New Millenium Building Systems LLC v. PAUL S AKINS COMPANY INC et al, No. 4:2012cv00076 - Document 12 (M.D. Ga. 2012)
Court Description: ORDER granting 9 Motion to Dismiss. Ordered by Judge Clay D. Land on 09/13/2012.(jcs)
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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA COLUMBUS DIVISION THE UNITED STATES OF AMERICA, * FOR THE USE AND BENEFIT OF NEW MILLENNIUM BUILDING SYSTEMS, * LLC, * Plaintiff, * vs. * PAUL S. AKINS COMPANY, INC., STEEL-PLUS, LLC, and GREAT * AMERICAN INSURANCE COMPANY, * Defendants. * CASE NO. 4:12-CV-76 (CDL) O R D E R In this action, Plaintiff New Millennium Building Systems, LLC (“New Millennium”) asserts a claim for payment for supplies it provided in connection with a federal construction project. New Millennium seeks to enforce a payment bond executed in accordance with the Miller Act, 40 U.S.C. §§ 3131-34, by the principal contractor, Defendant Paul S. Akins Company (“Akins”), and its surety, Defendant (“Great American”). damages for breach subcontractor, New of Great Millennium contract Defendant American Insurance also Akins from Steel-Plus, seeks and LLC Company additional its alleged (“Steel-Plus”). Lastly, New Millennium asserts claims for attorneys’ fees from Steel-Plus pursuant to O.C.G.A. American under O.C.G.A. § 10-7-30. § 13-1-11 and from Great Akins and Great American (collectively, “Defendants”) have filed a motion to dismiss the claim for attorneys’ fees that is asserted pursuant to O.C.G.A. § 10-7-30. As discussed below, the Court concludes that New Millennium cannot recover attorneys’ fees pursuant to O.C.G.A. § 10-7-30 in this Miller Act action, and Defendants’ Motion to Dismiss this attorneys’ fees claim (ECF No. 9) is therefore granted. MOTION TO DISMISS STANDARD When considering a 12(b)(6) motion to dismiss, the Court must accept complaint as and true limit all facts its consideration exhibits attached thereto. set forth to in the the plaintiff=s pleadings and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Twombly, 550 U.S. at 570). The complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. “[A] formulaic recitation of the elements of a cause of action will not do[.]” Id. Although the complaint must contain factual allegations that “raise a reasonable expectation that discovery will reveal evidence of” the plaintiff=s claims, id. at 2 556, “Rule 12(b)(6) does not permit dismissal of a well-pleaded complaint simply because ‘it strikes a savvy judge that actual proof of those facts is improbable,’” Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 556). FACTUAL ALLEGATIONS The following allegations are relevant to the claim for attorneys’ fees under O.C.G.A. § 10-7-30. written contract with the federal Akins entered into a government to construct dining facility at Fort Benning, Georgia (“the Project”). a Akins and Great American executed and delivered to the United States of America a payment bond in accordance with section 3131 of the Miller Act. Akins contracted materials and fabrication. with Steel-Plus for certain New Millennium claims it supplied steel materials to Steel-Plus, for which it has not been paid in full. New Akins and Great American admit that materials supplied by Millennium were incorporated Answer ¶ 11, ECF No. 8. into the Project. Defs.’ New Millennium seeks to enforce the Miller Act bond to cover the amount due for these materials. New Millennium also seeks attorneys’ fees from Great American pursuant to the contract between New Millennium and Steel-Plus and relies Compl. ¶ upon 21, O.C.G.A. ECF No. 1; § 10-7-30 see also to recover Compl. Ex. those B, fees. Credit Application 3, ECF No. 1-2 at 10 (providing for attorneys’ fees in the event of nonpayment). 3 DISCUSSION The pending motion to dismiss presents an issue that must be decided as a matter of law: whether a plaintiff seeking to enforce a bond under the Miller Act can also assert a state law claim for attorneys’ fees pursuant to O.C.G.A. § 10-7-30. Defendants argue for dismissal of this claim because federal law, not state law, provides the exclusive remedy for a claim enforcing a Miller Act bond and thus precludes attorneys’ fees under O.C.G.A. § 10-7-30. a claim for On the other hand, New Millennium urges the Court to hold that the Miller Act does not provide the exclusive remedy. For the reasons stated below, the Court concludes that O.C.G.A. § 10-7-30 cannot provide a remedy when the sole basis for the claim against a party arises under the Miller Act.1 The Supreme Court has held that Miller Act remedies are a matter of federal law and that courts should apply federal law to decide claims for attorneys’ fees. rel. Indus. Lumber Co. 417 U.S. F.D. Rich Co. v. U.S. ex 116, 127-28 (1974). The Supreme Court in Rich concluded that the Ninth Circuit erred in construing the Miller Act to allow an award of attorneys’ fees 1 O.C.G.A. § 10-7-30 provides as follows: “In the event of the refusal of a corporate surety to . . . make payment to an obligee . . . and upon a finding that such refusal was in bad faith, the surety shall be liable to pay such obligee . . . all reasonable attorney’s fees for the prosecution of the case against the surety.” The language of the statute does not purport to restrict its application to state law claims. 