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Castro v. Fidelity and Deposit Company Co.

United States District Court, D. Columbia.

April 14, 2014

JAVIER LOPEZ CASTRO, et al., Plaintiffs,
v.
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, et al., Defendants

For JAVIER LOPEZ CASTRO, Mr., The District of Columbia for the use and Benefit of, Plaintiff: Robert S. Porter, LEAD ATTORNEY, Omar Vincent Melehy, MELEHY & ASSOCIATES LLC, Silver Spring, MD.

For PEDRO FRANCISCO CAMPOS DE LEON, Mr., The District of Columbia for the use and Benefit of, JESUS AVELAR, Mr., The District of Columbia for the use and Benefit of, Plaintiffs: Robert S. Porter, LEAD ATTORNEY, MELEHY & ASSOCIATES, Silver Spring, MD.

For FIDELITY AND DEPOSIT COMPANY OF MARYLAND, TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA, Defendants: Howard Spessard Stevens, LEAD ATTORNEY, Lisa Danielle Sparks, WRIGHT, CONSTABLE & SKEEN, LLP, Baltimore, MD.

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MEMORANDUM OPINION

JAMES E. BOASBERG, United States District Judge.

Plaintiffs, who worked as laborers for a sub-subcontractor in the construction of a District of Columbia building, allege that they were underpaid for their efforts. They have sued under the federal Davis-Bacon Act (DBA), 40 U.S.C. § 3141 et seq., in an effort to collect against the prime contractor's construction bond, which was secured pursuant to the District of Columbia's Little Miller Act (DCLMA), D.C. Code § 2-201.02 et seq. Defendant insurance companies guaranteed the bond as co-sureties. In moving to dismiss, they now maintain that Plaintiffs are not eligible to sue on the bond, and that even if they were, they have failed to comply with a one-year statute of limitations. Plaintiffs

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counter that they are not only eligible, but that they also benefit from a two-year limitations statute, which applies to suits brought by workers, as opposed to suppliers and sub-contractors. The Court ultimately agrees with Plaintiffs and holds both that they have stated a claim under the DBA and that their action is timely.

I. Background

Plaintiffs were employed by S & J Acoustics, a second-tier subcontractor (or sub-subcontractor) retained to complete ceiling installation on the Consolidated Forensic Laboratory, a building owned by the District of Columbia. See Am. Compl., ¶ ¶ 2, 5. Pursuant to the DBA, 40 U.S.C. § 3141, et seq., and the DCLMA, D.C. Code § 2-201.01, et seq., the project's prime contractor, Whiting-Turner Contracting Co., provided a payment bond to the District of Columbia as an assurance that project laborers would receive payment at Department of Labor-mandated hourly rates. See Am. Compl., ¶ ¶ 3, 8. In bringing this action against Defendants (1) Fidelity and Deposit Company of Maryland and (2) Travelers Casualty and Surety Company of America, who insured Whiting-Turner's bond as co-sureties, see id., ¶ 3, Plaintiffs allege that they were not paid for their contributions to the project in accordance with these designated wage rates. See id., ¶ ¶ 16-18, 21. As background, the DCLMA requires contractors on government-funded projects to secure payment bonds to protect the interests of suppliers of materials and subcontractors, and the DBA establishes prevailing wage rates for workers who contribute to government-funded construction projects.

Prior to initiating this action, Plaintiffs filed an administrative complaint with DOL, requesting that payments to the project's prime contractor be withheld until an investigation could be completed and Plaintiffs compensated for the alleged back wages. See id., ¶ ¶ 23-25. As the project had since wound up and all payments had been released to Whiting-Turner, the DOL investigator closed the case without making any findings on Plaintiffs' eligibility for relief under the DBA. See id., ¶ ¶ 24-25. After Plaintiffs brought suit and Defendants filed their Motion to Dismiss, the Court sua sponte raised the issue of subject-matter jurisdiction, questioning whether Plaintiffs had sufficiently exhausted their administrative remedies with DOL. See Order to Show Cause at 2-3. Out of deference to DOL's plenary role in making DBA back-wage determinations, the Court issued a temporary stay in the proceedings and ordered Plaintiffs to return to DOL and request that conclusive findings be made. See ECF No. 16 (Order) at 4. Plaintiffs did so, but without success. DOL refused to take further action on the ground that the government had already made all payments to the prime contractor and had no further funds to withhold. See Joint Status Report, ¶ ¶ 6-7 & Exh. A. Satisfied that Plaintiffs had made all efforts to exhaust remedies with DOL, the Court concluded that it did have subject-matter jurisdiction under the DBA and could consequently address the substance of their claims and Defendants' pending Motion to Dismiss. See Castro v. Fid. & Deposit Co. of Maryland, No. 13-818, 2014 WL 495464 (D.D.C. Feb. 7, 2014).

