United States v. Sergent's Mechanical Systems, Inc. et al

Filing 24

INITIAL CASE MANAGEMENT ORDER: Motion to Amend Pleadings due by 8/2/2013. Discovery due by 11/1/2013. Dispositive Motions due by 3/3/2014. Signed by District Judge Aleta A. Trauger on 2/21/13. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(dt)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE AT NASHVILLE
UNITED STATES f/u/b/o PERFORMANCE
CONSULTING, LLC d/b/a MAINSTREAM
HEATING AND COOLING,
Plaintiff,
v.
SERGENT’S MECHANICAL SYSTEMS,
INC. and BERKLEY REGIONAL
INSURANCE COMPANY
Defendants.

SERGENT’S MECHANICAL SYSTEMS,
INC.,
Counter-Plaintiff,
v.
PERFORMANCE CONSULTING, LLC d/b/a
MAINSTREAM HEATING AND COOLING,
Counter-Defendant.

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CIVIL ACTION NO. 3:12-cv-01237
JURY DEMAND

INITIAL CASE MANAGEMENT ORDER

In accordance with Local Rule 16.01(d) of this Court, Performance Consulting,
LLC d/b/a Mainstream Heating and Cooling, (“Mainstream”), Sergent’s Mechanical
Systems, Inc. (“Sergent”) and Berkley Regional Insurance Company (“Berkley”) submit
the following proposed case management order for consideration by the Court in
connection with the Initial Case Management Conference to be held on Monday, January
28, 2013.

310161.1

A.

Jurisdiction and Venue
1.

This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331

and the provisions of the Miller Act, 40 U.S.C. § 3133(b)(3)(B) in that Mainstream’s
cause of action arises under federal law.

This Court has pendent jurisdiction and

supplemental jurisdiction over the state law claims alleged by the parties pursuant to 28
U.S.C.1367.
2.

Venue is proper in this District pursuant to 40 U.S.C. § 3133(b)(3)(B) and

28 U.S.C. § 1391(a)(2) because the contract was to be performed and executed within
this District.
B.

Brief Theories of the Parties
1)

Mainstream:

Mainstream asserts that this cause of action arose out of Sergent’s breach of the
contract between the parties (the “Subcontract”) in connection with improvements to real
property located in Montgomery County, Tennessee at Fort Campbell High School (the
“Project”). As detailed in the Complaint, Mainstreams alleges that Sergent breached the
Subcontract by: (1) forcing Mainstream to follow a work schedule for the Project which
contained numerous flaws; (2) engaging in conduct which interfered and disrupted the
work of Mainstream on the Project; (3) routinely ignored quality control procedures to
the detriment of Mainstream; (4) unnecessarily supplementing Mainstream’s work on the
Project and back charging Mainstream for such supplementation; (5) interfering with
Mainstream’s work on site; and (6) paying Mainstream’s pay applications late or at a
reduced amount with no explanation.

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Sergent also wrongfully terminated Mainstream under the express terms of the
Subcontract by not providing Mainstream with written notice of alleged defective work
and the opportunity to remedy the same. Sergent converted Mainstream’s property by
taking wrongful possession of Mainstream’s tools, equipment and materials that were on
site at the time of Mainstream’s wrongful termination.
Pursuant to the terms of the Subcontract, Sergent also withheld as retained funds a
percentage of each of Mainstream’s pay applications.

Sergent was advised of

Mainstream’s statutory right under the Tennessee Prompt Pay Act, as set forth in Tenn.
Code Ann. § 66-34-101 et seq., to receive payment for work completed on and materials
incorporated into the Project, inclusive of the retained funds and converted property, but
Sergent has refused to make such payment to Mainstream.
Pursuant to Sergent’s contract with the U.S. Army Corps of Engineers, Sergent
obtained a payment bond (the “Bond”) from Berkley in the amount of $5,738,007.00
which obligated Berkley jointly and severally with Sergent to make payments to all
persons, such as Mainstream, having a direct contractual relationship with Sergent who
furnished labor, materials or both in the prosecution of the work on the Project in the
event that Sergent made to make prompt payment to such persons. Mainstream has
submitted a claim for payment to Berkley under the Bond, but Berkley has failed to pay
Mainstream the amount due, necessitating Mainstream’s cause of action against Berkley
under the Miller Act, as set forth in 40 U.S.C. § 3133.
As a direct and proximate result of Sergent’s material breach of the Subcontract
and wrongful termination of Mainstream, along with Sergent’s failure to make payment
to Mainstream pursuant to the Tennessee Prompt Pay Act, Sergent’s conversion of

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Mainstream’s property and Berkley’s failure to make payment to Mainstream under the
Bond, Mainstream has been damaged in an amount currently estimated to be
$760,640.95.

