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United States v. Hirani Engineering & Land Surveying, PC

United States District Court, District of Columbia

January 10, 2019

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.

          MEMORANDUM OPINION

          Amit P. Mehta, United States District Judge.

         This court did not anticipate that it would need to draft another memorandum opinion in this case-not after issuing a 69-page Findings of Fact and Conclusions of Law (“FFCL”). All that remained after the FFCL was for the parties to submit their respective positions as to a final damages award “consistent with” the FFCL. See FFCL, ECF No. 91, at 69. But apparently by giving the parties an inch, they have decided to take a mile. Instead of relatively straightforward position statements on a final damages calculation, the court received more than 40 pages of detailed legal briefing, with citations to dozens of cases and to Plaintiff's counsel's scholarship. The court already has rejected most of the arguments. Others were not raised until now. The court will not dwell on these arguments for long. But to ensure that the D.C. Circuit fully understands the final award in this case, the court will address the parties' various contentions one last time.

         I.

         A.

         In the FFCL, the court asked Plaintiff American Civil Construction LLC (“ACC”) to determine whether any sums sought in Exhibits 32, 33, and 34, involved costs incurred before April 4, 2011. See FFCL, ECF No. 91, at 49 n.10. ACC confirms that “none of the invoices included [in those exhibits] are for work done or material supplied prior to April 4, 2011.” Pl.'s Reply to Defs.' Objections, ECF No. 95 [hereinafter Pl.'s Reply], at 2; see also Pl.'s Corrected Revised Damages Calculations, ECF No. 93 [hereinafter Pl.'s Cals.], at 3-4. The court likewise has reviewed the exhibits in question, and based on ACC's explanation, agrees that no pre-April 4, 2011 costs are included. Accordingly, the court will not reduce the award amount for costs that predate the parties' subcontract (“Subcontract”).

         Defendants Hirani Engineering & Land Surveying, P.C. and Colonial Surety Company take the opportunity to dissect the damages sought in Exhibits 32, 33, and 34, and ask the court to do the same. See Defs.' Objections, ECF No. 94 [hereinafter Defs.' Objs.]. The court declines to do so. See FFCL at 56 (stating that quantum meruit damages “embrace[] a rough calculation”) (citation omitted). At this juncture, the court will not flyspeck a million-dollar-plus award to determine whether the costs of items such as water and Gatorade are compensable. In any event, the costs that Defendants find objectionable-including basic provisions for field personnel- reasonably qualify as “labor or material in carrying out work provided for in” the Subcontract under the Miller Act. 40 U.S.C. § 3133(b)(1).

         B.

         Defendants object to ACC's asserted amount for field labor, claiming that over $1 million in costs for on-site personnel for 25 months is not reasonable. See Defs.' Objs. at 3-4. Defendants ask the court to reduce that component of the award by 33%. See Id. This contention, however, goes beyond the court's limited direction to the parties following the FFCL. Moreover, although Defendants generally objected to “the necessity or reasonableness of having eight on-site personnel, ” Defs.' Rebuttal, ECF No. 86, ¶ 257, they neither made the specific contentions they do now nor demanded a percentage reduction in recoverable labor costs. Defendants arguments thus come too late.

         In any event, the court is satisfied based on the certified payroll records, the testimony of Irene Stephen, and ACC's Daily Reports that ACC did substantiate its requested labor costs. The certified payroll records can be found at ACC's Exhibit 35. For each such record, Ms. Stephen attested to the accuracy of the information contained therein and the amounts sought by ACC. Ms. Stephen acknowledged that a false statement on the certified payroll could subject “the contractor or subcontractor to civil or criminal prosecution [under] section 1001 of Title 18 and Section 231 of title 31 of the United States [Code].” See, e.g., Pl.'s Ex. 35 at 32, 56, 78, 142. Additionally, at trial, Ms. Stephen testified that the amounts sought as labor costs comprised salary, taxes, and insurance for on-field personnel, and that the amounts billed were for “productive work.” See Day 3 A.M. at 79:18-82:23. The court found Ms. Stephen to be credible. See FFCL ¶ 126. Finally, both the certified payroll and ACC's Daily Reports show that ACC did not use eight workers on the site each work day. Take, for example, October 4, 2011. Payroll records show that only two men worked that day, and ACC's Daily Report shows that other crew members were assigned to another job on that date. See Pl.'s Ex. 35 at 53; Pl.'s Ex. 31 at 540 (showing workers assigned to “Otis Str” project). Such records are consistent with Ms. Stephen's testimony that ACC assigned personnel to the Project worksite when productive work was available but would assign workers to other jobs when there was down time. See Day 3 A.M. At 81:5-82:6 (noting “Otis Street near Catholic University” as another job to which ACC assigned its workers); see also Ex. 31 at 424-25 (showing all personnel assigned to “Ft Lincln” or “Otis Str” projects on July 28, 2011; “ACC Crew #1 NOT ON SITE today; No. productive work available at site”); Ex. 35 at 33-35 (claiming no payroll for July 28, 2011). In short, the court is satisfied that ACC carried its burden of showing compensable labor-related expenses of $1, 024, 019.23.

         C.

         Next, Defendants assert that ACC should receive $0 for standby equipment costs, as such “costs are not recoverable as a matter of law.” Defs.' Objs. at 5. The court extensively addressed this issue already in the FFCL. See FFCL at 53-57. Defendants offer nothing that would warrant the court's reconsideration of its prior decision.

         D.

         Defendants also object to the court awarding a 35% markup on the reasonable value of ACC's services. See Defs.' Objs. at 5-6. Defendants challenge both the legal and factual basis for the court's ruling. The court rejects both contentions.

         First, federal appeals courts have recognized that when, as here, a subcontractor fully performs its obligations but is not paid by the prime contractor, a subcontractor may recover reasonable profits from sureties. See generally U.S. for Use & Benefit of Eastern Waterproofing & Restoration Co., Inc. v. Berkley Regional Ins. Co., 986 F.Supp.2d 660, 665 (D. Md. 2013) (summarizing authorities and explaining that profits are recoverable under the Miller Act when the subcontractor fully performs but is not paid). The Fourth Circuit has said: “[T]he surety is obligated to pay the compensation to which the parties have agreed, although this amount exceeds the costs of labor, materials, and overhead.” U.S. for Use & Benefit of Woodington Elec. Co., Inc. v. United Pac. Ins. Co., 545 F.2d 1381, 1383 (4th Cir. 1976). Similarly, the Fifth Circuit has explained: “If the [subcontractor] has to sue the surety company, the amount of his recovery is measured by the contract sum, and of course the contract sum includes the contractor's profit. If such a contractor cannot include a profit, he would not be in ...


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