Triangle Grading & Paving, Inc. v. Rhino Servs.

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TRIANGLE GRADING & PAVING, INC., Plaintiff, v. RHINO SERVICES, LLC, and LONNIE STEVEN BLACKSTONE, Defendants.

No. 1:19CV486

United States District Court, M.D. North Carolina

March 29, 2023

MEMORANDUM OPINION AND ORDER ^[1]

Joe L Webster United States Magistrate Judge

This matter is before the Court on Defendants Rhino Services, LLC (“Rhino”) and its owner and manager Lonnie Steven Blackstone's (“Mr. Blackstone”) (hereinafter collectively, “Defendants”) motion for summary judgment. (Docket Entry 44.) Plaintiff Triangle Grading &amp Paving, Inc. (hereinafter “Triangle”) has responded in opposition to the motion (Docket Entry 48) and Defendants have filed a reply (Docket Entry 49). This matter is now ripe for disposition. For the reasons stated herein the undersigned will grant in part and deny in part Defendants' motion.

I. PROCEDURAL BACKGROUND

Triangle originally filed a state action for breach of contract, enforcement of a personal guaranty given by Mr. Blackstone, and declaratory judgment. (See Compl, Docket Entry 5.) In May 2019, Defendants removed the action to this Court, invoicing the Court's diversity jurisdiction. (Docket Entry 1.) Defendants then filed a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, alternatively, to transfer this action pursuant to 28 U.S.C. § 1404(a) to the United States District Court for the Northern District of Georgia. (Docket Entry 8.) The Court ultimately ruled that it does have personal jurisdiction over Defendants, and that Defendants have not met their burden in establishing that transfer is appropriate. (Docket Entry 24.) Thus, Defendants' motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction was denied with prejudice and their alternative motion to transfer was denied without prejudice. (See id. at 60.)^[2]

Thereafter, Defendants filed an answer to the original Complaint and Rhino asserted counterclaims for breach of contract and attorneys' fees. (Docket Entry 25.) Triangle then filed an answer to Defendants' counterclaims. (Docket Entry 26.) Thereafter discovery commenced, Triangle filed an Amended Complaint, and Defendants answered. (Docket Entries 31, 32, 35, 36.) After the close of discovery, Defendants filed the instant motion for summary judgment. (Docket Entry 44.) Triangle thereafter filed an opposition brief (Docket Entry 48), and Defendants filed a reply (Docket Entry 49).

II. FACTUAL BACKGROUND

Titis dispute arises out of a subcontract between Rhino and Triangle regarding Rhino's work on a Georgia Department of Transportation (“GDOT”) construction project for Triangle (the “Subcontract”). (See generally Amended Complaint, Docket Entry 35; see also Subcontract, Docket Entry 5-1.^[[3]]) Triangle was the general contractor on GDOT Project No. 0009993 (the “GDOT Project”). (Am. Compl. ¶ 8.) According to Triangle, the scope of work on the GDOT Project was to provide high friction surface treatment (“E1FST”),^[4] lane markings, striping, and protective barriers on designated portions of Georgia state highways. (Id.) On or about July 18, 2016, Rhino and Triangle entered into the Subcontract (see id. ¶ 9), though the scope of said agreement is in dispute. According to Triangle, “Rhino agreed to perform most of Triangle's scope of work on the [GDOT] Project” which (1) “included application of [HFST] on the [GDOT] Project and testing;” (2) included “ ‘performing] and furnish[ing] all labor, supervision, materials, equipment, tools, transportation, storage and all other things necessary to prosecute and complete' [HFST] on the [GDOT] Project;” and (3) “included the placement of aggregate, and the placement, mixing, and heating of the epoxy.” (Id. ¶¶ 12-13 (citations omitted).) In addition, Triangle alleges that Rhino was required to keep the work site free from waste materials and other debris by removing such debris daily, and also cleaning each area after completing its work. (Id. ¶ 14 (citation omitted).)

Triangle alleges that Rhino both failed to start the project on time and to complete its work on the GDOT Project. (Id. ¶ 16). Triangle alleges that Rhino had issues supendsing its work force and maintaining its equipment. (Id. ¶ 17.) More specifically, Triangle alleges that the truck Rhino used for HFST application repeatedly broke down during the GDOT Project which caused delays in Rhino's work and the entire GDOT Project. (Id. ¶ 18.) Triangle further asserts that Rhino performed some of its work at excess speed which resulted in Rhino's failure to install the correct amount of epoxy on certain portions of its work. (Id. ¶ 19.) In addition, Triangle asserts Rhino failed to clean up the GDOT Project site each day, including failing to remove aggregate buildup. (Id. ¶ 20.)

