New Millenium Building Systems LLC v. PAUL S AKINS COMPANY INC et al
Filing
12
ORDER granting 9 Motion to Dismiss. Ordered by Judge Clay D. Land on 09/13/2012.(jcs)
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
fees.
B,
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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