GLF Construction Corporation v. FEDCON Joint Venture et al

Filing 34

ORDER AND REASONS denying #26 Motion for Reconsideration. Signed by Judge Sarah S. Vance on 6/20/2017. (cg)

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. 16-13022

FEDCON JOINT VENTURE, ET AL.

SECTION “R” (4)

ORDER AND REASONS
GLF Construction Corporation moves the Court to reconsider its order1
staying this case pending the completion of contractual dispute resolution
procedures.2

For the following reasons, GLF Construction’s motion is

denied.

I.

BACKGROUND
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 JT
Construction.3 On or about October 18, 2013, FEDCON was awarded a

1
2
3

R. Doc. 25.
R. Doc. 26.
R. Doc. 1 at 1-3 ¶¶ 2, 9.

contract (the Prime Contract) to perform all work on the “Resilient Features”
project.4 The contract called for repair and raising of substandard levees
along a section of the Mississippi River in Plaquemines Parish, Louisiana.5
As required by the Prime 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.6
On or about January 22, 2014, FEDCON entered into a subcontract
with GLF Construction to furnish labor, materials, and services on the
project and complete a portion of FEDCON’s scope of work under the Prime
Contract for the agreed price of $10,517,859.50.7 In May of 2016, FEDCON
terminated the subcontract with GLF Construction.8
On July 20, 2016, GLF Construction filed this Miller Act lawsuit
alleging that FEDCON breached its subcontract with GLF Construction.9
GLF Construction sought payment under the Miller Act Bond, and also
brought claims for breach of contract and unjust enrichment.10 On October
19, 2016, the defendants filed a motion to stay, arguing that GLF

4
5
6
7
8
9
10

Id.
Id.
Id. ¶ 10; R. Doc. 1-1 at 1 (Miller Act Payment Bond).
R. Doc. 1 at 3-4 ¶ 11.
Id. at 11 ¶ 35.
Id. at 12 ¶ 37.
Id. at 12-16.
2

Construction is bound by the terms of the subcontract with FEDCON to stay
any litigation until the completion of the dispute resolution procedures
contained in the subcontract.11
On March 7, 2017, the Court stayed the case, finding that the
subcontract between the parties contractually bound GLF Construction to
stay the litigation pending the completion of the applicable dispute
resolution procedures.12 The Court’s order administratively closed the case
pending the stay.13 GLF Construction now moves the Court to reconsider its
order under Federal Rule of Civil Procedure 59(e), arguing both that the
Court committed manifest error and that failure to lift the stay will result in
manifest injustice.14 FEDCON filed a response in opposition,15 and GLF
Construction replied.16

II.

LEGAL STANDARD
A district court has considerable discretion to grant or deny a motion

under Rule 59(e). See Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 355

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12
13
14
15
16

R. Doc. 8-1 at 1-2.
R. Doc. 25 at 6-7.
Id. at 10.
R. Doc. 26 at 2-4.
R. Doc. 29.
R. Doc. 32.
3

(5th Cir. 1993). Reconsideration of an earlier order is an extraordinary
remedy, which should be granted sparingly. See Fields v. Pool Offshore, Inc.,
1998 WL 43217, *2 (E.D. La. Mar. 19, 1998); Bardwell v. George G. Sharp,
Inc., 1995 WL 517120, *1 (E.D. La. Aug. 30, 1995). The Court must “strike
the proper balance between the need for finality and the need to render a just
decision on the basis of all the facts.” Edward H. Bohlin Co., 6 F.3d at 355.
A moving party must satisfy at least one of the following criteria to prevail on
a Rule 59(e) motion: (1) the motion is necessary to correct a manifest error
of fact or law; (2) the movant presents newly discovered or previously
unavailable evidence; (3) the motion is necessary in order to prevent
manifest injustice; and (4) the motion is justified by an intervening change
in the controlling law. See Fidelity & Deposit Co. of Md. v. Omni Bank, 1999
WL 970526, *3 (E.D. La. Oct. 21, 1999); Fields, 1998 WL 43217 at *2; see also
Compass Tech., Inc. v. Tseng Labs., Inc., 71 F.3d 1125, 1130 (3d Cir. 1995)
(“Rule 59 and Rule 60(b)(2) share the same standard for granting relief on
the basis of newly discovered evidence.”).

