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American Construction, LLC v. Fort Myer Construction Corp.

United States District Court, District of Columbia

March 29, 2017

AMERICAN CONSTRUCTION, LLC, Plaintiff,
v.
FORT MYER CONSTRUCTION CORPORATION, Defendant. Re Document Nos. 20, 21, 27, 29

          MEMORANDUM OPINION

          RUDOLPH CONTRERAS, United States District Judge

         Denying Defendant's Motion for Summary Judgment; Granting Defendant's Motion to Dismiss; Denying Plaintiff's Cross-Motion for Partial Summary Judgment; Denying Defendant's Motion to Strike as Moot

         I. INTRODUCTION

         This action arises from a dispute between two construction companies. Plaintiff American Civil Construction, LLC (“ACC”) alleges that Defendant Fort Myer Construction Corporation (“Fort Myer”) breached a subcontract for work related to the District of Columbia's new streetcar system. After a period of discovery, Fort Myer filed a motion to dismiss for lack of subject matter jurisdiction and a motion for summary judgment. In response, ACC cross-moved for partial summary judgment on two discrete issues. Because the Court finds that ACC brought suit despite failing to acquire the proper registration with the District, the District's door closing statute deprives the Court of subject matter jurisdiction. But the Court will permit ACC an opportunity to file a supplemental complaint within thirty days to attempt to cure the jurisdictional problem. Finally, the Court finds that genuine issues of material fact preclude granting summary judgment to either party.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         The Court will begin with a description of the allegations found in ACC's Complaint before turning to other relevant facts and the procedural history of this action.

         A. Allegations of the Complaint[1]

         According to the Complaint, American Civil Construction, LLC, is a limited liability company organized under the laws of Maryland, with its principal place of business in Maryland. Compl. ¶ 1, ECF No. 1. ACC is in the business of construction contracting. Compl. ¶ 1. Fort Myer Construction Corporation is a corporation organized under the laws of Virginia, with its principal place of business in the District of Columbia. Compl. ¶ 2. Fort Myer is also in the business of construction contracting, and regularly does business in the District. Compl. ¶ 2.

         ACC's allegations are related to the construction of a streetcar project in the District. Compl. ¶ 4. Specifically, Fort Myer entered into a contract with the D.C. Department of Transportation (“DDOT”) referred to as the “Construction of Anacostia Initial Line Segment and Operation and Maintenance Facility, and Reconstruction of Firth Sterling Avenue - Milestone B” (“Anacostia Project”). Compl. ¶ 5. Fort Myer, the prime contractor, entered into a subcontract with ACC for the construction of foundations and the installation of ground rods and conduits. Compl. ¶ 6. Originally, the value of the work described in the subcontract was $649, 161, but change orders increased that figure to $1, 052, 878.17. Compl. ¶ 6.

         In a letter dated October 26, 2012, Fort Myer stated that it was terminating the subcontract with ACC “for convenience, ” even though the subcontract work was not yet completed. Compl. ¶ 8. ACC alleges that the terms of the subcontract only allow for termination “for convenience, ” if DDOT also terminated its prime contract with Fort Myer “for convenience” first. Compl. ¶ 9. ACC alleges, however, that the prime contract between DDOT and Fort Myer was not terminated. Compl. ¶ 10.

         ACC alleges that it wrote to Fort Myer and stated that the termination of the subcontract was wrongful and that ACC was prepared to complete the work described in the subcontract. Compl. ¶ 11. Fort Myer refused that offer, which ACC alleges was a breach of the subcontract. Compl. ¶ 12. ACC alleges that it was entitled to overhead and profit on the work it performed under the subcontract, but that Fort Myer has not made those payments. Compl. ¶¶ 9, 13.

         ACC alleges that, before the termination of the subcontract, it performed work that was outside of the scope of the subcontract. Compl. ¶ 14. All of that work was “performed at the direction and with the knowledge and agreement of” Fort Myer. Compl. ¶ 14. Fort Myer had a duty to process change orders related to that work, but Fort Myer refused to process and pay the change order requests that ACC submitted. Compl. ¶ 15. ACC alleges that this refusal constituted an additional breach of the subcontract. Compl. ¶ 15.

