GLF Construction Corporation v. FEDCON Joint Venture et al, No. 2:2016cv13022 - Document 25 (E.D. La. 2017)
Court Description: ORDER & REASONS granting 8 Motion to Stay. This matter is administratively closed pending the stay. Signed by Judge Sarah S. Vance on 3/7/2017. (mmm)
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GLF Construction Corporation v. FEDCON Joint Venture et al Doc. 25 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA UNITED STATES OF AMERICA for the use and benefit of GLF CONSTRUCTION CORPORATION VERSUS CIVIL ACTION NO. 16-130 22 FEDCON J OINT VENTURE, ET AL SECTION “R” (4) ORD ER AN D REASON S Before the Court is the m otion of FEDCON J oint Venture, David Boland, Inc., J T Construction Enterprise Corporation, and Western Surety Com pany to stay pending the com pletion of contractual dispute resolution procedures. 1 For the following reasons, the Court GRANTS defendants’ m otion. I. BACKGROU N D This dispute arises out of a construction contract between the United States, by and through the US Army Corps of Engineers (USACE), and defendant FEDCON, a joint venture consisting of David Boland, Inc. and J T Construction. 2 On or about October 18, 20 13, FEDCON was awarded a 1 2 R. Doc. 8. R. Doc. 1 at 1-3 ¶¶ 2, 9. Dockets.Justia.com contract (the Prim e Contract) to perform all work on the “Resilient Features” project. 3 The contract called for repair and raising of substandard levees along a section of the Mississippi River in Plaquem ines Parish, Louisiana. 4 As required by the Prim e Contract, FEDCON executed and delivered to USACE a Miller Act payment bond, under which FEDCON and Western Surety bound themselves to pay the sum under the bond. 5 On or about J anuary 22, 20 14, GLF Construction entered into a subcontract with FEDCON to furnish labor, m aterials, and services on the project and com plete a portion of FEDCON’s scope of work under the Prime Contract for the agreed price of $ 10 ,517,859.50 . 6 In May of 20 16, FEDCON term inated the subcontract with GLF Construction. 7 On J uly 20 , 20 16, GLF Construction filed this Miller Act lawsuit alleging that FEDCON breached its subcontract with GLF Construction. 8 GLF Construction seeks paym ent under the Miller Act Bond, and also brings claim s for breach of contract and unjust enrichm ent. 9 On October 19, 20 16, the defendants filed a m otion to stay, arguing that GLF Construction is 3 4 5 6 7 8 9 Id. Id. Id. ¶ 10 ; R. Doc. 1-1 at 1 (Miller Act Paym ent Bond). R. Doc. 1 at 3-4 ¶ 11. Id. at 11 ¶ 35. Id. at 12 ¶ 37. Id. at 12-16. 2 bound by the terms of the subcontract with FEDCON to stay any litigation until the com pletion of the dispute resolution procedures contained in the subcontract. 10 GLF Construction filed a response in opposition, 11 and defendants replied. 12 II. D ISCU SSION The Court has “broad discretion to stay proceedings as an incident to its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 70 6 (1997) (citation omitted); see also United States v. Colom b, 419 F.3d 292, 299 (5th Cir. 20 0 5); Ali v. Quarterm an, 60 7 F.3d 10 46, 10 49 (5th Cir. 20 10 ) (recognizing that “district courts have inherent authority to control their dockets”). Further, in the decision of whether a stay should be granted, the Court is guided by the factors of judicial economy and convenience for the Court, for counsel, and for the parties. See Landis v. N . Am . Co., 299 U.S. 248, 254 (1936). How this “can best be done calls for the exercise of judgm ent, which m ust weigh com peting interests and m aintain an even balance.” In re Beebe, 56 F.3d 1384, 1995 WL 337666, at *2 (5th Cir. 1995) 10 11 12 R. Doc. 8-1 at 1-2. R. Doc. 12. R. Doc. 19. 3 (quoting Landis, 299 U.S. at 254-55); see also Kansas City So. R. Co. v. United States, 282 U.S. 760 , 763 (1931). In their m otion to stay, defendants argue that the subcontract between FEDCON and GLF Construction explicitly provides for a stay of all litigation against FEDCON and Western Surety in Paragraph 23. 13 Paragraph 23 states: If the Prime Contract incorporated herein is one for which the Contractor has provided any bond(s) pursuant to 40 U.S.C. § 270 a, the “Miller Act,” . . . then the Subcontractor expressly agrees to stay any action or claim under this Subcontract Agreement against the Contractor and against the Contractor’s surety and its Payment Bond and Perform ance Bond pending the com plete and final resolution of the Prim e Contractor’s contractual rem edial procedure or the Subcontract Agreem ent’s m ediation procedure, as required by Paragraph 13, above. 