United States District Court, District of Columbia
DEBORAH A. ROBINSON JUDGE
and Counterclaim Defendant, FMD Restoration, Inc.
(“FMD”), is a Virginia corporation engaged in the
business of providing construction services, including
plumbing, electrical, heating/ventilation/air-conditioning,
site concrete and other related construction services.
Complaint, ECF No. 1, ¶¶ 1-2. Defendant and
Counterclaim Plaintiff, Baistar Mechanical, Inc.
(“Baistar”), is a Virginia general contractor and
government services corporation. See
Counter-Complaint, ECF No. 5-1, ¶¶ 1-2. Baistar was
the prime contractor for three renovation projects at the
Armed Forces Retirement Home (“AFRH”) in
Washington, District of Columbia. See
Baistar’s Amended Pretrial Statement, ECF No. 22 at 1.
Baistar entered into three subcontracts with FMD which
required FMD to perform construction and landscaping services
at the AFRH. See Counter-Complaint ¶¶ 4 -
alleged that Baistar breached the three subcontracts and
refused to pay for work which FMD performed. See
Complaint ¶¶ 11-50. Baistar alleged that FMD ceased
to work on the projects and that consequently, Baistar missed
its own deadlines. See Counter-Complaint
7, 2013, FMD filed a Complaint against Baistar and the
sureties which provided payment bonds in accordance with the
Miller Act, alleging three counts of breach of contract with
respect to the Sheridan Assisted Living Project
(“Sheridan Project”) (Count I), the Eagle Gate
Renovation Project (Count II) and the Quarter 40 Smoking
Shelter Project (Count III). See generally Complaint
¶¶ 11 -49. FMD sought judgment against Baistar in
the amount of $60, 000, plus interest and costs, and for such
other and further relief as this court may deem just and
proper. Id. at 10.
denied FMD’s claims and filed a counterclaim alleging
breaches of contract for the Sheridan Project (Count I) and
the Eagle Gate Project (Count II), and tortious interference
with Baistar’s business expectations of more
construction work at the AFRH facility (Count III).
Baistar’s Counter-Complaint ¶¶ 12 - 54.
Baistar asked that the court enter judgment against FMD for
compensatory damages in the amount of $340, 000, plus lost
profit “or an amount to be determined at trial”;
(Count I); compensatory damages in the amount of $50, 000,
plus lost expectation profit “or an amount to be
determined at trial[, ]” (Count II); and compensatory
damages in the amount of $250, 000 and punitive damages
(Count III). Id.; see also id. at 8-9
(explaining “lost expectation/profit damages” in
the amount of $250, 000 as to Counts I and II).
December 5, 2013, the parties consented to proceed before the
undersigned United States Magistrate Judge for all purposes.
See Notice, Consent, and Reference of a Civil Action
to a Magistrate Judge, ECF No. 18; see also
Referral, ECF No. 19.
bench trial commenced on May 20, 2014 and concluded on May
23, 2014. 05/20/2014; 05/21/2014; 05/22/2014; 05/23/2014
Minute Entries. During the bench trial, the court heard
testimony from (1) Franki Gaspar, owner of FMD; (2) Andrew
Gaspar, president of FMD; (3) Hung Ku Jun, owner of Baistar,
and (4) Israel Cruz, a replacement subcontractor for Baistar
and former subcontractor for FMD, who uses the company name
Delmy General Construction, LLC. See Trial Tr. vol.
1, ECF No. 35, 13, 90, 136 (Franki Gaspar), 150, 183 (Andrew
Gaspar); Trial Tr. vol. 2, ECF No. 34, 61, 140 (Hong Ko Jun),
110, 121, 137 (Israel Cruz); Trial Tr. vol. 3, ECF No. 36, 3,
45, 152, 162, 165 (Hong Ko Jun), 84, 114 (Franki Gaspar),
120, 145 (Andrew Gaspar).
