United States District Court for the District of Columbia
February 9, 2005.
UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF WALKER SEAL COMPANIES, INC., Plaintiff,
LIBERTY MUTUAL INSURANCE COMPANY Defendant.
The opinion of the court was delivered by: EMMET SULLIVAN, District Judge
OPINION & ORDER
Use-Plaintiff Walker Seal initiated this Miller Act lawsuit
against Sigal Construction, Inc.'s payment bond surety, Defendant
Liberty Mutual, for amounts Walker Seal claims are due plaintiff
for work performed on a project for the United States Department
of Agriculture. Pending before the Court is defendant's Motion to
Dismiss or in the Alternative to Stay Pending Arbitration. Upon
consideration of defendants' motion, the response, reply, and
surreply thereto, and for the reasons stated below, this Court
concludes that defendant's motion should be DENIED and that the
defendant should file a responsive pleading within thirty (30)
days of this Order.
The Miller Act requires contractors doing work with the federal
government to furnish payment bonds with a surety in order to
protect those who provide work or material on the
government project. See 40 U.S.C.A. § 3131. The Miller Act also
provides that subcontractors doing work on a government project
who do not receive payment within ninety days of completion of
the work may bring a civil action on the surety to recover the
unpaid funds. See 40 U.S.C.A. 3133.
According to the complaint, Sigal Construction Corporation
entered into a contract with the United States Department of
Agriculture for the construction of the USDA South Building
Wing 4 Project, located in the District of Columbia. See Compl.
¶ 5. As required by the Miller Act, in order to secure its
payment obligations on the project, Sigal provided a payment bond
for the Project, issued by Liberty Mutual. See Compl. ¶ 6.
Sigal subsequently entered into a subcontract with Walker Seal to
perform certain electrical work on the USDA project. See Compl.
7. Walker Seal alleges that more than ninety days have passed
since completion of its work, and there are outstanding payments
owed by Sigal to Walker Seal. See Compl. ¶¶ 10-13. Thus, Walker
Seal initiated the instant action against Liberty Mutual, the
surety, pursuant to the Miller Act, in order to recover the funds
allegedly owed for Walker Seal's work on the USDA project.
II. Standard of Review
In deciding a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6), the Court "may
consider only the facts alleged in the complaint, any documents
either attached to or incorporated in the complaint and matters
of which the Court may take judicial notice." See EEOC v. St.
Francis Xavier Parochial School, 117 F.3d 621, 624 (D.C. Cir.
1997). If the parties present, and the court considers, matters
outside the complaint, the court will convert the motion to
dismiss to a motion for summary judgment. See Fed.R.Civ.P.
Summary judgment should be granted pursuant to Fed.R.Civ.P.
56 only if no genuine issues of material fact exist and the
moving party is entitled to judgment as a matter of law. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Waterhouse
v. District of Columbia, 298 F.3d 991 (D.C. Cir. 2002). Although
the party opposing the motion may not rely solely on pleadings or
conclusory factual allegations, the Court must resolve
ambiguities and draw all reasonable inferences in favor of the
nonmoving party. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986).
Liberty Mutual filed a motion to dismiss, or in the
alternative, to stay the case pending arbitration. Liberty Mutual
contends that Walker Seal is contractually required under the
terms of the subcontract with Sigal to exhaust its contractual
remedies, including submitting this nonpayment claim
to arbitration, prior to bringing suit. Liberty Mutual maintains
that because Walker Seal has failed to satisfy these contractual
requirements, the complaint should be dismissed or, in the
alternative, stayed pending arbitration. In support of its
motion, Liberty Mutual attached a copy of the subcontract between
Sigal and Walker Seal.
In opposition to the defendant's motion to dismiss or stay,
Walker Seal points to language in the addendum to the subcontract
that "[n]othing herein shall limit the Subcontractor's rights
under Sigal's payment bond or the Miller Act." Walker Seal thus
argues that it is not required to pursue arbitration of its
nonpayment claim before bringing this action under the Miller
Act. In support of this argument, Walker Seal also attached a
copy of the subcontract to its opposition pleading, as well as an
affidavit from James Craft, president of Walker Seal, in which
Mr. Craft states the company's intention behind the addendum
language was to nullify the subcontract's general arbitration
provision with respect to a payment bond claim.
In its reply in support of its motion to dismiss or stay the
case pending arbitration, Liberty Mutual points to other
provisions of the subcontract and other language in the addendum
and counters that the addendum language cited by plaintiff does
nothing to alter Walker Seal's obligations under the subcontract
to submit this dispute to arbitration.
In light of the parties' reliance on matters outside the
complaint, because it appears to the Court that there are genuine
issues of material fact at issue in this case, and resolving
ambiguities and drawing all reasonable inferences in favor of the
plaintiff, it is hereby ORDERED that Defendant Liberty Mutual's
motion is DENIED. It is further ORDERED that Defendant shall
file a responsive pleading by no later than March 9, 2005.
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