road construction project because such tasks required employees to shovel, 12 transport, dry, sift, separate, and weigh gravel, sand, and clay). 13 14 Accordingly, plaintiff’s Miller Act claim against ICC will be dismissed for failure to plead the requisite furnishing of “labor or material.” See 40 U.S.C. § 3133(b). CONCLUSION 15 16 17 For the reasons stated above, defendant ICC’s motion is hereby GRANTED and the Second Cause of Action is hereby DISMISSED without further leave to amend. 18 19 IT IS SO ORDERED. 20 21 Dated: November 28, 2018 MAXINE M. CHESNEY United States District Judge 22 23 24 25 26 27 28 6
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