21, 2014, at the close of FMD’s case-in-chief, the
court heard Baistar’s oral Rule 52(c) Motion for
Judgment as a Matter of Law, and granted the motion based
upon the finding that FMD failed to offer evidence sufficient
for the court to find that FMD is entitled to recover with
respect to its claims. See 05/21/2014 Minute Entry;
see also Trial Tr. vol. 2, ECF No. 34, 53-55. The
court confined its findings to issues regarding the
sufficiency of the evidence. Trial Tr. vol. 2, ECF No. 34,
53. In that respect, the court found that the only reasonable
inference to be drawn from the evidence offered by FMD is
that FMD acknowledged that it did not complete the work on
the projects, thereby admitting a breach of the contract.
Id. The court declined to excuse FMD’s breach
on the basis of wrongful termination, or other circumstances
which allegedly may have prevented FMD from performing,
because FMD made no such allegations in its
complaint. Id. at 53-54. The court also
found that FMD, through the testimony of two witnesses, Mr.
Franki Gaspar and Mr. Andrew Gaspar, conceded that their
calculation of damages did not account for Baistar’s
payments made directly to FMD or Baistar’s payments to
others to complete the work that FMD did not complete.
Id. at 54-55.
the court heard and granted Baistar’s oral motion to
voluntarily dismiss Counts II and III of the
Counter-Complaint, pursuant to Rule 41(c) of the Federal
Rules of Civil Procedure, without objection. Id. at
court then resumed the bench trial with respect to Count I of
the Counter-Complaint, the Sheridan Project. Id. In
Count I of the Counter-Complaint, Baistar alleged, inter
alia, that after it paid FMD to work on the Sheridan
Project, FMD failed to perform work, including
“demolition, framing, ceiling and drywall,
installations of fire doors, painting, flooring, kitchen
installation (design/build), plumbing (labor only) electrical
(labor only), piping insulation (labor only), wall
insulation, bedroom/closets door installations (labor only),
installation of hand rail(s) (handicap), and construction of
two spa rooms.” Counter-Complaint, ¶ 29; see
generally, id. ¶¶ 12-32. Baistar
alleges that it either performed these tasks at
Baistar’s expense or retained subcontractors at an
expense of approximately $340, 000. Id. at 30.
close of Baistar’s case-in-chief, the court heard
FMD’s oral Rule 52(c) Motion for Judgment as Matter of
Law, and denied the motion because the court found that FMD
had not carried its burden to show that no evidence had been
offered from which a trier of fact could find in favor of
Baistar. Trial Tr. vol. 3, 79:12-25, 80:1-2. On May 23, 2014,
the court heard closing arguments and the bench trial
concluded. 5/23/2014 Minute Entry; see generally
Trial Tr. vol. 4, ECF No. 37. The parties filed proposed
findings of fact and conclusions of law in accordance with
the court’s scheduling orders.
consideration of the evidence offered at the trial; the
parties’ proposed findings of fact and conclusions of
law, and the entire record herein, the court finds that FMD
breached the subcontract with Baistar for the Sheridan
Project by failing to meet the milestone deadlines. However,
on the basis of the findings and conclusions set forth in
detail herein, the undersigned finds that Baistar failed to
prove actual damages.
FINDINGS OF FACT
The Miller Act
court finds that it has jurisdiction over this action
pursuant to the Miller Act., 40 U.S.C. § 3131, et
seq. “The Miller Act requires a payment and
performance bond on all federal government construction
projects costing over $100, 000.” Window
Specialists, Inc. v. Forney Enterprises, Inc., 106
F.Supp. 3d 64, 69 (D.D.C. 2015). The Miller Act provides, in
pertinent part, that “a general contractor on a federal
construction project must furnish a payment bond to protect
the labor and materials suppliers.” U.S. ex rel.
