Glenn-Colusa Irrigation District v. United States Army Corps of Engineers et al

Filing 20

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 6/27/2017 DENYING 13 Defendants' Motion for Partial Dismissal. (Kirksey Smith, K)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 13 GLENN-COLUSA IRRIGATION DISTRICT, CIV. NO. 2:17-0120 WBS GGH MEMORANDUM AND ORDER RE: MOTION FOR PARTIAL DISMISSAL Plaintiff, 14 15 16 17 18 19 20 21 v. UNITED STATES ARMY CORPS OF ENGINEERS; ASSISTANT SECRETARY OF THE ARMY FOR CIVIL WORKS JO-ELLEN DARCY, in her official capacity; LIEUTENANT GENERAL TODD SEMONITE, in his official capacity; and COLONEL DAVID RAY, in his official capacity; Defendants. 22 23 24 ----oo0oo---Plaintiff Glenn-Colusa Irrigation District brought this 25 action against defendants the United States Army Corps of 26 Engineers (“USACE”), Assistant Secretary of the Army for Civil 27 Works Jo-Ellen Darcy, Lieutenant General Todd Semonite, and 28 1 1 Colonel David Ray, alleging that the USACE1 breached a 2 construction contract it and the USACE had entered into by 3 failing to construct an irrigation facility according to the 4 contract’s specifications. 5 court is defendants’ Motion to dismiss three of the five claims 6 alleged in this action as untimely under the limitations period 7 set forth in 28 U.S.C. § 2401(a). 8 I. (Compl. (Docket No. 1).) Before the (Defs.’ Mot. (Docket No. 13).) Factual and Procedural Background 9 Plaintiff is a state government entity that oversees 10 farming irrigation in Glenn and Colusa counties in California. 11 (See Compl. ¶ 14.) 12 States Army that builds and maintains infrastructure in the 13 United States. 14 (last visited June 19, 2017).) 15 The individual defendants are Army personnel who are involved in 16 overseeing USACE operations. 17 The USACE is a subdivision of the United (See id. ¶ 17; US Army Corps of Engineers, (See Compl. ¶¶ 18-20.) In 1999, plaintiff and the USACE entered into a Project 18 Cooperation Agreement (“PCA”) whereby the two parties agreed to 19 co-fund the construction of an irrigation gradient facility 20 (“gradient facility”) designed to improve the performance of a 21 fish screen plaintiff had implemented at its irrigation pump 22 plant. 23 would be responsible for constructing the gradient facility and, 24 upon completion of the facility, issue a written notice of 25 construction completion to plaintiff, at which time plaintiff 26 27 28 1 (See id. ¶¶ 39, 50.) The PCA provides that the USACE Plaintiff alleges that the individual defendants in this action are “responsib[le], in whole or in part, for the [USACE’s] acts” with respect to this action. (Compl. ¶¶ 18-20 (Docket No. 1).) 2 1 would become responsible for “maintain[ing], repair[ing], 2 replac[ing], and rehabilitat[ing]” the facility. 3 Ex. A, Project Cooperation Agreement (“PCA”) at 5.) 4 (Id. ¶ 55; id. Plaintiff alleges that the USACE “began construction of 5 the Gradient Facility in May 2000 and completed construction in 6 November 2000.” 7 (Compl. ¶ 68.) “Almost immediately after construction was completed,” 8 plaintiff alleges, “significant defects associated with the 9 Gradient Facility were observed.” (Id. ¶ 69.) Such defects 10 allegedly resulted from the USACE’s failure to build certain 11 parts of the gradient facility according to the PCA’s 12 specifications. 13 the defects to the USACE in December 2000. 14 (See id. ¶¶ 127, 129, 133.) Plaintiff reported (Id. ¶ 71.) From 2001 to 2003, the USACE took “limited action[s]” 15 to remedy the gradient facility’s defects. 16 From 2004 to 2007, no work was done on the defects. 17 78, 83, 89-90.) 18 (See id. ¶¶ 72-78.) (See id. ¶¶ “[I]n August 2008, the USACE convened a team of experts 19 to review the Gradient Facility.” 20 allegedly “identified significant areas of concern[]” with the 21 facility stemming from the defects plaintiff had complained about 22 beginning in December 2000. 23 four and a half years, plaintiff and the USACE engaged in a 24 number of unsuccessful efforts to “develop solutions to the 25 Gradient Facility’s myriad of issues.” 26 (Id. ¶¶ 93-94.) (See id. ¶¶ 71, 96.) The experts Over the next (See id. ¶¶ 97-104.) In March 2013, the USACE issued notice of construction 27 completion for the gradient facility to plaintiff, notifying 28 plaintiff that it considered the facility complete for purposes 3 1 of the PCA and plaintiff would be responsible for maintaining, 2 repairing, replacing, and rehabilitating the facility going 3 forward. 4 (See id. ¶ 105-106.) Plaintiff thereafter brought an action against the 5 United States in the Court of Federal Claims, alleging that the 6 United States breached the PCA by failing to construct the 7 gradient facility according to the PCA’s specifications. 8 Glenn-Colusa Irrigation Dist. v. United States, 129 Fed. Cl. 593, 9 595 (2016). 