United States ex rel. Am. Civil Constr., LLC v. Hirani Eng'g & Land Surveying, P.C.

263 F.Supp.3d 99

UNITED STATES of America, FOR the USE AND BENEFIT OF AMERICAN CIVIL CONSTRUCTION, LLC, Plaintiff,

v.HIRANI ENGINEERING & LAND SURVEYING, P.C., et al., Defendants.

Case No. 14-cv-00745 (APM)

United States District Court, District of Columbia.

Signed June 27, 2017

Herman M. Braude, Braude Law Group, PC, Washington, DC, for Plaintiff.

David A. Edelstein, Asmer, Schor & McKenna, PLLC, Washington, DC, Florina A. Moldovan, McElroy, Deutsch, Mulvaney & Carpenter, LLP, Morristown, NJ, for Defendants.

MEMORANDUM OPINION

Amit P. Mehta, United States District Judge

Plaintiff American Civil Construction, LLC, has filed suit against Defendants Hirani Engineering & Land Surveying, PC ("Hirani"), and Colonial Surety Company ("Colonial") in connection with its work as a subcontractor on a federal government project. Plaintiff brings a state law claim against Hirani for breach of contract and, separately, seeks relief in the name of the United States against Colonial under the terms of the Miller Act, 40 U.S.C. § 3133, for Hirani’s failure to pay Plaintiff. Plaintiff alleges that it is entitled to recover more than $2 million in damages. Colonial has filed multiple counterclaims in response. Now before the court are Defendants' motions for summary judgment and to strike Plaintiff’s jury demand.

After thorough review of the record, the court denies Defendants' Motion for Summary Judgment but grants Defendants' Motion to Strike Plaintiff’s Jury Demand.

I. BACKGROUND

A. The Prime Contract and Subcontract

On or about September 16, 2010, Defendant Hirani Engineering & Land Surveying, PC ("Hirani"), entered into Contract No. W912DR-10-C-0093 (the "Prime Contract") with the United States of America, through the United States Army Corps of Engineers ("the USACE"), to construct the "Washington D.C. Local Flood Protection Project, 17th Street Closure Structure, Washington D.C." ("the Project"). See Defs.' Mot. for Summ. J., ECF No. 44 [hereinafter Defs.' Mot. for Summ. J.], Defs.' Stmt. of Material Facts, ECF No. 44-1 [hereinafter Defs.' Stmt. of Facts], ¶ 1 (citing Pl.'s Second Am. Compl., ECF No. 26 [hereinafter Second Am. Compl.], ¶ 5). To fulfill its obligations under the Prime Contract, Hirani entered into a written contract on April 4, 2011, ("the Subcontract") with Plaintiff American Civil Construction, LLC, under which Plaintiff would perform specified work ("the Work") on the Project. See Defs.' Mot. for Summ. J., Attach. 3, ECF No. 44-3 [hereinafter Moldovan Decl.], at 7–17 (Ex. B) [hereinafter Subcontract].¹ Consistent with the requirements of the Miller Act, Hirani obtained a payment bond from Defendant Colonial Surety Company ("Colonial") to secure payment to Plaintiff under the Subcontract. See 40 U.S.C. § 3131(b)(2) ; Moldovan Decl. at 4–6 (Ex. A).

The Subcontract outlines each party’s obligations under the agreement, including, but not limited to, a description of the Work; when the Work should begin; and the amount owed Plaintiff for completing the Work. The first clause of the Subcontract states that Plaintiff

shall provide the entire scope of work to construct and manage the 17^th Street closure structure except for the Project Manager and the misc. metal structures/panels as required by Hirani under the base bid to the USACE and related work required (hereinafter the "Work") for the Local Flood Protection Project @ 17^th Street Closure Structure (hereinafter the "Project") located at 17^th Street (hereinafter the "Premises").

Subcontract at 1 (Art. I, § 1.1). Schedules A and B of the Subcontract define the Work more specifically. See id. (Art. I, §§ 1.2, 1.3). For example, Schedule B states that Plaintiff must "[p]rovide project supervision (Superintendent, Site Safety Officer, Traffic Control Officer) except for a project manager to act on behalf of [Hirani]"; "[p]rovide an on-site field office as per the specifications for the USACE"; and "remove, store[,] and reinstall pedestrian light poles throughout construction." Id. at 9 (Sch. B, Pts. 2, 6, 16). Hirani retained the right to change, add, or eliminate portions of the Work "at any time whatsoever, whether the Work or any part thereof shall or shall not have been completed," by written order submitted to Plaintiff, and Plaintiff agreed not to seek "extra or additional compensation on account of any such work, unless same [sic] shall have been done pursuant to a written order signed by" a designated Hirani representative. Id. at 2 (Art. IV, § 4.1). The Subcontract also specifies that:

The scheduling of all construction operations at the Project, including the Schedule, shall be as mutually agreed with [Hirani], and [Plaintiff] shall, if requested, furnish all scheduling information in such form and detail as required by [Hirani], to the satisfaction [Hirani] [sic], and [Plaintiff] shall furnish such information within seven (7) days of request. [Plaintiff] shall also update and/or revise such information as requested by [Hirani] at any time, either prior to or during the performance of its Work.

