United States of America f/u/b/o Kogok Corporation v. Travelers Casualty and Surety Company Of America et al
Filing
98
MEMORANDUM OPINION AND ORDER GRANTING SURETY DEFENDANTS' MOTION TO DISMISS, GRANTING DEFENDANT BELL CONSTRUCTORS, LLC'S MOTION FOR SUMMARY JUDGMENT, AND DENYING AS MOOT PLAINTIFF'S MOTION TO AMEND THE AMENDED SCHEDULING ORDER: It is O RDERED that Surety Defendants' 88 Motion to Dismiss is GRANTED; Bell Constructors, LLC's 86 Motion to Dismiss is GRANTED; Plaintiff Kogok's 71 Motion to Amend the Scheduling Order is DENIED AS MOOT. This civil action is DISMISSED and STRICKEN from the active docket of this Court. The Clerk is DIRECTED to enter judgment on this matter. Signed by Senior Judge Frederick P. Stamp, Jr on 9/24/15. (cnd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
UNITED STATES OF AMERICA
f/u/b/o KOGOK CORPORATION,
Plaintiff,
v.
Civil Action No. 1:13CV240
(STAMP)
TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA,
FEDERAL INSURANCE COMPANY,
FIDELITY & DEPOSIT COMPANY OF MARYLAND,
ZURICH AMERICAN INSURANCE COMPANY,
LIBERTY MUTUAL INSURANCE COMPANY,
THE CONTINENTAL INSURANCE COMPANY,
and BELL CONSTRUCTORS, LLC,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING SURETY DEFENDANTS’ MOTION TO DISMISS,
GRANTING DEFENDANT BELL CONSTRUCTORS, LLC’S
MOTION FOR SUMMARY JUDGMENT,
AND DENYING AS MOOT PLAINTIFF’S MOTION TO
AMEND THE AMENDED SCHEDULING ORDER
I.
Procedural History
The plaintiff (“Kogok”) filed this action under the Miller
Act, 40 U.S.C. § 3133, to recover payment for labor and materials
it rendered to the FBI Biometric Technology Center, New Office
Building and Central Utilities Plant Expansion (“the project”)
located in Clarksburg, West Virginia.
Turner Construction Company
(“Turner”) and the Government entered into a contract, in which
Turner agreed to construct the project.
Turner entered into a
subcontract agreement with Bell Constructors, LLC (“Bell”) in which
Bell agreed to perform the mechanical work on the project.
Bell
then entered into a subcontract agreement with Kogok, in which
Kogok agreed to provide sheet metal, ductwork, and related HVAC
services
to
the
project
for
$3.22
million.
The
defendants
Travelers Casualty and Surety Company of America, Federal Insurance
Company, Fidelity & Deposit Company of Maryland, Zurich American
Insurance
Company,
Continental
Liberty
Insurance
Mutual
Company
Insurance
(“the
Company,
sureties”
or
and
the
“surety
defendants”) issued a payment bond on behalf of Turner, the general
contractor, for the project.
The surety defendants previously filed a motion for partial
summary judgment and to stay all proceedings.
More specifically,
the surety defendants sought summary judgment against Kogok with
respect to: (1) all claims arising on or before October 31, 2013;
(2) Kogok’s claims for damages for delays; and (3) Kogok’s claim
for damages resulting from labor inefficiency.
This Court granted
the surety defendants’ motion for partial summary judgment but
denied their motion to stay all proceedings.
ECF No. 61.
Later, Kogok filed a motion to amend the complaint and a
motion to amend the scheduling order.
motion
to
amend
the
complaint,
This Court granted Kogok’s
directed
Kogok
to
file
a
reformulated complaint,1 and deferred ruling on Kogok’s motion to
1
This Court permitted Kogok to file an amended complaint
because Kogok wanted to preserve certain claims for appeal or
reconsideration purposes. For those purposes, this Court permitted
Kogok to file an amended complaint.
In addition to an amended
complaint, this Court directed Kogok to file a reformulated
2
amend
the
scheduling
reformulated
order.
complaint,
ECF
Kogok
added
No.
77.
Bell
as
asserted several claims against Bell.2
Regarding
the
defendant
and
a
Moreover, under Counts I
through VI, Kogok revised its allegations and relief sought against
the
surety
defendants.
After
Kogok
filed
its
reformulated
complaint, the surety defendants filed a motion to dismiss the
reformulated
judgment.
complaint,
and
Bell
filed
a
motion
for
summary
ECF Nos. 88 and 86, respectively.
For the reasons set forth below, the surety defendants’ motion
to dismiss and Bell’s motion for summary judgment are both granted.
Furthermore, Kogok’s motion to amend/correct the scheduling order
is denied as moot.
II.
Turner
contract.
and
the
Facts
Government
entered
into
a
construction
Turner executed a labor and material payment bond with
the surety defendants as joint and several sureties, which Turner
complaint so as to clarify the “actual” remaining claims and
allegations that took into account this Court’s prior rulings. ECF
No. 77. The parties future filings and pleadings, including those
at issue in this order, pertain to the allegations set forth in the
reformulated complaint (ECF No. 81).
2
In the reformulated complaint, Kogok asserts six counts
(Counts VII through XII) against Bell.
Those counts are the
following: Count VII, breach of contract for improperly rejecting
payment applications; Count VIII, breach of contract for requiring
improperly broad waivers; Count IX, breach of contract for
preventing Kogok from preserving properly asserted claims; Count X,
breach of contract by requiring Kogok to perform change order work;
Count XI, unjust enrichment by Bell; and Count XII, quantum meruit
by Bell.
3
delivered to the Government. After entering into the contract with
the Government, Turner subcontracted the mechanical work on the
project to Bell.
Bell then entered into a subcontract agreement
with Kogok, in which Kogok agreed to provide sheet metal, ductwork,
and related HVAC services for the project.
Kogok was to provide
such material and services for $3.22 million.
