Nowak Construction Co., Inc. v. Liberty Mutual Insurance Company
Filing
11
MEMORANDUM AND ORDER: 6 Motion to Dismiss for Failure to State a Claim. Liberty's, motion to dismiss shall be granted. The court shall dismiss (doc # 6) Nowak's claim for attorneys fees in Count Two of the complaint with out Prejudice. Signed by District Judge Richard D. Rogers on 11/13/2013.Mailed to pro se party by regular mail (meh)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
UNITED STATES OF AMERICA,
FOR THE USE OF NOWAK CONSTRUCTION
COMPANY,
Plaintiff,
v.
LIBERTY MUTUAL INSURANCE CO.,
Defendant.
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Case No. 13-1296-RDR
MEMORANDUM AND ORDER
This action is titled a “Miller Act Complaint.”
It is
brought by the United States by and for the use of plaintiff
Nowak Construction Company, Inc. (“Nowak”).
Defendant is the
Liberty Mutual Insurance Company (“Liberty”).
counts to the complaint.
There are two
The first count is a Miller Act claim.
See 40 U.S.C. § 3131 et seq.
It alleges that Nowak was a
subcontractor on a contract awarded by the U.S. Army Corps of
Engineers for improvements and upgrades at Marion Reservoir at
Marion,
Kansas.
It
further
alleges
that
plaintiff
provided
labor and materials for the project but was not paid by the
contractor.
It is asserted additionally that Liberty issued a
payment bond for the protection of plaintiff and that Liberty
has been notified of Nowak’s claim.
The second count of the
complaint alleges that Liberty is an “insurance company” for the
purposes of K.S.A. 40-256 and that Liberty has refused without
just cause or excuse to pay Nowak’s claim.
On this basis, Nowak
alleges that it is entitled to an award of attorneys’ fees under
K.S.A. 40-256.
This case is now before the court upon Liberty’s
motion to dismiss the second count of the complaint.
Doc. No.
6.
K.S.A. 40-256 provides as follows:
That in all actions hereafter commenced, in which
judgment is rendered against any insurance company . .
. , if it appear from the evidence that such company .
. . has refused without just cause or excuse to pay
the full amount of such loss, the court in rendering
such judgment shall allow the plaintiff a reasonable
sum as an attorney’s fee for services in such action,
including proceeding upon appeal, to be recovered and
collected as a part of the costs: Provided, however,
That when a tender is made by such insurance company .
. . before the commencement of the action in which
judgment is rendered and the amount recovered is not
in excess of such tender no such costs shall be
allowed.
(emphasis added).
Liberty argues that this is a Miller Act case and that the
Supreme Court held in F.D. Rich Co., Inc. v. U.S. for Use of
Indus. Lumber Co., 417 U.S. 116, 127 (1974)(“Rich”) that the
Miller Act does not provide for an award of attorneys’ fees for
successful
litigants.
holding in Rich.
for
attorneys’
bringing
attorneys’
an
Nowak
not
dispute
the
described
Nowak argues, however, that it is not asking
fees
under
independent
fees
does
under
the
Miller
supplemental
K.S.A.
40-256.
2
Act,
but
instead
is
state
law
claim
for
Liberty
replies
that
K.S.A.
40-256
does
not
permit
an
“independent”
claim
for
attorneys’ fees because the language of the statute requires an
action against an insurance company on a policy of insurance.
Liberty asserts that when the policy in question is a payment
bond and a claim is brought under the Miller Act, the provisions
of the Miller Act control the relief available.
Liberty’s position, that there can be no supplemental state
claim
for
attorneys’
fees
under
K.S.A.
40-256
without
an
independent state cause of action on a policy of insurance, is
attractive to the court.
This was the holding in an analogous
case, U.S., For the Use of General Elec. Supply Co. v. Minority
Electric Co., 537 F.Supp. 1018, 1021 (D.Ga. 1982).
There, the
court refused to permit an amendment to a Miller Act complaint
which sought to add a claim for attorneys’ fees under a Georgia
statute which allowed for a recovery of attorneys’ fees and a
penalty as part of a judgment in litigation alleging bad faith
refusal to pay under a surety contract.
One of the arguments
made for the amendment was that it was a separate state law
claim made pursuant to pendent jurisdiction.
The court rejected
the argument stating:
[P]endent
jurisdiction
necessarily
involves
two
claims:
a federal claim and a state claim.
In this
case, however, plaintiff has brought only one cause of
action, the Miller Act suit. There is no reference in
the complaint to any state cause of action over which
pendent jurisdiction can be exercised.
3
Id.
This
holding
was
followed
years
later
in
U.S.
v.
All
American Bldg. Systems, Inc., 857 F.Supp. 69 (N.D.Ga. 1994).
The court also sees a parallel with claims for attorneys’
fees under 42 U.S.C. § 1988(b) which allows for the recovery of
fees, “as part of the costs,” “in any action or proceeding” to
enforce the provisions of various civil rights statutes.
It is
commonly stated that § 1988 does not create a separate cause of
action.
See, e.g., North Carolina Dep’t of Transp. v. Crest St.
Comty. Council, Inc., 479 U.S. 6, 12 (1986)(Ҥ 1988 does not
authorize a court to award attorney’s fees except in an action
to enforce the listed civil rights laws”); Maxineau v. City of
New York, 2013 WL 3093912 *3 (E.D.N.Y. 6/18/2013)(Ҥ 1988 does
not
establish
a
separate
cause
of
action
.
.
.
but
merely
provides a means for a prevailing party to recover reasonable
attorney’s fees in a § 1983 action”); Rodriguez v. Ohio Bureau
of
Criminal
Investigation,
2013
WL
708034
*1
n.1
(S.D.Ohio
2/25/2013)(Ҥ 1988 does not create a separate substantive cause
of
action”);
347692
*2
Gordon
n.12
v.
(D.Kan.
City
of
Hoisington,
2/7/2008)(Ҥ
separate cause of action”).
1988
Kansas,
does
not
2008
create
WL
a
In Crest St., the Court held that
it did not matter that in prior litigation a court might have
been able to award attorneys’ fees.
The controlling fact was
that
the
in
the
case
before
the
Court
4
plaintiff
brought
a
completely independent action for attorney’s fees which was not
authorized under § 1988.
But, the court shall not dismiss Nowak’s claim under K.S.A.
40-256 on substantive grounds.
to
dismiss
concerns
a
The issue raised by the motion
question
of
state
law
interpretation
which, from the parties’ briefs and the court’s own research,
appears novel.
Therefore, the court shall employ its discretion
under 28 U.S.C. § 1367(c)(1) to decline to exercise supplemental
jurisdiction over Count Two of the complaint.
In conclusion, Liberty’s motion to dismiss (Doc. No. 6)
shall be granted.
The court shall dismiss Nowak’s claim for
attorneys’ fees in Count Two of the complaint without prejudice.
IT IS SO ORDERED.
Dated this_13th _ day of November, 2013, at Topeka, Kansas.
sRichard D. Rogers
Richard D. Rogers
United States District Judge
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