Id. at 1–2 (Art. II, § 2.2). Additionally, of relevance here, the Subcontract requires Plaintiff, at Plaintiff’s own expense, to clean up the worksite. Plaintiff agreed to

[o]n a daily basis or less frequently, and at [Plaintiff’s] own cost and expense, (1) keep the area of the premises in which the Work is being performed free at all times from all waste materials, packaging materials[,] and other rubbish accumulated in connection with the execution of the Work by collecting and depositing daily said material and rubbish into dumpsters provided on grade by [Hirani], (2) clean and remove from its own work and from all contiguous work of others any soiling, staining, mortar, plaster, concrete or dirt caused by the execution of the Work and make good all defects resulting therefrom, (3) at the completion of its work in each area, perform such cleaning as may be required to leave the area "broom clean" and (4) upon the completion of the Work, remove all of its tools, equipment, scaffolds, shanties, trailers, and surplus materials.

Id. at 3 (Art. VII, § 7.1).

Hirani and Plaintiff’s agreement also set out explicit terms for payment and what to do in the event of a dispute concerning the agreement. The Subcontract states Plaintiff will be paid a fixed sum of $2,845,600.00 for "all labor services, materials, equipment or other items acquired, performed, furnished or used with respect to the Work," which includes all applicable federal, state, and local taxes. Id. at 2 (Art. III, § 3.1). Additionally, Plaintiff agreed not to stop or delay performance of the Work or delivery of labor or materials simply because a "dispute, controversy[,] or question" arose in the interpretation of the Subcontract, but rather, to continue working "pending the determination of such dispute or controversy." Id. at 6 (Art. XIV, § 14.1).

Lastly, the parties contemplated the grounds for contract termination. The Subcontract calls for a different outcome when the agreement is terminated for default than when it is terminated for convenience.

Termination for Default: Should [Plaintiff] fail to timely provide labor, services, and/or materials for the Project in accordance with the terms of this Subcontract, then Hirani shall have the right at any time upon 7 days written cure notice to [Plaintiff] to terminate this Subcontract and require [Plaintiff] to cease work hereunder.

Termination for Convenience: Should the [Government] choose to terminate Hirani for the convenience of the [Government], then [Plaintiff] shall be similarly terminated, and the obligations and rights of the parties shall be in accordance with the provisions of the prime contract for such termination for convenience.

Id. at 6 (Art. XV, § 15.1).

B. Events Arising in the Course of Plaintiff’s Performance

The Project was plagued with delays and disputes, the timeline and substance of which underlie the present litigation. The record begins, for all intents and purposes, when the USACE, by letter dated February 12, 2013, first gave Hirani notice of its intent to terminate the Prime Contract in light of Hirani’s purported failure to perform in the agreed upon timeframe and required Hirani to show cause why the Prime Contract should not be terminated. See Defs.' Stmt. of Facts ¶ 7; Moldovan Decl. at 18–19 (Ex. C).

After receiving the Show Cause Notice, Hirani wrote to Plaintiff.² By letter dated February 18, 2013, Hirani informed Plaintiff of the USACE’s intent to terminate the Prime Contract, requested Plaintiff submit any facts assisting Hirani in demonstrating why the Prime Contract should not be terminated, and stated that "[t]he USACE[’s] contention is that [Plaintiff] has delayed or simultaneously delayed this project and if you believe other wise [sic] you should have been submitting delay schedules and information showing the delay." Moldovan Decl. at 23–26 (Ex. E), at 1 [hereinafter Defs.' Ex. E]. The letter identified several perceived deficiencies in the timeliness and substance of the Work Plaintiff owed under the Subcontract, including that Plaintiff had failed to send Hirani project scheduling information. Id. at 2. Hirani demanded Plaintiff provide a detailed schedule on or before February 22, 2013; cure its deficient performance; and identify any material facts regarding those deficiencies by close of business that day. Id.

Plaintiff responded to Hirani’s letter on February 22, 2013, and disputed that the Work was behind schedule. Plaintiff noted that there is "no contractually required completion date for this project" and "there is not and never has been any mutually agreed upon schedule for any work to be done regarding [Caisson 12] or any other work at the project." Moldovan Decl. at 27–36 (Ex. F), at 1. Additionally, Plaintiff provided an itemized list of 27 causes for the Project’s delay that were outside Plaintiff’s control. See id. at 3–9. Amongst these, Plaintiff cited the Government’s failure to obtain necessary permits and...