ECF No. 81 Ex. B.
At issue now are certain filings by Kogok and three provisions
of
the
subcontract
agreement
between
Bell
and
Kogok.
In
particular, the three provisions of the subcontract agreement are
the “Release and Waiver” forms, the “Dispute” provision, and the
“No Damages for Delay” clause.
Regarding the Release and Waiver
forms, Bell required Kogok to submit payment applications to Bell
every month.
ECF No. 87 Ex. 3.
Pursuant to the subcontract
agreement, each payment application had to be submitted with a
Release and Waiver form.
The Release and Waiver forms each state
the following:
In consideration of the payment herewith made, the
Undersigned [Kogok] does fully and finally release and
waive any and all claims, causes of action, and/or lien
rights against the Contractor [Bell] . . . for all costs,
expenses, or losses of any nature or description which
have arisen or are in any manner related to any aspect of
the Work items from the date the Work items originally
commenced to the date payment is made hereunder. This
Release and Waiver applies to all claims, disputes, and
other matters through the date this payment is made,
including all claims for direct and indirect costs,
productivity losses, delays, accelerations, ripple
effects, field and home office overhead, equipment costs,
and all other consequential and incidental costs, losses,
and/or damages.
4
ECF No. 87 Ex. 4.
The record shows that Kogok consecutively
submitted 26 Release and Waiver forms, which were each executed and
contained the language quoted above.
The subcontract agreement also contained a Disputes provision,
which relates to any change orders placed pursuant to the Change
Order provision.
The Change Order provision states in relevant
part that if Kogok and Bell are unable to agree on adjustments to
the contract by change orders, “[Kogok] shall proceed with the
change as directed by Bell and preserve its right to an equitable
adjustment hereto pursuant to the Disputes provision set forth
herein.
[Kogok] shall be bound by Bell’s adjustments if [Kogok]
fails to strictly comply with the Disputes provision.”
Ex. 3.
ECF No. 87
As referenced in the Change Order provision, the Disputes
provision states that “[Kogok] shall give Bell written notice of
all claims involving Bell for time extensions and additional costs
within seven (7) days of the event giving rise to the claim;
otherwise, such claim(s) shall be deemed forever waived.”
(emphasis added).
Id.
Any amounts that Kogok seeks to recover for any
claims “is limited to the amounts that Bell may recover from the
[Government] on Kogok’s behalf.” Id. Moreover, the “Government’s]
decision regarding [Kogok’s] claim shall be final and conclusive as
between Bell and [Kogok], and Bell shall have no liability to
[Kogok] for such claims.”
Id. (emphasis added).
5
The final provision of the subcontract agreement at issue is
the “No Damages for Delay” clause.
That clause states in relevant
part:
NO DAMAGES FOR DELAY:
The Subcontractor [Kogok]
expressly agrees not to make, and hereby waives, any and
all claims for damages on account of any delay,
obstruction, or hindrance for any cause whatsoever,
including but not limited to the aforesaid cause, and
agrees that its sole right and remedy in the case of any
delay, obstruction or hindrance shall be an extension of
time fixed for completion of the Work [unless and to the
extent that Bell recovers delay damages from the Owner
which are directly allocable to the Subcontractor
[Kogok]].
Id.
Bell and Kogok agreed to the subcontract agreement with the
above terms and conditions.
In addition to the contract provisions quoted above, Kogok
filed several “Certified Claim” forms.
The Certified Claim forms
refer to the proposed change order requests (“PCO”) that Kogok
submitted, which it claims relate to work done outside of the scope
of the contract.
Each of those claims contains the following
certification by Kogok:
I hereby certify that the claim is made in good faith;
that the supporting data are accurate and complete to the
best of my knowledge and belief; that the amount
requested accurately reflects the minimum contract
adjustments for which [Kogok] believes the Government is
liable; and that I am duly authorized to certify the
claim on behalf of [Kogok].
ECF No. 87 Ex. 8 (emphasis added).
working on the project.
Kogok states that it is still
ECF No. 81 ¶ 16 (stating that Kogok “is
6
currently in the process of winding down its activities on the
[p]roject.”).
Kogok now claims that Bell and the surety defendants owe Kogok
money for its work on the project.
Kogok believes that Bell owes
it $68,739.45 for work completed under the subcontract agreement
pursuant to Pay Applications 43 through 46.
ECF No. 81 Ex. 3.
Those Pay Applications were submitted from November 2014 to April
2015.
Id.
In addition to the Pay Applications, Kogok submitted
several PCOs for labor that it claims fell outside the contractual
scope of work.
Those PCOs show an additional $2,075,976.45 that
Kogok claims Bell has withheld.
ECF No. 81 ¶ 18.
As to the surety
defendants, Kogok seeks not less than $174,012.59 from each surety
defendant.
The amount sought from the surety defendants is based
on Pay Applications 43 through 46, certain PCOs,3 and alleged
delays and impacts to Kogok that occurred after October 31, 2013.
Previously, Kogok submitted a Notice of Claim to Turner, which
listed claims for past payments up to October 31, 2013.
Ex. 6.
ECF No. 89
However, that Notice of Claim did not state claims for the
Pay Applications or the PCOs that are currently at issue.
3
PCOs 60, 62,64, 67, and 68 allegedly apply to the amounts
that the surety defendants owe Kogok.
7
III.
A.
Applicable Law
Motion to Dismiss
In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a
court must accept all well-pled facts contained in the complaint as
true.
Nemet Chevrolet, Ltd v. Consumeraffairs.com, Inc, 591 F.3d
250, 255 (4th Cir. 2009). However, “legal conclusions, elements of
a cause of action, and bare assertions devoid of further factual
enhancement fail to constitute well-pled facts for Rule 12(b)(6)
purposes.”
(2009)).
Id. (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
This
Court
also
declines
to
consider
“unwarranted
inferences, unreasonable conclusions, or arguments.”