Tennessee Valley Marble Holding Co. v. Grunley Const.,
433 F.Supp.2d 104, 114 (D.D.C. 2006) (citing 40 U.S.C. §
3131(b)(2)). “To state a valid Miller Act claim, a
plaintiff must prove essentially two elements: (1) it has
‘furnished labor or material in carrying out work
provided for in a contract for which a payment bond is
furnished under section 3131’; and (2) it ‘has
not been paid in full within 90 days.’”
Id. (citing 40 U.S.C. § 3133(b)(1)). The court
finds that FMD stated a valid Miller Act claim and thus
retains supplemental jurisdiction over the claims in
Baistar’s Counter-Complaint. Fed.R.Civ.P.
Scope of Contract for Work on the Sheridan Project
Baistar was a party to a construction contract with the
United States Department of Treasury, Bureau of Public Debt,
for Grounds Maintenance and Snow Removal Services at the AFRH
in the District of Columbia. Counter-Complaint ¶ 3;
see generally HK Jun Test., Trial Tr. vol. 2, 61-
64, 67; Baistar Ex. 28.
Between 2008 and 2012, Baistar and FMD entered into various
subcontracts requiring FMD to perform construction. Jun
Test., Trial Tr. vol. 2, 65: 6 -13.
of the subcontracts was a 2012 subcontract for FMD to perform
construction work for the Sheridan Project at the AFRH.
Stipulated Contract Proposal, FMD Ex. 58; Trial Tr. vol. 4,
Jun testified that he provided detailed specifications for
the Sheridan Project to FMD. Jun Test., Trial Tr. vol. 2, 68:
14-25; Def.’s Ex. 28; 29. Mr. Jun also testified that
he provided detailed drawings for the Sheridan Project to
FMD. Id. at 73: 16-25; Baistar Ex. 31; Baistar Ex.
proposal included (1) the scope of FMD’s work on the
Sheridan Project, as “demolition[, ]” “new
work[, ]” “flooring & tile[, ]” and
“paint[, ]” for “2 level” and
“3 level[, ]” “mechanical & P”
and “electrical [, ]” and (2) provided that
Baistar would pay FMD $331, 360.00 for its performance. FMD
“Demolition” refers to “remov[al] of
objects that are . . . not necessary anymore in order to
[create] space to do new work.” Franki Gaspar Test.,
Tr. vol. 1, 118: 7-11.
Franki Gaspar testified that “New work” means
“installation of new work according to drawings.”
Franki Gaspar Test., Tr. vol. 1, 118:15. He explained that
“New work” refers to the “redesign [of]
rooms, hallway, and bathroom.” Franki Gaspar Test., Tr.
vol. 1, 118: 18.
“New work” also includes “rebuild[ing] and
redo[ing] new work.” It depends on the “state on
the drawing.” Franki Gaspar Test., Tr. vol. 1, 118:
subcontract provided that FMD would “furnish material
and labor - complete in accordance with above specifications,
” for the sum of $331, 360. FMD Ex. 58; Franki Gaspar
Test., Tr. vol. 1, 118: 4-6.
subcontract included three options: (1) “Hallway 3032
New Acc. Ceiling, $4, 350”; (2) “Floor NewTile
$4, 800”; and (3) “handrail Hallway per level $
5, 450.00.” Id.
Baistar concedes that the cost of installing option (3),
“[H]andrail Hallway per level $ 5, 450.00, ” was
not within the scope of the contract. Trial Tr. vol. 4, 95:
parties increased the scope of FMD’s work on the
Sheridan Project to include “core drilling” of
“21 holes at various sizes[.]” FMD Ex. 59.
Baistar agreed to pay FMD $4, 300 for the core drilling work.
Id.; see also F. Gaspar Test., Trial Tr.
vol. 1, 119: 21-25, 120: 1-2.
price for core drilling included all material, labor,
equipment, supervision, and cleanup. FMD Ex. 59.
parties disagree with respect to whether FMD was required to
provide kitchen cabinets as part of its responsibilities
under the Sheridan Project subcontract and offered
Franki Gaspar testified that millwork included
“handrailing, ” benches, “the kitchen area,
” and “all ...