Next, Triangle alleges that Rhino failed to properly test the work it completed which resulted in Triangle having to re-perform those test and repair Rhino's work and/or agree to take less than full price from GDOT for the work. (Id. ¶ 21.) According to Triangle, Rhino's problems delayed the GDOT Project more than 74 days which resulted in GDOT assessing liquidated damages against Triangle. (Id. ¶¶ 22-23.) Finally, Triangle asserts that on or about September 8, 2017, Rhino walked off the GDOT Project without completing its work under the Subcontract which resulted in Triangle hiring several additional subcontractors to complete and repair Rhino's work. (Id. ¶¶ 24-25.) Triangle alleges that Rhino was provided with notice of its defaults but failed to cure them. (Id. ¶ 26.) As a result, Triangle asserts a cause of action for breach of contract against Rhino and seeks enforcement of a personal guaranty against Mr. Blackstone. (Id. ¶¶ 28-33, 34-39.)

Defendants filed an answer to the Amended Complaint and asserted several defenses to Triangle's claims. (See Docket Entry 36.) Rhino also filed counterclaims for breach of contract and attorneys' fees. (See Counterclaims, Docket Entry 25.)^[5] In its counterclaims, Rhino alleges that it completed all of its duties, obligations and responsibilities in a satisfactory manner under the Subcontract, which was to provide HFST sendees on the GDOT Project including application of the HFST, and Rhino did not breach its Subcontract with Triangle. (Id. ¶¶ 7-11.) Rhino alleges that it is due unpaid invoices in the amount of approximately $566,527.00, for its sendees relating to its work under the Subcontract performed in 2017. (Id. ¶¶ 13-15.) According to Rhino, it has fully performed all conditions precedent and all of its obligations under the Subcontract, Triangle has received payment from GDOT for the GDOT Project, and thus Triangle breached the Subcontract when it failed to pay Rhino all amounts due under the invoices for the work Rhino performed. (Id. ¶¶ 16, 19, 21.) Rhino therefore asserts its own breach of contract claim against Triangle, along with an award of attorneys' fees pursuant to the Georgia Prompt Pay Act (“GPPA”), O.C.G.A. § 13-11-8, and all other applicable laws. (Id. ¶¶ 17-22, 23-26.)

III. STANDARD OF REVIEW

Summary judgment is appropriate when there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Zahodnick v. Int'l Bus. Machs. Corp., 135 F.3d 911, 913 (4th Cir. 1997). The party seeking summary judgment bears the initial burden of coming forward and demonstrating the absence of a genuine issue of material fact. Temkin v. Frederick Cnty. Comm'rs, 945 F.2d 716, 718 (4th Cir. 1991) (citing Celotex v. Catrett, 477 U.S. 317, 322 (1986)). Once the moving party has met its burden, the non-moving party must then affirmatively demonstrate that there is a genuine issue of material fact which requires trial. Matsushita Elec. Indus. Co. Etd. v. Zenith Badio Corp., 475 U.S. 574, 587 (1986). There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a fact finder to return a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Sylvia Dev. Corp. v. Calvert Cnty., Md., 48 F.3d 810, 817 (4th Cir. 1995). Thus, the moving patty can beat his burden either by presenting affirmative evidence or by demonstrating that the non-moving party's evidence is insufficient to establish his claim. Celotex, 477 U.S. at 331 (Brennan, J., dissenting).

When making the summary judgment determination, the Court must view the evidence, and all justifiable inferences from the evidence, in the light most favorable to the non-moving party. Zahodnick, 135 F.3d at 913; Halperin v. Abacus Tech. Corp., 128 F.3d 191,196 (4th Cir. 1997). However, the party opposing summary judgment may not rest on mere allegations or denials, and the court need not consider “unsupported assertions” or “selfserving opinions without objective corroboration.” Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 962 (4th Cir. 1996); see also Anderson, 477 U.S. at 248-49.

IV, ANALYSIS

A. Reconsideration of the Court's Prior Ruling on Defendants' Motion to Dismiss

Defendants first seek reconsideration of the Court's prior ruling on Defendants' motion to dismiss for lack of personal jurisdiction. (Docket Entry 45 at 12-13.) In the April 30 2020 Order, the Court found that Triangle had made a prima facie showing that this Court had specific jurisdiction over non-resident Defendants who “purposefully availed themselves of the protection of North Carolina's laws when they initiated an extended, collaborative relationship by virtue of a subcontract with a North Carolina corporation,” and the exercise of jurisdiction otherwise comports with due process. (Docket Entry 24 at 41; see generally id. at 19-45.) Defendants argue that additional discovery has revealed that “Georgia is the correct...