Wahi v.
Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir.
2009).
It has often been said that the purpose of a motion under Rule
12(b)(6) is to test the formal sufficiency of the statement of the
claim for relief; it is not a procedure for resolving a contest
about the facts or the merits of the case.
5B Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 1356 (3d ed.
1998).
The Rule 12(b)(6) motion also must be distinguished from a
motion for summary judgment under Federal Rule of Civil Procedure
56, which goes to the merits of the claim and is designed to test
whether there is a genuine issue of material fact.
Id.
For
purposes of the motion to dismiss, the complaint is construed in
8
the
light
essentially
most
the
favorable
court’s
to
the
inquiry
party
is
making
directed
the
to
claim
and
whether
the
allegations constitute a statement of a claim under Federal Rule of
Civil Procedure 8(a).
Id. § 1357.
A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Facial
plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 129 S. Ct. at 1949).
Detailed
factual allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief above the speculative
level.”
B.
Twombly, 550 U.S. at 555.
Motion for Summary Judgment
Under Rule 56(c) of the Federal Rules of Civil Procedure,
A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by:
(A) citing to particular parts of materials in the
record, including depositions, documents, electronically
stored
information,
affidavits
or
declarations,
stipulations . . . admissions, interrogatory answers, or
other materials; or
(B) showing that the materials cited do not establish
the absence or presence of a genuine dispute, or that an
adverse party cannot produce admissible evidence to
support the fact.
9
Fed. R. Civ. P. 56(c).
The party seeking summary judgment bears
the initial burden of showing the absence of any genuine issues of
material fact.
(1986).
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
“The burden then shifts to the nonmoving party to come
forward with facts sufficient to create a triable issue of fact.”
Temkin v. Frederick County Comm’rs, 945 F.2d 716, 718 (4th Cir.
1991), cert. denied, 502 U.S. 1095 (1992) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). However, as the
United States Supreme Court noted in Anderson, “Rule 56(e) itself
provides that a party opposing a properly supported motion for
summary judgment may not rest upon the mere allegations or denials
of his pleading, but . . . must set forth specific facts showing
that there is a genuine issue for trial.”
Id. at 256.
“The
inquiry performed is the threshold inquiry of determining whether
there is the need for a trial -- whether, in other words, there are
any genuine factual issues that properly can be resolved only by a
finder of fact because they may reasonably be resolved in favor of
either party.”
Id. at 250; see also Charbonnages de France v.
Smith, 597 F.2d 406, 414 (4th Cir. 1979) (Summary judgment “should
be granted only in those cases where it is perfectly clear that no
issue of fact is involved and inquiry into the facts is not
desirable to clarify the application of the law.” (citing Stevens
v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950))).
10
In Celotex, the Supreme Court stated that “the plain language
of Rule 56(c) mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who
fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party
will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322.
In reviewing the supported underlying facts, all inferences must be
viewed in the light most favorable to the party opposing the
motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986).
IV.
Discussion
At issue now are the surety defendants’ motion to dismiss,
Bell’s motion for summary judgment, and Kogok’s motion to amend the
scheduling order.
Those motions are discussed below in the order
presented.
A.
The Surety Defendants’ Motion to Dismiss
In their motion to dismiss, the sureties argue that Kogok
failed to comply with the notice requirements under the Miller Act.
In support, the sureties point out that the amounts under the PCOs
and Pay Applications at issue were never mentioned in the Notice of
Claim that Kogok submitted to Turner.
In addition, 90 days have
passed since Kogok provided any materials or services relating to
its claims.
Therefore, Kogok has not complied with the notice
requirement, and thus the sureties argue that its claims against
11
them should be dismissed.
failed
to
complaint.
comply
In
with
the
particular,
The sureties also argue that Kogok
requirements
Kogok
of
allegedly
the
reformulated
reasserted
claims
regarding delays and impacts associated with the project.
The
sureties argue that such claims were dismissed pursuant to this
Court’s
order
granting
partial
summary
judgment.
For
those
reasons, the sureties believe that the claims against them must be
dismissed.
Contrary to the claims of the sureties, Kogok argues that the
sureties had actual knowledge, through depositions and filings, of
Kogok’s claims under the Miller Act.
Further, because the Pay
Applications were submitted to Bell, and then to Turner by Bell,
the sureties should have received additional notice of Kogok’s
claims.
Next, Kogok believes that the exception to the No Damages
for Delay clause will take effect when the Government compensates
Turner for the delays experienced.
Because the Government may
compensate Turner, Kogok believes it is premature to dismiss its
claims.
Based on the arguments presented above, the surety defendant’s
motion to dismiss centers around two issues: (1) whether Kogok
complied with the “notice” requirement under the Miller Act, and
(2) whether Kogok reasserted claims for damages due to delays,
which this Court previously ruled on.
See ECF No. 61.
issues are discussed below in the order presented.
12
Those
1.
Notice under the Miller Act
The Miller Act allows a subcontractor the right to bring a
civil action on a payment bond furnished by the contractor, despite
having no direct contractual relationship with the contractor.
U.S.C. § 3133(b)(2).
40
A party bringing such an action must give
“written notice to the contractor within 90 days from the date on
which the person [here, Kogok]” furnished the last of the labor or
materials for which the claim is made. Id. (emphasis added). That
provision of the Miller Act further states that such an action
“must state with substantial accuracy the amount claimed and the
name of the party to whom” the labor or materials were furnished.
Id.
The written notice must be served “by any means that provides
written, third-party verification of delivery” or “in any manner in
which the United States marshal of the district” may serve summons.
Id. at § 3133(b)(2)(A-B); see also Alban Tractor Co., Inc. v.
Hudson Ins. Co., 2013 WL 509151, at *3 (D. Md. Feb. 11, 2013) (“But
second-tier subcontractors [such as Kogok] submit their invoices to
the
subcontractor
[such
as
Bell]
rather
than
the
general
contractor, and consequently the general contractor has no notice
of the outstanding invoices unless such notice is provided by the
second-tier subcontractor.”).