III. DISCUSSION
GLF Construction does not base this motion on newly discovered or
previously unavailable evidence, nor does it argue that reconsideration is
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justified by an intervening change in the controlling law. Instead, it argues
that the Court committed manifest error because its order staying the entire
litigation, instead of only specific claims, was based on an erroneous
interpretation of the subcontract between FEDCON and GLF Construction.17
Additionally, GLF Construction argues that failure to lift the stay will subject
GLF Construction to manifest injustice.18

The Court addresses each

argument in turn.
A.

The Stay of the Entire Litigation Was Not Manifest
Error

GLF Construction argues that the Court manifestly erred by
interpreting paragraphs 13 and 23 of the subcontract between itself and
FEDCON to require a stay of the entire litigation instead of only certain
claims. GLF Construction’s argument is unavailing. As explained in the
Court’s previous order, paragraph 23 of the subcontract states:
If the Prime Contract incorporated herein is one for which the
Contractor has provided any bond(s) pursuant to 40 U.S.C. §
270a, 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 Performance Bond pending the
complete and final resolution of the Prime Contractor’s
contractual remedial procedure or the Subcontract Agreement’s
mediation procedure, as required by Paragraph 13, above.19
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18
19

R. Doc. 26-3 at 3-7.
Id. at 7-9.
R. Doc. 1-2 at 10 ¶ 23.
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Paragraph 13A, in turn, reads:
The contractual remedial procedure . . . relating to claims for
which [USACE] may be responsible is specifically incorporated
herein by reference and made a part of this Subcontract
Agreement. The term “claim” as utilized in this paragraph shall
include any request for monetary or other relief, claim, appeal,
or action arising from the subcontractor for which [USACE] has,
or may have, responsibility. The Subcontractor shall first pursue
and fully exhaust said procedure before commencing any other
action against the Contractor or its surety for any claims it may
have arising out of its performance of the Work herein. Upon the
Subcontractor’s written request, the Contractor agrees to
prosecute all claims submitted by the Subcontractor under the
contractual remedial procedure of the Prime Contract on behalf
of, and to the extent required by, the Subcontractor. . . . Final
determination 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.20
GLF Construction makes the same argument it made in opposition to
the stay: that GLF Construction’s breach of contract claim is not covered by
the provision and therefore should not be stayed. This argument fails for the
same reasons the Court rejected it previously. A plain reading of the text of
the applicable provisions indicates that they apply to all of GLF
Construction’s claims. “Responsibility” is not qualified in the contract and

20

Id. at 7 ¶ 13.
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there is no threshold; if USACE is even 1 percent responsible for the claim,
then the provision applies.
As explained in its previous order, GLF Construction’s breach of
contract claim against FEDCON arises in part out of FEDCON’s alleged
failure to construct a temporary access road and two temporary work
platforms.21 But defendants have submitted an April 7, 2016 letter from
USACE to FEDCON in which USACE acknowledges its responsibility for at
least some of the conditions that led to FEDCON’s alleged breach of
contract.22 Therefore, given the “intertwined” relationship between USACE’s
conduct and the breach of contract claim between GLF Construction and
FEDCON, GLF Construction’s breach of contract claim is a claim that USACE
may have responsibility for, and GLF Construction’s lawsuit bringing the
breach of contract claim is an action that USACE may have responsibility
for.23 See United States v. Bhate Envtl. Assocs., Inc., No. 15-146, 2016 WL
544406, at *3 (D. Alaska Feb. 9, 2016) (“Suffice to say that there is an
intertwined relationship between the Owner-related claims and those that

R. Doc. 1 at 6-7 ¶¶ 19-24.
R. Doc. 19-1 at 32.
23
The same is true for any breach of contract claim based on
FEDCON’s termination of the subcontract.
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21

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rest solely between the parties.”).