4 based on a California statute providing for attorneys’ fees in state actions construction on bonds projects. involving Id. at state 126-27. and The municipal Supreme Court emphasized that “[t]he Miller Act provides a federal cause of action, and the scope of the remedy as well as the substance of the rights created thereby is a matter of federal not state law.” Id. at 127. California state inapplicable to The Supreme Court also pointed out that courts federal had already government held projects that and statute that this inconsistency between state and federal court demonstrates the utility of a uniform federal rule. Id. at 127-28 (“We think it better to extricate the federal courts from the morass of trying to divine ‘state policy’ as to the award of attorneys’ fees in suits on construction bonds.”). uniform federal expectations of The Supreme Court added that a rule would better such potential serve litigants” the “reasonable because federal projects often “involve construction in more than one state” and parties often “have little or no contact, other than the contract itself, with the state in which the federal project is located.” Id. at 127. Lastly, the Supreme Court reasoned that there was no Congressional intent to provide specifically for attorneys’ fees under the Miller Act because “Congress is aware of the issue” and did not include such language in the statute. Id. at 131. For these reasons, the Supreme Court decided not to 5 “judicially obviate” the federal common law rule “in the context of everyday commercial litigation,” which provides that attorneys’ fees are generally not available absent a statute, contractual provision, or bad wanton, or oppressive conduct. faith or otherwise vexatious, Id. at 129-30. The only other binding precedent in this Circuit on this issue supports claims for attorneys’ fees cannot be asserted in a Miller Act action. The Fifth the Circuit the conclusion reversed an award that of state law attorneys’ fees “to extent it is based on the Miller Act claim” because the Supreme Court in Rich held that “federal common law governs the claim for attorney’s fees in Miller Act cases.” U.S. ex rel. Garrett v. Midwest Constr. Co., 619 F.2d 349, 352 (5th Cir. 1980).2 The Fifth Circuit also found that a district court correctly held attorneys’ fees under Fla. Stat. § 627.756 “unavailable with respect to the Miller Act claim.” U.S. ex rel. Vulcan Materials v. Volpe Constr., 622 F.2d 880, 887 (5th Cir. 1980).3 2 In Bonner v. City of Prichard, the Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981. 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc). 3 The court did award state law attorneys’ fees against a surety sued on a bond created under state law. Vulcan, 622 F.2d at 886-87 (“[O]ne of the sureties is not governed by the Miller Act [because the] payment bond was executed under Florida law [and the attorneys’ fees statute was] specifically applicable to bonds written by insurer under the laws of Florida.”) (emphasis added) (internal quotation marks omitted). 6 Here, New Millennium’s only claim for relief against Great American arises under the Miller Act. See 40 U.S.C. § 3133(b)(1) (allowing “[e]very person that has furnished labor or material in carrying out work provided for in a contract for which a payment bond is furnished under” the Miller Act to bring a civil action on the payment bond). New Millennium seeks to recover its attorneys’ fees in its Miller Act action pursuant to the Georgia statute. Court’s holding in This is clearly precluded by the Supreme Rich that “[t]he Miller Act provides a federal cause of action, and the scope of the remedy as well as the substance of the rights federal not state law.” created thereby is a matter of 417 U.S. at 127. The Court rejects New Millennium’s invitation to extend the reasoning of other circuits to support its state law claim for attorneys’ fees. First, New Millennium cites a Ninth Circuit case allowing attorneys’ fees on a state law cause of action that was before jurisdiction. the federal court based on diversity See K-W Indus. Div. of Assocs. Techs., Ltd. v. Nat’l Sur. Corp., 855 F.2d 640, 642-43 (9th Cir. 1988) (“Here [plaintiff] . . . .”). allowing is not suing on the bond; it is suing in tort Next, New Millennium cites a Tenth Circuit case a state-based, quasi-contract independent from a Miller Act claim. theory of recovery, See U.S. ex rel. Sunworks Div. of Sun Collector Corp. v. Ins. Co. of N. Am., 695 F.2d 455, 7 457-58 (10th Cir. 1982) (“In its quantum meruit claim, [Plaintiff] does not seek recovery from the Miller Act payment bond. Instead it asserts [unjust enrichment].”). These cases did not involve a state law claim for attorneys’ fees where the underlying substantive claim was asserted under the Miller Act. These cases attorneys’ provide fees no based authority on a for Miller Act awarding claim, and state the law Court declines to extend their reasoning to create such a remedy. New Millennium also points out that the Fifth Circuit more recently held that the Miller Act does not preclude supplemental jurisdiction contractor. over state law claims for fees against a U.S. ex rel. Cal’s A/C & Elec. v. Famous Constr. Corp., 220 F.3d 326, 327-29, (5th Cir. 2000) (noting that Rich “announced only that Miller Act claims themselves do not incorporate state law remedies such as attorney's fees; it did not read the Act to preclude the pursuit of state causes of action for fees in addition to Miller Act claims”) (emphasis omitted). permit Although the court concluded that Louisiana law would recovery of attorneys’ fees from a contractor that unreasonably withheld payment, it did not permit recovery from the surety since “recovery on the bond must be under the Miller Act.” Id. at 328-29, 329 n.8 (noting that the Miller Act “is the exclusive remedy available to a supplier against a surety . . . on a Miller Act payment bond”). 8 Therefore, even if the Court found Cal’s A/C to be persuasive authority, it does not support an award of state law attorneys’ fees against a surety on a Miller Act payment bond. In summary, Rich’s holding still mandates that federal law, not state law, controls the available remedies in a Miller Act bond action. Therefore, the Court finds that O.C.G.A. § 10-7-30 cannot supply a remedy for a Miller Act claim, even if O.C.G.A. § 10-7-30’s language does not explicitly limit its application to bonds created under state law. CONCLUSION For the reasons set forth above, a state law claim for attorneys’ fees pursuant to O.C.G.A. § 10-7-30 is unavailable as a matter of law in this action where the underlying claim is asserted under the Miller Act. Defendants’ Motion to Dismiss is therefore GRANTED. IT IS SO ORDERED, this 13th day of September, 2012. S/Clay D. Land CLAY D. LAND UNITED STATES DISTRICT JUDGE 9
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