Recovery in an action brought under 40 U.S.C. § 1331(2) has a
condition precedent: the “timely giving of the required notice.”
General Electric Co. v. H.I. Lewis Construction Co., Inc., 375 F.2d
13
194, 198 (2d. Cir. 1967).
receive
a
purposes.”
liberal
construction
to
effectuate
its
protective
United States ex rel. Sherman v. Carter, 353 U.S. 210,
216 (1957).
the
It is true that the Miller Act “should
Indeed, the “principal purpose of the Miller Act is
protection
of
persons
supplying
labor
and
materials
to
subcontractors on federal construction projects.” Honeywell v. A&L
Mechanical
Contractors,
677
F.2d
383,
386
(4th
Cir.
1982).
However, “the authority to construe liberally the provisions of the
Miller Act is not the authority to contravene the plain language of
the statute.”
Pepper Burns Insulation, Inc. v. Artco Corp., 970
F.2d 1340, 1343 (4th Cir. 1992) (citing MacEvoy Co. v. United
States, 322 U.S. 102, 107 (1944)).
Moreover, the United States
Court of Appeals for the Fourth Circuit has “previously exempted
from liberal construction the ninety-day limitation on notice
provisions.”
Pepper Burns Insulation, Inc., 970 F.2d at 1343
(citing Honeywell, 677 F.2d at 386).
If a subcontractor, like
Kogok, does not assert a claim against the general contractor and
its
surety,
“the
contractor
subcontractor with impunity.
may
make
final
payment
to
the
It would be quite unfair to the
general contractor to expose it to stale claims of which it had no
notice during the ninety day period.”
Honeywell, 677 F.2d at 386
(citing Noland Co. v. Allied Contractors, Inc., 273 F.2d 917, 92021 (4th Cir. 1959)).
14
Any notice under the Miller Act must satisfy the following
three requirements: “(1) notice must be given within 90 days of the
subcontractor’s last work; (2) the notice must ‘stat[e] with
substantial accuracy the amount claimed’; and (3) the notice must
include ‘the name of the party to whom the material was furnished
or
supplied
or
for
whom
the
labor
was
done
or
performed.’”
Trustees of Heating, Piping and Refrigeration Pension Fund v.
Milestone Const. Services, Inc., 991 F. Supp. 2d 713, 718 (D. Md.
2014) (quoting S&G Excavating, Inc. v. Seaboard Sur. Co., 236 F.3d
883, 884 (7th Cir. 2001)).
The
law
discussed
above
demonstrates
that
the
notice
requirement is strictly interpreted by courts and must be strictly
adhered to by a claimant.
Further, any such notice must “state
with substantial accuracy” the amount claimed and must be received
by the contractor within 90 days.
Compliance with the notice
requirement is a condition precedent to recovery under 40 U.S.C.
§ 3133(b)(2).
With those legal principles in mind, it is clear
that Kogok has not complied with notice requirement regarding its
claims against the sureties in the reformulated complaint.
Kogok
provided only one proper notice of its claim under the Miller Act,
which was on October 16, 2013.
ECF No. 89 Ex. 6.
That notice of
claim did not contain the PCOs or Pay Applications that Kogok now
seeks to recover from the surety defendants. The law is clear that
any notice under the Miller Act must “state with substantial
15
accuracy” the amount claimed.
Here, the notice of claim does not
set forth any of the amounts that Kogok now seeks to obtain.
Therefore, Turner, as the general contractor, could not be placed
on proper notice, which is the primary purpose of the notice
requirement.
This Court believes that “[i]t would be quite unfair
to the general contractor to expose it to stale claims of which it
had no notice during the ninety day period.”
Honeywell, 677 F.2d
at 386 (internal citation omitted).
Kogok contends that Bell submitted Kogok’s PCOs and relevant
Pay Applications to Turner.
Because “Turner was on actual notice
of the fact that Kogok was not being timely paid for labor and
materials,”
requirement.
Kogok
believes
that
it
complied
with
the
notice
However, that argument is slightly misguided because
similar types of filings have been rejected as proper “notice”
under the Miller Act.
See, e.g., American Radiator & Standard
Sanitary Corporation v. Northwestern Engineering Co., 122 F.2d 600
(8th Cir. 1941) (finding that invoices submitted by a subcontractor
to a contractor “clearly did not constitute written notice” and did
not “[state] with substantial accuracy the amount claimed.”
Thus,
“[t]hey could accordingly not be treated as a substitute for the
statute imposed as a condition precedent to any right of action
upon the bond.”); see also Maccaferri Gabions, Inc. v. Dynateria,
Inc., 91 F.3d 1431, 1438 (11th Cir. 1996); Henry Walke Co. v. Van
de Riet, 316 F.2d 912 (4th Cir. 1963); Bowden v. Malloy, 239 F.2d
16
572 (9th Cir. 1956).
Kogok asserts that discovery will show that
the surety defendants were informed of Kogok’s claims, and that
Turner had actual knowledge of those claims. Those assertions were
not alleged in the reformulated complaint.
Whether this Court
considers those allegations or not, the record speaks for itself:
Kogok did not comply with the written notice requirements of the
Miller Act.
Its claims under the Pay Applications and PCOs at
issue were not listed or discussed in the October 16, 2013 Notice
of Claim, which was Kogok’s only proper written notice. Therefore,
the surety defendants’ motion to dismiss is granted.
2.
Delay for Damages Claim
In the reformulated complaint, Kogok seeks to recover against
the surety defendants for, among other reasons, “delays and impacts
to Kogok after October 31, 2013.”
ECF No. 81.
Previously, this
Court dismissed Kogok’s claims for delay damages against the surety
defendants.
ECF No. 61 at *13-17.
Following that ruling, this
Court granted Kogok’s motion to file an amended complaint. ECF No.