Finally, Mainstream is entitled to reimbursement of its reasonable

attorneys’ fees and costs due to Sergent’s failure to comply with the Tennessee Prompt
Pay Act.
2)

Sergent:

Discovery and factual investigation has not yet begun, however, Sergent alleges
Mainstream was terminated for default on or about July 25, 2012, due to Mainstream’s
breaches of the subcontracting agreement it entered into with Sergent. Mainstream’s
breaches included, but were not limited to 1) failing to complete its scope of work in a
timely manner; 2) performing its scope of work in a defective and deficient manner
causing resulting damages to the project; 3) failing to pay its materialmen and suppliers;
4) attempting to fraudulently obtain money from Sergent by inflating invoices; and 5)
failing to follow plans, specifications, and directives.
3)

Berkley:

Discovery and factual investigation has not yet begun, however, Berkley alleges
that Berkley as surety on Sergent’s Miller Act Payment Bond is only liable to
Mainstream for labor and materials to the extent Sergent is liable to Mainstream for labor
and materials.
C.

Issues Resolved
Jurisdiction and venue.

D.

Issues Still in Dispute
Liability and damages.

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E.

Initial Disclosures
The parties shall exchange initial disclosures pursuant to Fed. R. Civ. P. 26(a)(1)

on or before February 25, 2013.
F.

Discovery
The parties shall complete all written discovery and depose all fact witnesses on

or before November 1, 2013. Discovery is not stayed during dispositive motions, unless
ordered by the court. Local Rule 33.01(b) is expanded to allow 40 interrogatories,
including subparts. No motions concerning discovery are to be filed until after the parties
have conferred in good faith and, unable to resolve their differences, have scheduled and
participated in a conference call with Judge Trauger.
G.

Motions to Amend
The parties shall file all Motions to Amend on or before August 2, 2013.

H.

Disclosure of Experts
Mainstream shall identify and disclose all expert witnesses and expert reports on

or before November 15, 2013. Sergent and Berkley shall identify and disclose all expert
witnesses and reports on or before December 6, 2013.
I.

Depositions of Expert Witnesses
The parties shall depose all expert witnesses on or before February 3, 2014.

J.

Joint Mediation Report
The parties shall file a joint mediation report on or before August 30, 2013.

K.

Dispositive Motions
The parties shall file all dispositive motions on or before March 3, 2014.

Responses to dispositive motions shall be filed within twenty (20) days after the filing of

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the motion. Optional replies may be filed within ten (10) days after the filing of the
response. Briefs shall not exceed 20 pages. No motion for partial summary judgment
shall be filed except upon leave of the court. Any party wishing to file such a motion
shall first file a separate motion that gives the justification for filing a partial summary
judgment motion in terms of overall economy of time and expense for the parties,
counsel and the court.
L.

Electronic Discovery
The parties have reached agreements on how to conduct electronic discovery.

Therefore, the default standard contained in Administrative Order No. 174 need not apply
to this case.
M.

Estimated Trial Time
Trial is scheduled to start on June 24, 2014 and will last five (5) days.

February
SO ORDERED this ______ day of ___________________, 2013.
21st

ALETA A. TRAUGER
Judge, United States District Court

310161.1

Approved for Entry:

/s/ Vic L. McConnell
Vic L. McConnell
[e-mail]
Charles L. Howorth III
[e-mail]
SMITH CASHION & ORR, PLC
231 Third Avenue North
Nashville, Tennessee 37201
Telephone: [phone]
Facsimile:
[phone]
Attorneys for Performance
Consulting, LLC d/b/a Mainstream
Heating and Cooling

/s/ William L. Bruckner
William L. Bruckner
[e-mail]
Branden L. Timboe
[e-mail]
BRUCKNER & WALKER, LLP
4550 Kearny Villa Road, Suite 209
San Diego, California 92123
Attorneys for Sergent’s Mechanical
Systems, Inc. and Berkley Regional
Insurance Company

/s/ Garry K. Grooms
Garry K. Grooms
[e-mail]
STITES & HARBISON, PLLC
401 Commerce Street, Suite 800
Nashville, Tennessee 37219
Co-Counsel for Sergent’s Mechanical
Systems, Inc.

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