14 Paragraph 13, in turn, explains the applicable dispute resolution provisions. It reads: A. The contractual rem edial procedure described in Section 0 0 70 0 – Contractual Clauses, 52.233-1 Disputes. (J ul 20 0 2) of the Prim e Contract relating to claim s for which [USACE] m ay be responsible is specifically incorporated herein by reference and m ade a part of this Subcontract Agreem ent. The term “claim ” as utilized in this paragraph shall include any request for m onetary or other relief, claim , appeal, or action arising from the 13 R. Doc. 8-1 at 2-3. Defendants’ m otion also argues that a stay is proper because of a concurrent lawsuit filed by FEDCON against GLF Construction pending in state court in Florida. Id. at 3-4. The state court litigation has been dism issed on forum non conveniens grounds, and therefore this argum ent is m oot. See R. Doc. 24-1 at 12. 14 R. Doc. 1-2 at 10 ¶ 23. 4 subcontractor for which [USACE] has, or m ay have, responsibility. The Subcontractor shall first pursue and fully exhaust said procedure before com mencing any other action against the Contractor or its surety for any claims it m ay have arising out of its performance of the Work herein. Upon the Subcontractor’s written request, the Contractor agrees to prosecute all claim s subm itted by the Subcontractor under the contractual rem edial procedure of the Prim e Contract on behalf of, and to the extent required by, the Subcontractor. . . . Final determ ination of the Subcontractor’s claim (s) by the appropriate board or court shall be final and binding on the Subcontractor and the Contractor shall have no further liability, responsibility, or obligation to the Subcontractor except as may be otherwise provided in this Subcontract Agreement. 15 GLF Construction does not dispute the validity or enforceability of Paragraph 13A. Instead, it argues that Paragraph 13A is not applicable because none of its claim s against FEDCON “relate[s] to claim s for which the Owner, the Corps of Engineers, m ay be responsible.”16 GLF Construction argues that defendants’ m otion neither asserts that USACE is responsible for GLF Construction’s claim s, nor contains evidence to support that contention. 17 First, the language of the Subcontract establishes that as long as USACE “has, or m ay have, responsibility” for GLF Construction’s breach of contract and Miller Act claim s, GLF Construction is contractually obligated to stay any litigation pending com pletion of the applicable dispute 15 16 17 Id. at 7 ¶ 13. R. Doc. 12 at 4. Id. at 3. 5 resolution procedures. 18 The word “m ay” indicates that the liability or responsibility of USACE need not be established for Paragraph 13A to apply, but instead the responsibility or liability need only be a possibility. See May , Black’s Law Dictionary (10 th ed. 20 14) (defining m ay as “to be a possibility”); Merriam -W ebster Dictionary Online, www.merriam-webster.com (last visited February 6, 20 17) (defining may as “used to indicate possibility or probability”). GLF Construction’s claim s against defendants arise out of defendants’ alleged failure to construct a tem porary access road and two tem porary work platform s. 19 According to GLF Construction, FEDCON was responsible for this construction. 20 But the subcontract itself does not m ake clear that the road and work platform is FEDCON’s responsibility. Instead, the subcontract merely notes that the access road and work platform s “will be perform ed by others.”21 Further, defendants subm it the declaration of David Boland, president of David Boland, Inc., in which he attests that USACE has acknowledged at least partial responsibility for the conditions that form the 18 R. Doc. 1-2 at 7 ¶ 13 (em phasis added); see also id. (“The contractual remedial procedure described in . . . the Prime Contract relating to claim s for which the Ow ner m ay be responsible.”) (em phasis added). 19 R. Doc. 1 at 6-7 ¶¶ 19-24. 20 R. Doc. 1 at 5 ¶ 15. 21 R. Doc. 1-2 at 15. 6 basis of GLF Construction’s claims. 