77. However, this Court explicitly directed Kogok to eliminate any
previously dismissed claims in its reformulated complaint.
Id.
The facts, issues, and “No Delay for Damages” clause pertaining to
the damages for delay claim are identical to those that this Court
previously considered and ruled upon.
Viewed under the law of the case doctrine, this Court’s prior
decision “‘should continue to govern the same issues in subsequent
17
stages in the same case.’”
Christianson v. Colt Industries
Operating Corp., 486 U.S. 800, 816 (1988) (quoting Arizona v.
California, 460 U.S. 605, 618 (1983)).
More specifically, the law
of the case doctrine provides that “a court is generally precluded
from reconsidering an issue that has already been decided by the
same court, or a higher court in the identical case.”
Bible, 983 F.2d 152, 154 (9th Cir. 1993).
It serves as a guide to
a district court when exercising its discretion.
California, 460 U.S. 605, 618 (1983).
Thomas v.
Arizona v.
Generally, a court may
depart from applying the doctrine in the following situations: “(1)
the first decision was clearly erroneous; (2) an intervening change
in
the
law
has
occurred;
(3)
the
evidence
on
remand
is
substantially different; (4) other changed circumstances exist; or
(5) a manifest injustice would otherwise result.”
Bible, 983 F.2d
at 155.
To the extent that Kogok is attempting to reassert its damages
for delay claim, such a claim must be dismissed for the same
reasons this Court previously set forth in its prior memorandum
opinion and order.
that
the
No
enforceable.
ECF No. 61.
Damages
Id.
for
In that order, this Court found
Delay
clause
was
clear,
valid,
and
Pursuant to that finding, this Court dismissed
Kogok’s claim because Kogok “expressly agree[d] not to make, and
[thereby waived, any and all claims for damages on account of any
delay.”
Id. (quoting the No Damages for Delay clause).
18
Under the
law of the case doctrine, that means Kogok’s attempt to reassert
that claim again fails.
that doctrine apply.
Furthermore, none of the exceptions to
The facts, law, and circumstances have not
changed such that this Court should reconsider its prior ruling on
the issue.
Further, no manifest injustice would exist if this
Court did not reconsider its prior ruling.
the case doctrine applies.
Therefore, the law of
Based on this Court’s prior ruling as
applied to the case at hand, the surety defendants’ motion to
dismiss is granted in its entirety.
B.
Bell’s Motion for Summary Judgment
In its motion for summary judgment, Bell generally asserts
that the express terms of the contract control this dispute and bar
the claims asserted in the reformulated complaint against it.
No. 86.
ECF
Bell contends that Kogok’s claims arising on or before
October 31, 2013 are barred by its Release and Waiver forms.
In
support of that contention, Bell points out that Kogok executed 26
Release and Waiver forms, wherein Kogok ultimately agreed to
release and waive claims that occurred up to October 31, 2013.
Further, Bell points out that this Court, in its order granting
partial summary judgment, gave identical waivers their full effect.
Thus, Bell argues that the same should apply as to the relevant
claims by Kogok in its reformulated complaint.
Bell asserts that
same argument as to the No Damages for Delay clause.
believes
that
its
subcontract
agreement
19
controls
Next, Bell
the
dispute
between Bell and Kogok, meaning that Kogok’s claims fail as a
matter of law.
More specifically, Bell notes that the contract
provides that payment by the Government is a condition precedent to
payment to Kogok by Bell.
Bell believes that, thus far, it has
complied with that condition.
Further, as to specific payments
that Kogok seeks, Bell contends that it is Kogok’s responsibility,
pursuant to requests by the Government, to revise its payment
applications.
As to Kogok’s claims of unjust enrichment and
quantum meruit, Bell argues that an express and written agreement
governs the dispute and claims of Kogok.
Therefore, any implied
contract claims are precluded. In addition, Bell points to several
certifications wherein Kogok allegedly states that the Government,
not Bell, is liable for Kogok’s claims.
Kogok argues that Bell prevented Kogok from modifying the
Release and Waiver forms.
Moreover, Kogok contends that its
Release and Waiver forms are unenforceable because they were made
unknowingly and involuntarily.
Further, Kogok argues that Bell is
misrepresenting the intent of the parties as to the Releases and
Waiver forms.
Next, Kogok argues that the No Damages for Delay
clause maintains an exception for when Bell recovers delay damages
from the Government, which may be allocable to Kogok.
Kogok
asserts that Bell may receive those damages soon, and thus the
exception may become applicable.
Because of that, Kogok believes
it is premature to grant summary judgment.
20
In addressing the parties’ arguments and claims, this Court
will first determine if the law of the case doctrine applies to
Kogok’s claims arising on or before October 31,2013, and to Kogok’s
claim for damages due to delays.
Next, this Court will address
Kogok’s claims as to its PCOs and Pay Applications.
This Court
will then consider Kogok’s claims for unjust enrichment and quantum
meruit.
1.
Applicability of the Law of the Case Doctrine
In its motion for summary judgment, Bell asserts that Kogok’s
claims that arose on or before October 31, 2013, and its damages
for delay claim should be dismissed under the “law of the case”
doctrine. As stated earlier, the law of the case doctrine provides
that “a court is generally precluded from reconsidering an issue
that has already been decided by the same court, or a higher court
in the identical case.”
Bible, 983 F.2d at 154.
Generally, a
court may depart from applying the doctrine in the following
situations: “(1) the first decision was clearly erroneous; (2) an
intervening change in the law has occurred; (3) the evidence on
remand is substantially different; (4) other changed circumstances
exist; or (5) a manifest injustice would otherwise result.” Bible,
983 F.2d at 155.
21
The facts show that Kogok submitted 26 Release and Waiver
forms.4
Those forms are the same forms that this Court reviewed in
its order granting the surety defendants’ motion for partial
summary judgment.
See ECF No. 61.
