Dunn Construction L L C v. Gray Insurance Company et al

Filing 34

MEMORANDUM RULING re 11 MOTION for Summary Judgment filed by Gray Insurance Co. Signed by Magistrate Judge C Michael Hill on 1/13/10. (crt,Roaix, G)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF LOUISIANA L A K E CHARLES DIVISION D U N N CONSTRUCTION, L.L.C. VS. G R A Y INSURANCE CO. * * * C I V I L ACTION NO. 08-1631c/w 1632 M A G I S T R A T E JUDGE HILL B Y CONSENT OF THE PARTIES

M E M O R A N D U M RULING P e n d in g before the Court is the Motion for Summary Judgment filed by defendant, G ra y Insurance Co. ("Gray"), on May 8, 2009. [rec. doc. 11]. Plaintiff, Dunn C o n s tru c tio n , L.L.C. ("Dunn"), filed opposition. [rec. doc. 14]. Gray filed a reply brief. [ re c . doc. 15]. Oral argument was held on January 6, 2010, after which the Court took the m o t io n under advisement. For the reasons set forth below, the motion is GRANTED. B a c k gro u n d D u n n brought this action under the Miller Act, 40 U.S.C. §§ 3131-3134. On S e p tem b e r 29, 2005, the United States Contracting Agency, Southern Region, Fort Polk D ire c to ra te of Contracting ("the USCA"), entered into a construction contract with G o v e rn m e n t Technical Services, L.L.C. ("GTS") in the amount of $1,500,00.00. The c o n tra c t called for the installation of standing seam metal roof systems on buildings 1160, 1 2 7 0 , and 1272 to be used for housing soldiers at the Fort Polk Army Base. On October 1 7 , 2005, Gray, as surety, issued a Miller Act payment bond on behalf of GTS in c o n n e c t io n with the installation of the roof systems on the buildings.

O n April 4, 2006, GTS subcontracted with Dunn to install the roofing systems on th e three buildings for the amount of $434,370.00. Eight Change Orders were issued d u rin g the course of the project. In a pay application submitted to GTS on February 26, 2 0 0 7 , Dunn certified that it had completed 99.08% of its work. [rec. doc. 11-8, Exhibit 3, B a te s stamped nos. 000085-000086]. The Payment History dated September 11, 2007, in d ic a te s that the last Change Order to complete the job was dated February 21, 2007. [rec. doc. 11-8, Exhibit 3, Bates stamped 000001]. This Change Order brought the total c o n tra c t price to $500,462.00. The Payment History shows the billing dates and p a ym e n ts made by GTS, and states that, after considering the change orders and payments m a d e to Dunn, the balance of $204,624.38 was then due. Ricky Carver ("Carver"), a Quality Assurance Specialist for the Mission In s ta lla tio n Contracting Command, Directorate of Contracting ("MICC") at Fort Polk, m a in ta in e d a Daily Quality Assurance Record of the progress of work completed by D u n n . On June 28, 2007, Carver delivered by e-mail to GTS and Dunn a "punch list" of d e f icie n c ies in the roofing system which required correction. He kept a Daily Quality A s s u ra n c e Record of these deficiencies on the three buildings from August 12, 2007 th r o u g h December 1, 2007. [rec. doc. 11-6, Affidavit of Ricky Carver, Exhibit 1]. These re c o rd s indicated that during that time, Dunn's employees were correcting "punch list" ite m s . None of Dunn's employees worked on the project after November 19, 2007.

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B y letter dated August 28, 2007, Dunn's attorney, Robert M. Davis, III ("Davis"), in f o rm e d Gray that Dunn intended to assert a claim on the bond. [rec. doc. 11, Affidavit o f Ivette Gualdron, Exhibit B-4]. In the letter, Davis stated that "[t]his project is 99 ½ to 1 0 0 % complete by Dunn, with only punch list type items to complete, if any work is re m a in in g ." Further, Davis stated that "DUNN completed the major part of its work in or a b o u t April or May, 2007." In a letter dated December 14, 2007 to Gray's counsel, R ich a rd E. Baudouin, Davis reiterated that the work was "99% to 100% complete, with o n ly punch list type items remaining to be completed," and that the balance owed was $ 2 0 4 ,6 2 4 .3 8 , which is the same amount included in the September 11, 2007, Payment H is to ry. [rec. doc. 11, Affidavit of Richard E. Baudouin, Exhibit G-3]. On October 30, 2008, Dunn filed suit against Gray and GTS under the Miller Act. G ra y filed the instant motion for summary judgment on May 8, 2009, on the basis that D u n n 's claim had prescribed. S u m m a r y Judgment Standard F e d .R .C iv .P r o c . Rule 56(c)(2) provides that summary judgment "should be re n d e re d if the pleadings, the discovery and disclosure materials on file, and any a f f id a v its show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.Proc. Rule 56(e)(2) provides, in p e r tin e n t part, as follows: W h e n a motion for summary judgment is properly made and supported, an o p p o s in g party may not rely merely on allegations or denials in its own 3

p lea d in g ; rather, its response must--by affidavits or as otherwise provided in th is rule--set out specific facts showing a genuine issue for trial. If the o p p o sin g party does not so respond, summary judgment should, if a p p ro p ria te , be entered against that party.