22 In support of this attestation, defendants also subm it an April 7, 20 16 letter from USACE to FEDCON in which USACE “acknowledges that the field surveyed locations of the protected side construction easem ent . . . differ from the layout shown on contract drawing C-10 2.”23 Although GLF Construction contests Boland’s declaration with a declaration of its own, 24 it did not address the April 20 16 letter from USACE, and it has not negated the plausibility of USACE’s responsibility. Therefore Paragraph 13A applies, and GLF Construction is contractually bound to stay this litigation pending the com pletion of the applicable dispute resolution procedures. See United States v. Bhate Envtl. Assocs., Inc., No. 15-146, 20 16 WL 54440 6, at *3 (D. Alaska Feb. 9, 20 16) (in contractor-subcontractor breach of contract Miller Act dispute, finding it “entirely plausible that som e, if not all, of the im pacts alleged by [plaintiff] were the result of actions taken by the [Government]”). This finding is buttressed by other court decisions staying sim ilar Miller Act proceedings based on either sim ilar or identical language covering stays in the subcontract. For example, in United States v. David Boland, 22 R. Doc. 19-1 at 1 ¶ 2; Id. at 2-4 ¶¶ 5-12. Id. at 32 (Letter from USACE acknowledging drawing discrepancies). 24 R. Doc. 24-1. 7 23 Inc., Target Construction, a subcontractor, sued David Boland, Inc. under the Miller Act, as well as for breach of contract. Boland and the surety moved to stay the case based the language in its subcontract with Target, language identical to the subcontract at issue here. No. 11-2813, 20 14 WL 345293, at *1-2 (E.D. La. J an. 30 , 20 14). Relying on the language in Paragraph 13A and 23 of the subcontract, the court stayed the m atter because “these provisions are clear and unambiguous and m ust be enforced.” Id. at 2. Other courts stayed Miller Act claim s in sim ilar situations with sim ilar contract language at issue. See, e.g, Gabriel Fuentes Jr. Const. Co. v. Carter Concrete Structures, Inc., No. 14-1473, 20 14 WL 70 46519, at *5-7 (D.P.R. Dec. 12, 20 14) (granting stay of Miller Act proceedings between general contractor and subcontractor based on stay provision in subcontract); Bhate Envtl., 20 16 WL 54440 6, at *3 (sam e); see also United States v. Balfour-W alton, No. 16-2484, 20 16 WL 7229269, at *2-4 (D. Kan. Dec. 14, 20 16) (vacating Magistrate J udge’s order denying request for stay in contractor-subcontract Miller Act dispute because Magistrate J udge did not properly consider language in subcontract when deciding if stay was appropriate). Further, the Court finds that judicial econom y will be served, and that parties will not be unduly prejudiced, by a stay. In terms of judicial econom y, the use of the contract dispute resolution procedure m ay resolve all or part 8 of the dispute, m aking further proceedings lim ited or unnecessary. See Bhate Envtl., 20 16 WL 54440 6, at *4 (finding that stay is supported by judicial economy). In terms of prejudice, while com pletion of the dispute resolution procedure will undoubtedly delay this m atter, the delay was a reasonably foreseeable event given the language of the subcontract, and it does not rise to a level sufficient to deny the stay. See id.; Gabriel Fuentes, 20 14 WL 70 46519, at *6 (rejecting argument of prejudice based on delay). Further, if the dispute resolution procedure does not resolve GLF Construction’s claim s, its Miller Act claim s will not be barred or waived. See, e.g., United States, for & on behalf of Portland Const. Co. v. W eiss Pollution Control Corp., 532 F.2d 10 0 9, 10 12 (5th Cir. 1976); United States v. Dick/ Morganti, No. 0 72564, 20 0 7 WL 3231717, at *3-4 (N.D. Cal. Oct. 30 , 20 0 7) (noting that stay pending contractual dispute resolution procedure will not waive subcontractors’ right to bring subsequent Miller Act claim ). Based on the language in the subcontract and the above caselaw, the Court grants defendants’ m otion to stay the proceedings pending the com pletion of the dispute resolution procedure in Paragraph 13A. 9 III. CON CLU SION For the foregoing reasons, defendants’ m otion to stay is GRANTED pending the com pletion of the contractual dispute resolution procedure. This m atter is adm inistratively closed pending the stay. New Orleans, Louisiana, this _ 7th _ _ day of March, 20 17. __ _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 10
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