More specifically, this Court
found the Release and Waiver forms were clear and unambiguous, and
accordingly determined that Kogok waived its claims arising on or
before October 31, 2013.
Pursuant to the law of the case doctrine
and the facts before it, this Court finds no reason to stray from
that prior ruling.
Kogok submitted 26 Release and Waiver forms,
which explicitly stated that Kogok “fully and finally release[s]
and waive[s] any and all claims” regarding each respective cost or
payment.
Further, those Release and Waiver forms applied to
4
The Release and Waiver forms state the following:
In consideration of the payment herewith made, the
Undersigned [Kogok] does fully and finally release and
waive any and all claims, causes of action, and/or lien
rights against the Contractor [Bell] . . . for all costs,
expenses, or losses of any nature or description which
have arisen or are in any manner related to any aspect of
the Work items from the date the Work items originally
commenced to the date payment is made hereunder. This
Release and Waiver applies to all claims, disputes, and
other matters through the date this payment is made,
including all claims for direct and indirect costs,
productivity losses, delays, accelerations, ripple
effects, field and home office overhead, equipment costs,
and all other consequential and incidental costs, losses,
and/or damages.
ECF No. 87 Ex. 4. (emphasis added).
22
certain costs and payments accrued until October 31, 2013. ECF No.
87 Ex. 3.
Moreover, none of the exceptions to the law of the case
doctrine apply.
The law on the issue of contract interpretation
and applicability of waivers has not changed with respect to this
civil action since this Court’s prior ruling.
Further, the facts
and claims asserted as to the claims arising on or before October
31,
2013
against
Bell
are
nearly
identical,
if
not
surely
identical, to those that Kogok previously asserted against the
surety defendants.
See ECF Nos. 1 and 81.
Neither a change in the
facts nor a manifest injustice exist so as to justify an alteration
or reconsideration of this Court’s prior ruling.
law of the case doctrine applies.
Therefore, the
Based on that doctrine, Kogok’s
claims arising on or before October 31, 2013 against Bell must be
dismissed.
Thus, Bell’s motion for summary judgment as to such
claims is granted.
As stated earlier, the subcontract agreement between Bell and
Kogok also contained a No Damages for Delay clause.5
To the extent
5
That clause states the following:
NO DAMAGES FOR DELAY:
The Subcontractor [Kogok]
expressly agrees not to make, and hereby waives, any and
all claims for damages on account of any delay,
obstruction, or hindrance for any cause whatsoever,
including but not limited to the aforesaid cause, and
agrees that its sole right and remedy in the case of any
delay, obstruction or hindrance shall be an extension of
time fixed for completion of the Work [unless and to the
extent that Bell recovers delay damages from the Owner
23
that Kogok appears to seek damages due to delays, the law of the
case doctrine applies to such claims.
In its prior order, this
Court determined that not only was the No Damages for Delay clause
clear and unambiguous, but also that West Virginia law likely deems
such clauses as enforceable.
ECF No. 61 at *16.
Thus, this Court
granted the surety defendants’ motion for partial summary judgment
as to Kogok’s claims for damages due to delays.
The facts and record before this Court do not justify a
departure from that previous finding or ruling for three reasons.
First, the same No Damages for Delays clause at issue is the same
such
clause
that
this
Court
analyzed
in
its
prior
order.
Therefore, as was previously held, the No Damages for Delay clause
is clear, unambiguous, and enforceable.
Second, although Kogok
claims that the Government may pay Bell for delay damages, the
facts show that the Government has yet to do so.
The No Damages
for Delay clause explicitly states that Kogok waives all claims
against Bell for damages due to delays.
An exception within that
clause allows Kogok to recover such damages from Bell if Bell
“recovers delay damages from” the Government, and if those damages
are directly allocable to Kogok.
Thus far, Bell has not recovered
such damages from the Government.
which are
[Kogok]].
directly
allocable
ECF No. 87 Ex. 3.
24
Further, Kogok asserted this
to
the
Subcontractor
same argument in its response to the surety defendants’ motion for
partial
summary
exception.
judgment
regarding
See ECF No. 34 at *15-16.
the
application
of
the
Bell did not recover delay
damages from the Government then, and, according to the record,
Bell has not recovered damages now.
Therefore, the exception in
the No Damages for Delays clause is inapplicable.
Third, none of
the exceptions to the law of the case doctrine apply.
The same
facts, circumstances, and law from this Court’s prior ruling are
equally applicable here.
Further, this Court finds that no
manifest injustice would result by relying on this Court’s prior
ruling.
Thus, Bell’s motion for summary judgment is granted as to
any claims for damages due to delays.
2.
Kogok’s Claims Regarding the PCOs
As mentioned earlier, Bell argues that Kogok certified that
the Government, rather than Bell, is liable for its claims under
the PCOs.
More specifically, Bell points to two items: the
language of the Certified Claim6 forms for the PCOs and the
subcontract agreement between Kogok and Bell. The Certified Claims
6
Those Certified Claim forms state the following:
I hereby certify that the claim is made in good faith;
that the supporting data are accurate and complete to the
best of my knowledge and belief; that the amount
requested accurately reflects the minimum contract
adjustments for which [Kogok] believes the Government is
liable; and that I am duly authorized to certify the
claim on behalf of [Kogok].
ECF No. 87 Ex. 8.
25
forms stated that the requested PCO amounts “accurately reflects
the minimum contract adjustments for which [Kogok] believes the
Government is liable.”
ECF No. 87 Ex. 8.
Kogok filed a Certified
Claim form for each of the PCOs at issue, which totaled 14 such
forms.
Each form contained the above quoted language stating that
Kogok “believes the Government is liable” for the amounts of each
respective PCO.
In addition to the Certified Claim forms, the
subcontract agreement states that the “[Government’s] decision
regarding [Kogok’s] claims shall be final and conclusive as between
Bell and [Kogok], and Bell shall have no liability to [Kogok] for
such claims.”