         Finally, ACC alleges that retainage was withheld from Fort Myer's payments to ACC. Compl. ¶ 16. ACC alleges that the full amount of the withheld retainage has not been paid to ACC. Compl. ¶ 17. In light of all of these allegations, ACC concludes that it has performed all work available to it under the subcontract, and that Fort Myer's breach has caused damages. Compl. ¶¶ 18-19. ACC thus requests $300, 000 in damages, as well as interest and costs. Compl. at 4.

         B. Facts in the Record

         The parties have presented a range of evidence in connection to the motions for summary judgment, including relevant documents and various declarations. ACC provides a letter dated May 28, 2009, from Fort Myer to ACC's then-Principal, Edward F. Hollander, that encloses a copy of the subcontract at issue in this case. See Pl.'s Resp. Def.'s Mot. Summ. J. & Cross-Mot. Partial Summ. J. (“Pl.'s Opp'n & Cross-Mot. Summ. J.”), Ex. 4 at 1, ECF No. 24-4.[2] The portions of the subcontract included in the record make clear that the subcontract related to a prime contract between Fort Myer and DDOT for work on the Anacostia Project. See Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 4 at 2. An addendum to the standard form agreement states that “[t]he Contractor may at any time terminate Subcontractor upon reasonable notice, for Contractor's convenience.” Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 4 at 4-5, ¶ 7.3. But an attachment listing modifications to the terms of the addendum states that paragraph 7.3 of the addendum is struck, deleted, and replaced with: “The Contractor can only terminate the Subcontractor for convenience if the Owner similarly terminates the Contractor.” Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 4 at 7, ¶ 7.3.

         On October 12, 2010, DDOT sent a letter to Fort Myer that set forth a significant change to the scope of the prime contract. Def.'s Opp'n Cross-Mot. Partial Summ. J., Ex. A at 1, ECF No. 28. The letter stated that “[t]he remaining scope of work on this Contract is limited to the work identified in this Article 3 Letter, and the Contractor shall not perform any other work, unless it receives written authorization.” Def.'s Opp'n Cross-Mot. Partial Summ. J., Ex. A at 1.

         In turn, Fort Myer sent a letter to its subcontractor, ACC, dated October 26, 2010. Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 2 at 1, ECF No. 24-2. Fort Myer stated that DDOT had “suspended” the prime contract through its October 12 letter and “deleted portions of its scope.” Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 2 at 1. Fort Myer explained that DDOT had since directed Fort Myer to resume work on the Anacostia Project, but that, in light of the changed scope of the contract, Fort Myer would terminate its subcontract with ACC “for convenience.” Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 2 at 1. ACC responded by letter dated November 7, 2012. See Def.'s Statement of Undisputed Facts, Ex. A at 1, ECF No. 20. ACC's letter was drafted by Michael J. Jack, outside counsel who represents ACC in this litigation. Def.'s Statement of Undisputed Facts, Ex. A at 1. The letter noted that when Mr. Hollander contacted Kathi Muttart, a Fort Myer employee, she advised that all communications should be directed to Christopher M. Kerns, the Vice President and General Counsel for Fort Myer. Def.'s Statement of Undisputed Facts, Ex. A at 1. The letter also argued that the subcontract did “not give [Fort Myer] the right to terminate for convenience, except where [Fort Myer] has been terminated by the owner.” Def.'s Statement of Undisputed Facts, Ex. A at 1. The parties exchanged additional letters through their counsel. See, e.g., Def.'s Opp'n Cross-Mot. Partial Summ. J., Ex. C at 1 (letter from Fort Myer's Associate General Counsel to Mr. Jack dated November 9, 2012); Pl.'s Opp'n & Cross-Mot. Summ. J., Ex. 2 at 4-5 (letter from Mr. Jack to Fort Myer's Associate General Counsel dated November 30, 2012).