Plaintiffs have since moved to amend their Complaint in order to clarify the contractual arrangement in effect between prime contractor Whiting-Turner and S& J Acoustics, Plaintiffs' employer. See Am. Compl., ¶ 5 & Exh. B. The Court permitted the amendment without objection from Defendants, who argue that dismissal is nevertheless appropriate.

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II. Legal Standard

In evaluating a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must " treat the complaint's factual allegations as true . . . and must grant plaintiff 'the benefit of all inferences that can be derived from the facts alleged.'" Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113, 342 U.S.App.D.C. 268 (D.C. Cir. 2000) (quoting Schuler v. United States, 617 F.2d 605, 608, 199 U.S.App.D.C. 23 (D.C. Cir. 1979)) (internal citation omitted); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253, 365 U.S.App.D.C. 270 (D.C. Cir. 2005). The Court need not accept as true, however, " a legal conclusion couched as a factual allegation," or an inference unsupported by the facts set forth in the Complaint. Trudeau v. Fed. Trade Comm'n, 456 F.3d 178, 193, 372 U.S.App.D.C. 335 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)) (internal quotation marks omitted).

III. Analysis

In weighing Defendants' Motion, the Court must consider the respective scopes of application of sections of the three statutes implicated in this case -- namely, § 2-201.02 of the DCLMA, § 3144(a)(2) of the DBA, and § 255 of the Portal-to-Portal Act, 29 U.S.C. § 251, et seq. -- and the interrelationships among them. Application of these statutes, Defendants contend, demonstrates that Plaintiffs do not qualify for any remedy. But even if they did so qualify, Defendants nevertheless maintain that Plaintiffs' suit is untimely.

To support these positions, Defendants offer a number of justifications that intersect and overlap, making them somewhat challenging to parse. What is evident is that this suit poses novel issues, and that neither Plaintiffs nor Defendants have much in the way of precedent to guide them. To date, the opinions that have discussed the DBA, the DCLMA (and its model, the Federal Miller Act), and the PPA have done so in piecemeal fashion, providing only a limited analytical framework for cases such as this one. In responding to Defendants' arguments, therefore, the Court must traverse largely uncharted territory. It thus begins with a discussion of whether a remedy is available under either the DCLMA or DBA and then proceeds to consider the limitations question.

A. Availability of Remedy

Defendants first argue that Plaintiffs cannot invoke the DCLMA to sue on Whiting-Turner's payment bond because eligibility under the statute is restricted to those suppliers of labor and materials that have been retained either by the prime contractor or by an immediate subcontractor. See Mot. to Dismiss at 9; Reply at 1-2. Since Plaintiffs were hired by a second-tier subcontractor, Defendants suggest that they fall outside of the scope of the statute. See Supp. to Mot. to Dismiss at 3.

Defendants further maintain that Plaintiffs also have no remedy under the DBA. They premise this argument on the text of DBA § 3144(a)(2), which provides that " laborers and mechanics have the same right [of] action . . . as is conferred by law on persons furnishing labor or materials." See Reply at 4. The use of the phrase " same right," according to Defendants, demonstrates that § 3144(a)(2) does not actually grant aggrieved workers an independent cause of action, but merely references the applicable bond statute -- in this case, DCLMA § 2-201.02. See Mot. to Dismiss at 9; Reply at 1 (" Plaintiffs do not have separate cause [ sic ] of action against the Defendants in this case under the DBA . . . ." ). ...


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