Accordingly, the language of the

subcontract agreement requires the stay.
Further, regardless of whether the term “claim” in paragraph 13 covers
all of GLF Construction’s claims against FEDCON, GLF Construction’s
argument ignores the text of paragraph 23. Unlike paragraph 13, paragraph
23 not only refers to “claims” but also states “the Subcontractor expressly
agrees to stay any action or claim . . . .”24

If GLF Construction’s

interpretation was correct, then the contract’s inclusion of the words “any
action” would be superfluous.
Additionally, even if the Court incorrectly interpreted the contract and
should have not have found the agreement to require staying the entire
litigation—a proposition for which GLF Construction offers no support other
than its own self-serving interpretation—the Court would still be well within
its discretion to stay the entire litigation. 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, 706 (1997), and the Court should consider
judicial economy in deciding whether to stay a case, see Landis v. N. Am. Co.,
299 U.S. 248, 254 (1936). As mentioned in its previous order, the contract
dispute resolution procedure may resolve all or part of this dispute, making

24

R. Doc. 1-2 at 10 ¶ 23 (emphasis added).
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further proceedings limited or unnecessary. Therefore, judicial economy
supports staying the entire litigation. See Bhate, 2016 WL 544406, at *4
(finding that allowing some claims to proceed while others are stayed would
create parallel proceedings, which would not only be inefficient but also
contrary to judicial economy).
Finally, GLF Construction takes issue with the cases cited by the Court
in its previous order, noting that these cases either had slightly different facts
or different contractual language, and that they are “not controlling.”25 Of
course, GLF Construction is aware that courts often rely on non-precedential
cases to support their findings, and that cases (and their facts) need not be
identical to be helpful. Further, the Court did not state that it was bound by
any of these cases, or that the cases were identical to the dispute at hand.
Instead, the Court merely did what the federal judiciary does on a daily basis,
it used well-reasoned cases that dealt with similar situations as a guide. GLF
Construction has pointed to nothing indicating that the Court’s citation of
these cases was erroneous, much less manifestly so. See Guy v. Crown
Equipment Corp., 394 F.3d 320, 325 (5th Cir. 2004) (defining “manifest
error” as one that “is plain and indisputable, and that amounts to a complete
disregard of controlling law”) (internal quotation and citation omitted).

25

R. Doc. 26-3 at 5-7.
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B.

The Court’s Previous Order Will Not Result in Manifest
Injustice

Initially, GLF Construction argued that failure to lift the stay will result
in manifest injustice.26 At the time GLF Construction filed this motion,
FEDCON had recently asked a Florida state court to reconsider its previous
order dismissing FEDCON’s claims against GLF Construction on forum non
conveniens grounds.27 According to GLF Construction, if FEDCON could
pursue claims against GLF Construction in another proceeding without GLF
Construction asserting counterclaims because of the stay, manifest injustice
would occur.
On April 4, 2017, the Circuit Court for the Ninth Judicial District in
Orange County, Florida declined to reconsider its previous order and
finalized the dismissal of FEDCON’s suit.28 Further, FEDCON indicates to
the Court that it intends to abide by the outcome of the dispute resolution
procedures before filing any counterclaims against GLF Construction.29
Therefore, the Court need not address GLF Construction’s manifest injustice
argument because it is now moot.30 As such, GLF Construction has suffered

Id. at 8.
R. Doc. 26-2 at 1.
28
R. Doc. 29-1 at 1.
29
R. Doc. 29 at 4.
30
In GLF Construction’s reply, it acknowledges these recent events
and states that it “concedes its Motion.” R. Doc. 32 at 2. But GLF
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no injustice, and any potential future injustice is hypothetical, and certainly
does not rise to the level necessary for the Court to reconsider its order.
Because GLF Construction fails to show that the Court’s previous order
staying this case was manifestly erroneous or that GLF Construction will
suffer manifest injustice, its motion to reconsider must be denied.

IV.

CONCLUSION
For the foregoing reasons, GLF Construction’s motion to reconsider is

DENIED.

20th
New Orleans, Louisiana, this _____ day of June, 2017.
_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

Construction’s motion not only argued that it faced manifest injustice, but
also that the Court manifestly erred. See R. Doc. 26-3 at 3-7.
GLF
Construction’s reply does not address its manifest error argument, and
therefore the Court will not treat GLF Construction’s “concession” as a
barrier to resolving this motion in its entirety.
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