Id. at Ex. 3.
Bell believes that Kogok agreed that
the Government, rather than Bell, is liable for the amounts under
the PCOs based on the language in the Certified Claim forms and
subcontract agreement.
Kogok seeks to refute Bell’s claim based on two reasons.
First, Kogok argues that the Certified Claim forms do not grant
Bell impunity, despite the language quoted above.
Kogok first
argues that the Certificated Claim forms were only submitted
because Bell requested it do so and to allow Bell or Turner to
recover the PCO amounts from the Government.
Kogok directs the
Court to the following language contained in the forms: “This
claim, representing uncompensated costs incurred by Kogok, is being
submitted . . . to allow Bell to seek compensation from Turner for
these costs [the PCOs amount], and/or to allow Turner to seek
26
compensation
amount].”
from
the
Government
for
these
costs
[the
PCOs
Kogok next points to the following statement contained
within all of the Certified Claim forms: “Nothing herein shall be
deemed a waiver of Kogok’s rights and remedies to recover the
amounts claimed herein under Kogok’s subcontract agreement with
Bell and/or from the Miller Act sureties under their payment bonds,
and/or as otherwise allowed by law.”
ECF No. 87 Ex. 8.
Kogok
contends that the above language does not completely absolve Bell
of liability for the amounts under the PCOs.
When reading and interpreting contract provisions, the court’s
purpose is to give full force and effect to the expressed or
implied intentions of the contracting parties, if such can be
discerned.
Truong Xuan Truc v. United States, 212 Ct. Cl. 51, 66,
1976 WL 905 (1976) (quoting Massachusetts Port Auth. v. United
States, 456 F.2d 782, 784, 197 Ct. Cl. 721, 726 (1972)); see also
SCM Corp. v. United States, 675 F.2d 280, 283, 230 Ct. Cl. 199, 203
(1982); Honeywell Inc. v. United States, 661 F.2d 182, 186, 228 Ct.
Cl. 591, 596 (1981); Dynamics Corp. of America v. United States,
389 F.2d 424, 429, 182 Ct. Cl. 62, 72 (1968).
Moreover, West
Virginia law provides that “a valid written agreement using plain
and unambiguous language is to be enforced according to its plain
intent and should not be construed.”
Toppings v. Rainbow Homes,
Inc., 490 S.E.2d 817, 822 (W. Va. 1997); see also Syl. Pt. 2,
Orteza v. Monongalia County General Hospital, 318 S.E.2d 40 (1984);
27
Syl. Pt. 1, Cotiga Development Co. v. United Fuel Gas Co., 128
S.E.2d 626 (W. Va. 1962).
In determining that intent, a court
“must view the instrument as a whole, attributing to each word its
normal or customary meaning, unless some indication exists that the
parties intended to use words in a special technical sense.” Nat’l
Cas. Co. v. Lockheed Martin Corp., 415 F. Supp. 2d 596, 601 (4th
Cir. 2006); see Dan Ryan Builders, Inc. v. Nelson, 737 S.E.2d 550
(W. Va. 2012).
The parties do not dispute the clarity or validity of the at
issue provisions in the Certified Claim forms or the above quoted
clause of the subcontract agreement.
Therefore, this Court only
has to interpret those provisions and determine their application.
See Bourke v. Dun & Bradstreet Corp., 159 F.3d 1032, 1036 (7th Cir.
1998) (“A contract is not rendered ambiguous simply because the
parties do not agree on the meaning of its terms . . . .
Where the
contract is susceptible to only one meaning . . ., the court may
interpret the contract for itself.”).
Based on the plain language
of the Certified Claim forms and subcontract agreement, Bell is not
liable for the PCOs at issue.
Kogok submitted at least 14
Certified Claim forms, wherein Kogok agreed that it “believes the
Government is liable” for those amounts.
ECF No. 87 Ex. 8.
Although the forms state that Kogok does not waive its rights to
remedies under the subcontract agreement, Kogok has no remedies for
recovery regarding the PCOs. The subcontract agreement states that
28
regarding disputed claims between Kogok and the Government, the
“[Government’s] decision regarding [Kogok’s] claims shall be final
and conclusive as between Bell and [Kogok], and Bell shall have no
liability to [Kogok] for such claims.”
Id. at Ex. 3.
Under the
Certified Claim forms, Kogok states that the Government, not Bell,
is liable for the disputed amounts.
That means the PCOs are
disputed claims between Kogok and the Government, not between Bell
and Kogok.
The subcontract agreement explicitly provides that
“Bell shall have no liability to [Kogok]” for claims between the
Government and Kogok.
Whether it is the explicit language of the
Certified Claim form, which Kogok executed at least 14 of such
forms, or the language of the subcontract agreement, Bell is not
liable for the amounts under the PCOs at issue.
To the extent that Kogok contends it was forced to comply with
requests by Bell and Turner in executing the Certified Claim forms,
that contention is equally unfounded.
The record shows no foul
play by either party during the formation or execution of the
subcontract agreement and Certified Claim forms.
parties
are
contract.
bound
by
an
undisputedly
valid
Therefore, the
and
enforceable
Kogok made the decision to execute and submit its
Certified Claim forms, as well as the subcontract agreement.
The
language and its application in this civil action could not be more
clear.
Based on the plain language of both the subcontract
29
agreement and Certified Claim forms, Bell’s motion must be granted
as to Kogok’s claims regarding the PCOs at issue.
3.
Kogok’s Claims Regarding the Pay Applications
In
addition
to
the
PCOs,
Applications 43 through 46.
Kogok
also
submitted
Payment
In the reformulated complaint, Kogok
agues that Bell breached its subcontract agreement by refusing to
pay
the
amounts
under
those
Payment
Applications.
More
specifically, Kogok asserts that Bell repeatedly rejected Kogok’s
disputed Payment Applications and ordered Kogok to provide revised
Payment Applications.