10 See The Court of Federal Claims dismissed that action for lack of jurisdiction. Id. at 599. In January 2017, plaintiff filed this action.2 11 12 (Compl.) Citing the same allegations it cited in its Court of 13 Federal Claims action, plaintiff brings causes of action against 14 defendants for: (1) breach of contract, (2) breach of the implied 15 covenant of good faith and fair dealing, (3) breach of implied 16 warranty, (4) declaratory judgment, and (5) violation of the 17 Administrative Procedure Act. 18 move, pursuant to Federal Rule of Civil Procedure 12(b)(6), to 19 dismiss plaintiff’s breach of contract, breach of the implied 20 covenant of good faith and fair dealing, and breach of implied 21 warranty claims as untimely under the limitations period set 22 forth in 28 U.S.C. § 2401(a). 23 /// (Id. at 20-26.) Defendants now (Defs.’ Mot.) 24 2 25 26 27 28 The PCA was entered into pursuant to the Flood Control Act, 42 U.S.C. § 1962d-5b. (See Compl. ¶ 7; Defs.’ Mot., Mem. at 6 (Docket No. 13-1).) This court thus has jurisdiction over this action under 42 U.S.C. § 1962d-5b(c). See 42 U.S.C. § 1962d5b(c) (“Every agreement entered into pursuant to this section shall be enforceable in the appropriate district court of the United States.”). 4 1 II. Legal Standard 2 On a Rule 12(b)(6) motion, the inquiry before the court 3 is whether, accepting the allegations in the complaint as true 4 and drawing all reasonable inferences in the plaintiff’s favor, 5 the plaintiff has stated a claim to relief that is plausible on 6 its face. 7 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 8 tenet that a court must accept as true all of the allegations 9 contained in a complaint is inapplicable to legal conclusions.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); “[T]he 10 Iqbal, 556 U.S. at 67. 11 12(b)(6) on the ground that it is barred by the applicable 12 statute of limitations . . . .” 13 of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010). 14 III. Discussion 15 “A claim may be dismissed under Rule Von Saher v. Norton Simon Museum 28 U.S.C. § 2401(a) sets forth a six-year limitations 16 period for “every civil action commenced against the United 17 States.” 18 the plaintiff is aware of the wrong and can successfully bring a 19 cause of action.” 20 F.2d 1362, 1364 (9th Cir. 1990) (quoting Acri v. International 21 Ass’n of Machinists, 781 F.2d 1393, 1396 (9th Cir. 1986)); see 22 also Padres Hacia Una Vida Mejor v. Jackson, No. 1:11-CV-1094 AWI 23 DLB, 2012 WL 1158753, at *5 (E.D. Cal. Apr. 6, 2012) (same). 24 federal law governs the three claims defendants are moving to 25 dismiss, see Boyle v. United Techs. Corp., 487 U.S. 500, 504 26 (1988) (“We have held that [the] obligations to and rights of the 27 United States under its contracts are governed exclusively by 28 federal law.”), and the parties appear to agree that plaintiff’s “Under federal law[,] a cause of action accrues when Shiny Rock Min. Corp. v. United States, 906 5 As 1 implied covenant of good faith and fair dealing and implied 2 warranty claims accrued at the same time plaintiff’s breach of 3 contract claim accrued,3 the dispositive question with respect to 4 the present Motion is whether plaintiff became aware of and could 5 have brought its breach of contract claim prior to January 2011. 6 Plaintiff contends that it could not have brought its 7 breach of contract claim prior to January 2011 because the USACE 8 did not breach the PCA’s construction specifications until it 9 issued notice of construction completion for the gradient 10 facility in March 2013. 11 Defendants contend that plaintiff could have brought its breach 12 of contract claim as early as November 2000, when, according to 13 plaintiff’s own allegation, “construction [on the gradient 14 facility] was completed [and] significant defects associated with 15 the . . . Facility were observed,” and no later than 2004, when 16 the USACE represented to plaintiff that “it did not have 17 sufficient funds” to “continue [remedial] work” on the facility 18 and plaintiff “would have to pay for a portion of the costs” of 19 such work. 20 77) (Docket No. 13-1).) 21 (See Pl.’s Opp’n at 9 (Docket No. 17).) (Defs.’ Mot., Mem. at 7-8 (citing Compl. ¶¶ 68-69, Relevant to the court’s analysis of when plaintiff 22 could have brought its breach of contract claim is what 23 constitutes a breach of contract under federal law. 24 contract law is determined by reference to traditional common law 25 principles.” 26 27 28 3 “Federal Minidoka Irr. Dist. v. Dep’t of Interior of U.S., The parties discuss the three claims collectively and argue only the accrual date of plaintiff’s breach of contract claim in their briefs. (See Defs.’ Mot., Mem. at 7-9; Pl.’s Opp’n at 8-12 (Docket No. 17).) 6 1 154 F.3d 924, 926 (9th Cir. 1998). 2 common law principles” is “the content of the forum state’s law.” 3 Seagate Tech. LLC v. Dalian China Express Int’l Corp., 169 F. 4 Supp. 2d 1146, 1154 (N.D. Cal. 2001) (citing 19 Charles A. 5 Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and 6 Procedure, § 4518). 