L im ita tio n s Analysis T h e Miller Act sets forth a time period under which a claim must be brought ag ains t a payment bond issued by a surety. Pursuant to 40 U.S.C. § 3133(b)(4): A n action brought under this subsection must be brought no later than one ye a r after the day on which the last of the labor was performed or material w a s supplied by the person bringing the action. The rights created by the Miller Act are federal in nature and scope, and federal law c o n tro ls the computation of the limitations period. U. S. For Use and Ben. of Harvey G u lf Intern. Marine, Inc. v. Maryland Cas. Co., 573 F.2d 245, 247 (5 th Cir. 1978). H e re , Gray asserts that Dunn had completed work prior to October 30, 2007, w h ic h would be one year before the date that Dunn filed suit. The record reflects that D u n n had completed the supplying of labor as early as February 26, 2007, and that the re m a in in g work constituted corrections or "punch list" items only. The last Change Order to complete the job was dated February 21, 2007. In the p a y application dated February 26, 2007, Dunn certified that it had completed 99.08% of its work. On June 28, 2007, Carver, the Quality Assurance Specialist, delivered to GTS a n d Dunn a "punch list"of deficiencies in the roofing system which required correction. T h e Daily Quality Assurance Records dated August 12, 2007 through November 19, 2007

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ind icated that the project had already been completed, and that Dunn's employees were c o rre c tin g "punch list" items only.1 In the Fifth Circuit, correction of errors has been held insufficient to extend the tim e for filing suit. General Ins. Co. of America v. U.S. for Use of Audley Moore and S o n , 406 F.2d 442, 443-444 (5 th Cir. 1969) (citing United States ex rel. Austin v. Western E le c tr ic Co.,337 F.2d 568 (9th Cir. 1964); United States ex rel. Circle-L-Electric Co. v. H y d e Construction Co., 255 F.Supp. 335 (N.D.Okla.1966); United States ex rel. M c G r e g o r Architectural Iron Co. v. Merritt-Chapman & Scott Corp., 185 F.Supp. 381 (M .D . Pa.1960)). On rehearing, the Fifth Circuit clarified its ruling in Audley Moore, s ta tin g that "[l]abor furnished in the prosecution of the work is not co-terminous with the o u te r limits of all duties provided by the contract." General Ins. Co. Of America v. U.S. fo r Use of Audley Moore, 409 F.2d 1326, 1327 (5 th Cir.), cert. denied, 396 U.S. 902, 90 S .C t. 214, 24 L.Ed.2d 178 (1969). The court considered the situation in Trinity Universal In s . Co. v. Girdner, 379 F.2d 317 (5 th Cir. 1967), in which the period of limitations was to lled where the inspector refused to approve the original work unless defective parts w e re replaced. However, the court stated that the situation in Trinity was "to be d is tin g u is h e d from the situation in which labor is supplied or material furnish to correct d e f ec ts after the work has been completed." Id.

At oral argument, counsel for Dunn confirmed what the court already knew, that is, that "punch list" items were those items left unfinished, or which needed repair, after the completion of the contract.

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H e re , Dunn's own documents show that Dunn had completed its work prior to O c to b e r 30, 2007. In the pay application dated February 26, 2007, Dunn certified that it h a d completed 99.08% of its work. Dunn's attorney indicated that as of April or M a y, 2007, the project was "99 ½ to 100% complete by Dunn, with only punch list type ite m s to complete, if any work is remaining." Additionally, the Quality Assurance R e c o rd s confirm that only punch list items remained to be completed after August 12, 2007. Further, the Payment History dated September 11, 2007, indicates that the last C h an g e Order to complete the job was dated February 21, 2007. The Payment History s h o w s the billing dates and payments made by GTS, and states that, after considering the ch an g e orders and payments made to Dunn, the balance of $204,624.38 was then due. In a letter dated December 14, 2007, Gray's attorney reiterated that the work was "99% to 1 0 0 % complete, with only punch list type items remaining to be completed," and that th e balance owed was $204,624.38 ­ the same amount included in the September 11, 2 0 0 7 , Payment History. This indicates that, at least as of September 11, 2007, no a d d itio n a l work had occurred. Based on the statements from Dunn's own attorney, Dunn completed the work as ea rly as April or May, 2007. At the latest, according to the Payment History, the work h a d stopped as of September 11, 2007. Under either analysis, Dunn's time f o r filing a Miller Act claim had expired when this Complaint was filed. Accordingly, the

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c la im is prescribed. C o n c lu s io n B a se d on the foregoing reasons, the Motion for Summary Judgment is hereby GRANTED, and all claims asserted against defendants are DISMISSED WITH P R E JU D IC E .

J a n u a ry 13, 2010, Lafayette, Louisiana.

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