Bell
contends
particular,
Bell
ECF No. 81.
that
points
Manager, Pat Nugent.
Government
provided
those
to
allegations
the
deposition
are
of
false.
Bell’s
In
Project
In that deposition, it appears that the
Kogok
with
comments
about
those
Payment
Applications, and that the Government requested Kogok to revise
those amounts.
ECF No. 87 Ex. 10.
Further, it appears that those
comments and revisions are not “final.”
Rather, Mr. Nugent states
that Kogok may review its Payment Applications and associated
comments with the Government.
Further, the subcontract agreement
states that Bell must pay Kogok after the Government pays Bell for
the work that Kogok performed.
Although
Applications
Kogok
and
claims
that
Bell
ECF No. 87 Ex. 3.
that
is
in
Bell
rejected
breach
of
its
the
agreement, that argument appears slightly misguided.
30
Payment
subcontract
Under the
terms of the subcontract agreement, Kogok receives final payment
after Bell receives payment from the Government for Kogok’s work.
As
stated
under
understood
that
the
subcontract
payment
by
agreement,
[the
“It
Government]
is
to
expressly
Bell
for
satisfactory work by [Kogok] shall be a condition precedent to
payment by Bell to [Kogok].”
ECF No. 87 Ex. 3.
Further, it
appears that the disputed Payment Applications received comments
and requests for revisions by the Government.
ECF No. 87 at *14.
This Court does not view the conduct by Bell as a rejection, such
that it is in breach of the subcontract agreement. In its response
to Bell’s motion for summary judgment, Kogok does not address or
argue against Bell’s assertion as to the current status of the
Payment Applications.
current
status
and
Therefore, it does not appear that the
facts
Applications is in dispute.
about
the
handling
of
the
Payment
Based on the record before it and the
parties’ filings, Bell’s motion is granted as to Kogok’s claims
regarding the Payment Applications at issue.
4.
Remaining Counts of Unjust Enrichment and Quantum Meruit
Under Counts XI and XII of the reformulated complaint, Kogok
asserts claims for unjust enrichment and recovery in quantum meruit
against Bell.
However, as Bell correctly points out, “An express
contract and an implied contract, relating to the same subject
matter, cannot co-exist.” Case v. Shepherd, 84 S.E.2d 140, 144 (W.
Va. 1954). Phrased another way, quasi-contract claims, like unjust
31
enrichment or quantum meruit, are unavailable when an express
agreement exists because such claims only exist in the absence of
an agreement. Wilson v. Stratosphere Corp., 371 F. App’x 810, 81112 (9th Cir. 2010); Sea Byte, Inc. v. Hudson Marine Mgmt. Servs.,
Inc., 565 F.3d 1293, 1301 (11th Cir. 2009); Beth Israel Med. Ctr.
v. Horizon Blue Cross & Blue Shield of New Jersey, Inc., 448 F.3d
573, 586 (2d Cir. 2006) (“The existence of a valid and enforceable
written contract governing a particular subject matter ordinarily
precludes recovery in quasi contract for events arising out of the
same subject matter.
A “quasi contract” only applies in the
absence of an express agreement, and is not really a contract at
all, but rather a legal obligation imposed in order to prevent a
party’s unjust enrichment . . . .
Briefly stated, a quasi-
contractual obligation is one imposed by law where there has been
no agreement or expression of assent, by word or act, on the part
of either party involved. . .”) (emphasis in original); Karna v. BP
Corp. N. Am., 11 F. Supp. 3d 809, 820 (S.D. Tex. 2014) (“[A]
plaintiff cannot recover in quantum meruit when there is an express
contract governing the goods or services at issue.”); Plesha v.
Ferguson, 725 F. Supp. 2d 106, 112 (D.D.C. 2010) (“Because both
promissory
estoppel
and
unjust
enrichment
presuppose
that
an
express, enforceable contract is absent, District of Columbia
courts generally prohibit litigants from asserting these claims
when there is an express contract that governs the parties’
32
conduct.”); Crockett & Myers, Ltd. v. Napier, Fitzgerald & Kirby,
LLP, 440 F. Supp. 2d 1184, 1197 (D. Nev. 2006) (“An unjust
enrichment claim is ‘not available when there is an express,
written contract, because no agreement can be implied when there is
an express agreement.’”); Integral Control Sys. Corp. v. Consol.
Edison Co. of New York, 990 F. Supp. 295, 303 (S.D.N.Y. 1998).
Here, an enforceable, express, and written agreement exists, which
is the subcontract agreement.
governs
the
parties.
ECF No. 87 Ex. 3.
Therefore,
Kogok’s
That agreement
claims
for
unjust
enrichment and quantum meruit cannot proceed.
C.
Kogok’s Motion to Amend the Scheduling Order
As mentioned earlier, Kogok filed a motion to amend the
scheduling order, wherein it seeks to extend the deadline for
discovery.
ECF No. 71.
However, both the surety defendants’
motion to dismiss and Bell’s motion for summary judgment are
granted.
Therefore, no extension for discovery is necessary, and,
thus, Kogok’s motion to amend the scheduling order must be denied
as moot.
V.
Conclusion
For the reasons set forth above, defendants Travelers Casualty
and Surety Company of America, Federal Insurance Company, Fidelity
& Deposit Company of Maryland, Zurich American Insurance Company,
Liberty Mutual Insurance Company, and the Continental Insurance
Company’s motion to dismiss (ECF No. 88) is GRANTED.
33
Further,
defendant Bell Constructors, LLC’s motion for summary judgment is
GRANTED.
Finally, plaintiff Kogok Corporation’s motion to amend
the scheduling order (ECF No. 71) is DENIED AS MOOT.
Accordingly,
it is ORDERED that this civil action be DISMISSED and STRICKEN from
the active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein. Pursuant to Federal
Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment
on this matter.
DATED:
September 24, 2015
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
34
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