7 may be breached by nonperformance, by repudiation, or a 8 combination of the two.” 9 Cal. App. 4th 501, 514 (5th Dist. 2008) (citing 1 Witkin, Summary One source of “traditional “California law recognizes that a contract Cent. Valley Gen. Hosp. v. Smith, 162 10 10th Contracts § 849). Nonperformance is “an unjustified failure 11 to perform a material contractual obligation when performance is 12 due.” 13 Repudiation is “a clear, positive, and unequivocal refusal to 14 perform” a contractual obligation or “conduct . . . so as to make 15 substantial performance [of the obligation] . . . impossible.” 16 Taylor v. Johnston, 15 Cal. 3d 130, 137 (1975). Id. (citing Restatement (Second) of Contracts § 251). 17 The facts alleged in plaintiff’s Complaint do not 18 indicate that the USACE failed to perform or repudiated its 19 alleged obligation to construct the gradient facility according 20 to the PCA’s specifications prior to January 2011. 21 As to performance, the PCA does not provide a timetable 22 for completing the gradient facility, instead providing that when 23 the USACE “determines that the entire [facility] is complete . . 24 . [it] shall so notify [plaintiff] in writing.” 25 USACE did not issue notice of construction completion for the 26 gradient facility until March 2013, (Compl. ¶ 105), indicating 27 that the time for performing on the PCA’s construction 28 specifications did not expire until March 2013. 7 (PCA at 5.) It cannot be The 1 said that the USACE failed perform on the PCA’s construction 2 specifications prior to June 2011 when, under the terms of the 3 PCA, the time for such performance did not expire until March 4 2013.4 5 As to repudiation, the only allegation the court is 6 aware of that could conceivably be construed as “a clear, 7 positive, and unequivocal refusal” by the USACE to perform on the 8 PCA’s construction specifications prior to January 2011, is the 9 allegation that in 2004, the USACE represented to plaintiff that 10 “it did not have sufficient funds” to “continue [remedial] work” 11 on the gradient facility and plaintiff “would have to pay for a 12 portion of the costs” of such work. 13 Compl. ¶ 77) (Docket No. 18).) 14 (Defs.’ Reply at 5-6 (citing It is not clear, from the face of this allegation, that 15 the USACE’s representations to plaintiff in 2004 constituted a 16 refusal on the USACE’s part to perform further remedial work on 17 the gradient facility absent unwarranted financial contributions 18 from plaintiff. 19 Complaint, however, indicate that the representations were not a 20 refusal to perform further work in the absence of financial 21 contributions. 22 the USACE allegedly “convened a team of experts to review the 23 Gradient Facility” and thereafter “accepted responsibility for 24 correcting the [facility’s] deficiencies” and “develop[ed] an 25 26 27 28 4 Other allegations stated in plaintiff’s Four years after the representations were made, The court acknowledges that it is somewhat confusing that plaintiff states the gradient facility was “completed . . . in November 2000.” (Compl. ¶ 68.) Plaintiff explained at oral argument that that by “completed,” it merely meant that initial construction efforts on the gradient facility were finished, not that the USACE had completed performance on the PCA. 8 1 action plan to address the [facility’s] outstanding 2 issues/deficiencies.” 3 indications that the USACE’s rekindled willingness to perform 4 remedial work on the gradient facility was due to financial 5 contributions from plaintiff. 6 are thus inconsistent with, and undermine, the theory that the 7 USACE’s representations to plaintiff in 2004 were “a clear, 8 positive, and unequivocal refusal” to perform further remedial 9 work on the gradient facility in the absence of unwarranted 10 11 (Compl. ¶¶ 93, 98.) There are no The USACE’s post-2008 activities financial contributions from plaintiff. There are no allegations in plaintiff’s Complaint that 12 the USACE engaged in any “conduct . . . so as to make substantial 13 performance” of the PCA’s construction specifications 14 “impossible” prior to January 2011. 15 Thus, the facts alleged in plaintiff’s Complaint do not 16 indicate that the USACE repudiated its alleged obligation to 17 construct the gradient facility according to the PCA’s 18 specifications prior to January 2011. 19 Having found that the facts alleged in plaintiff’s 20 Complaint do not indicate that the USACE failed to perform or 21 repudiated its alleged obligation to construct the gradient 22 facility according to the PCA’s specifications prior to January 23 2011, the court finds that such facts do not indicate that 24 plaintiff could have brought its breach of contract, breach of 25 the implied covenant of good faith and fair dealing, and breach 26 of implied warranty claims prior to January 2011. 27 28 IT IS THEREFORE ORDERED that defendants’ motion for partial dismissal of plaintiff’s Complaint be, and the same 9 1 hereby is, DENIED. 2 Dated: June 27, 2017 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10

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