United States District Court, District of Columbia
S. CHUTKAN UNITED STATES DISTRICT JUDGE.
Western Surety Company ("Western Surety") sued for
declaratory and injunctive relief to enjoin Defendant U.S.
Engineering Company ("U.S. Engineering") from
compelling arbitration proceedings against Plaintiff and
making a claim on a surety bond issued by Plaintiff. Western
Surety has moved for an order (1) awarding summary judgment
on the sole claim,  (2) declaring that it has no obligation to
U.S. Engineering, and (3) dismissing U.S. Engineering's
counterclaim with prejudice. (ECF No. 29.) U.S. Engineering
has filed a Motion and an Amended Motion for Reconsideration
of the Court's August 31, 2017 Order granting Western
Surety's motion to strike U.S. Engineering's
supplemental authority. (ECF Nos. 45 & 46.) For the
reasons stated herein, U.S. Engineering's motions will be
GRANTED, and Western Surety's motion
will be GRANTED
January 25, 2012, Turner Construction and U.S. Engineering
entered into a contract, under the terms of which U.S.
Engineering was to perform renovation and construction work
at the South African Embassy in Washington, D.C. (ECF No. 35
("7(H)(1) Statement") at ¶ 1.) U.S.
Engineering awarded a subcontract to United Sheet Metal, Inc.
("Sheet Metal") to furnish labor and materials
relating to the installation of sheet metal at the embassy.
(Id. ¶ 2.) At Sheet Metal's request,
Western Surety issued a $585, 000.00 performance bond (the
"Bond") identifying U.S. Engineering as
"Owner," Sheet Metal as "Contractor," and
Western Surety as "Surety." (Id.
¶¶ 3, 4.)
3 of the Bond provided that Western Surety's obligation
would arise after: (1) U.S. Engineering provided notice to
Sheet Metal and Western Surety that it was considering a
declaration of default; (2) U.S. Engineering declared a
default, terminated the contract, and notified Western
Surety; and (3) U.S. Engineering agreed to pay the balance of
the contract price to Western Surety or to a contractor
selected to perform the contract. (Id. ¶ 5.)
With respect to the first requirement, Section 4 of the Bond
explicitly stated that U.S. Engineering's failure to
comply with the notice requirement would neither constitute a
failure to comply with a condition precedent to Western
Surety's obligation nor release Western Surety from its
obligation unless Western Surety demonstrated
prejudice. (Id.) The Bond was silent as to whether
the second two requirements constituted a condition
5 of the Bond detailed the four options that Western Surety
was permitted to take to fulfill its obligation after U.S.
Engineering had satisfied the conditions of Section 3.
(Id.) First, Western Surety could, with U.S.
Engineering's consent, arrange for Sheet Metal to
complete the contract. (Id.) Second, Western Surety
could complete the contract itself, through its agents, or
through its independent contractors. (Id.) Third,
Western Surety could solicit bids from qualified contractors,
arrange for a contractor acceptable to U.S. Engineering to
complete the contract, and pay damages to U.S. Engineering.
(Id.) Fourth, Western Surety could waive its rights
to facilitate completion of the project and either compensate
U.S. Engineering in the amount for which Western Surety was
liable or deny liability entirely. (Id.)
February 2013, issues regarding Sheet Metal's performance
began to arise, and continued through the spring and summer
of 2013, culminating in U.S. Engineering formally terminating
the subcontract on September 9, 2013. (Id.
¶¶ 8, 9.) U.S. Engineering then arranged for
completion of Sheet Metal's work by U.S. Engineering and
four other companies, without the knowledge of Western
Surety. (Id. ¶ 11.) On June 12, 2014, Western
Surety received a notice of claim from U.S. Engineering
advising Western Surety that: (1) Sheet Metal had been
terminated as a subcontractor, and (2) U.S. Engineering had
incurred expenses to complete and correct Sheet Metal's
work. (Id. ¶ 8.)
STANDARD OF REVIEW
judgment is appropriate where there is no genuine issue of
material fact and the movant is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Waterhouse v.
Dist. of Columbia, 298 F.3d 989, 991 (D.C. Cir. 2002).
The moving party bears the "initial responsibility of
informing the district court of the basis for its motion, and
identifying those portions of the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits . . . which it believes demonstrate the
absence of a genuine issue of material fact."
Celotex Corp., 477 U.S. at 323 (internal quotation
marks omitted). The nonmoving party, in response, must
present its own evidence beyond the pleadings to demonstrate
specific facts showing that there is a genuine issue for
trial. Id. at 324.
determining whether a genuine issue of material fact exists,
the court must view all facts in the light most favorable to
the non-moving party. See Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A
fact is material if "a dispute over it might affect the
outcome of a suit under governing law; factual disputes that
are 'irrelevant or unnecessary' do not affect the
summary judgment determination." Holcomb v.
Powell, 433 F.3d 889, 895 (D.C. Cir. 2006) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)). An issue is genuine if '"the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party.'" Id. (quoting
Anderson, 477 U.S. at 248).
U.S. Engineering's Motion for Reconsideration
Engineering asks this court to reconsider its August 31, 2017
order striking from the record its notice of supplemental
authority-an Arbitration Award in favor of U.S. Engineering
and against Sheet Metal. (ECF No. 46-2.) The court sua
sponte struck the authority from the record because U.S.
Engineering's opposition to the motion to strike was
untimely. In its motion for reconsideration, U.S. Engineering
explains that it obtained Western Surety's consent for an
extension of time to respond but neglected to inform the
court of the agreement. (ECF No. 46-1 at 1.) Because U.S.
Engineering received Western Surety's consent before
expiration of the deadline, the court will reconsider its
decision to grant Western Surety's motion to strike.