         On November 20, 2014, ACC and Fort Myer executed a two-page document titled “Subcontractor's Affidavit and Final Waiver of Lien.” Decl. of Thomas Mero, Ex. A (“Final Waiver of Lien”) at 1, ECF No. 20. The document referred to the contract between Fort Myer and ACC for work on the Otis Street Project.[3] Final Waiver of Lien at 1. The release did not specifically mention the Anacostia Project. See generally Final Waiver of Lien. The release called for Fort Myer to pay ACC $10, 000. Final Waiver of Lien at 1. In consideration for the payment, ACC promised to:

Release and forever discharge Fort Myer of and from all debts, claims, demands, liabilities and causes of action of every character whatsoever arising out of or in connection with subcontract or any other work performed by subcontractor on any project except as follows: (there are no exceptions unless specific claims in stated amounts are listed):

         Final Waiver of Lien at 2. Following that paragraph, handwritten notes purportedly written by Edward Hollander, the late owner of ACC, list “AS-BUILTS PURCHASE ORDER $4, 000 - (LESS APPROX $3, 600 OWED BY ACC ON ANOTHER PROJECT) FOR NET OF ABOUT $400 (SEPARATE MATTER).” Final Waiver of Lien at 2.

         Pursuant to the release, Fort Myer made payments of $10, 000 and $4, 000 to ACC in November 2014. Decl. of Thomas Mero ¶ 11. ACC made a payment of $3, 600 to Fort Myer around the same time. Decl. of Jennifer Lawson ¶ 8, ECF No. 20. Evidence provided by the parties suggests that both ACC and Fort Myer accepted compromise payments when they agreed to the release. A representative for ACC states that, “[a]s of November, 2014, the amount which ACC considered outstanding and claimed on the Otis Street Project was $22, 000.00.” 2d Decl. of Irene Stephen ¶ 4, ECF No. 24-1. A representative for Fort Myer states that, “[i]n or around November, 2014, [ACC] owed Fort Myer . . . the amount of $4, 348.10 relating to various project[s], but not related to [the Otis Street Project].” Decl. of Jennifer Lawson ¶ 8.

         The parties agree that Mr. Hollander died sometime after the release was executed. See Pl.'s Opp'n & Cross-Mot. Summ. J. at 5; Def.'s Reply Supp. Mot. Summ. J., at 1 n.2, ECF No. 26.

         C. Proceedings in this Court

         ACC brought suit in this Court on April 8, 2015. See generally Compl. After Fort Myer answered the Complaint, the Court entered a scheduling order to govern discovery in this case on June 18, 2015. See generally Scheduling Order, ECF No. 8. The parties engaged in mediation, but those efforts were fruitless. See Order Referring Case to Magistrate Judge for Mediation, ECF No. 10. Upon the parties' request, the Court entered a schedule for dispositive motions, with any dispositive motions to be filed on or before August 1, 2016 and any oppositions to be filed on or before August 30, 2016. See Min. Order (June 14, 2016).

         On August 1, 2016, Fort Myer separately filed a motion to dismiss and a motion for summary judgment. See generally Def.'s Mot. Summ. J., ECF No. 20; Def.'s Mot. Dismiss for Lack of Subject Matter Jurisdiction (“Def.'s Mot. Dismiss”), ECF No. 21; see also Def.'s Mem. P. & A. Supp. Mot. Dismiss (“Def.'s Mem. Supp. Mot. Dismiss”), ECF No. 22; Def.'s Mem. P. & A. Supp. Mot. Summ. J. (“Def.'s Mem. Supp. Mot. Summ. J.”), ECF No. 20. In its response to the motion for summary judgment, ACC included a cross-motion for partial summary judgment. See generally Pl.'s Opp'n & Cross-Mot. Summ. J.[4] Fort Myer filed a motion to strike the cross-motion, arguing that the cross-motion was filed after the Court's deadline for dispositive motions. See generally Def.'s Mot. Strike Pl.'s Cross-Mot. Partial Summ. J. (“Def.'s Mot. Strike”), ECF No. 27. The Court now turns to those pending motions.[5]

         III. DISCUSSION

         The Court begins its analysis with Fort Myer's motion to dismiss for lack of subject matter jurisdiction. For the reasons set forth below, the Court will grant the motion to dismiss, but permit ACC an opportunity to file a supplemental complaint to cure any jurisdictional defect. The Court next considers Fort Myer's and ACC's motions for summary judgment in turn. The Court finds that genuine questions of material fact preclude granting summary judgment to either party.

         A. Subject ...


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