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Telligent Masonry, LLC v. Continental Casualty Co.

United States District Court, District of Columbia

October 29, 2019




         Grunley Construction Company, Inc. (Grunley) was awarded the prime construction contract (Contract) in 2014 for work related to restoration of the Historic Center Building at St. Elizabeth's West Campus for future occupation by the U.S. Department of Homeland Security (DHS). Compl. [Dkt. 1] ¶ 6. Grunley executed a payment bond with sureties Continental Casualty Company and Liberty Mutual Insurance Company. Id. ¶ 7. On or about November 23, 2015, Grunley and Telligent Masonry, LLC (Telligent) agreed to a subcontract by which Telligent was to perform masonry and related work for compensation of $1, 725, 000.00. Id. ¶ 8. At some point, Grunley directed Telligent to perform additional work which raised the total value of the subcontract to $2, 273, 984.83. Id.

         To date, Grunley has paid Telligent a total of $2, 159, 533.33, which is $114, 451.50 short of the total subcontract value. Id. ¶ 10. On April 17, 2019, Telligent filed suit pursuant to the Miller Act, 40 U.S.C. §§ 3131-34, [1] against the two sureties to recover monies allegedly due. Compl. ¶¶ 20-26. Grunley filed a motion to intervene as of right or by permission pursuant to Federal Rule of Civil Procedure 24; the Court granted the motion to intervene as of right, but permitted Telligent to file a motion to dismiss Grunley's counterclaims. See Order [Dkt. 13]. On July 17, 2019, Telligent moved to dismiss Grunley's counterclaims for lack of subject-matter jurisdiction, or, in the alternative, under the theory of forum non conveniens. The motion is ripe for review.[2]


         A. Subject-Matter Jurisdiction

         Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss a complaint, or any portion thereof, for lack of subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1). When reviewing a motion to dismiss for lack of jurisdiction under Rule 12(b)(1), a court must “assume the truth of all material factual allegations in the complaint and ‘construe the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged.'” Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quoting Thomas v. Principi, 394 F.3d 970, 972 (D.C. Cir. 2005)). Nevertheless, “the Court need not accept factual inferences drawn by plaintiff[ ] if those inferences are not supported by facts alleged in the complaint, nor must the Court accept plaintiff['s] legal conclusions.” Speelman v. United States, 461 F.Supp.2d 71, 73 (D.D.C. 2006). The same logic and analysis are required when evaluating a defendant-intervenor's counterclaim. See United States v. Intrados/Int'l Mgmt. Grp., 277 F.Supp.2d 55, 59 (D.D.C. 2003) (summarizing legal standard for motion to dismiss counterclaim).

         B. Venue

         Under Federal Rule of Civil Procedure 12(b)(3), a defendant may, at the lawsuit's outset, test whether the plaintiff “has brought the case in a venue that the law deems appropriate.” Modaressi v. Vedadi, 441 F.Supp.2d 51, 53 (D.D.C. 2006). “If the plaintiff's chosen forum is an improper venue under applicable statutes, or is otherwise inconvenient, the Court may dismiss the action or transfer the case to a district where venue would be proper or more convenient.” Id. (citing 28 U.S.C. § 1406 (providing for dismissal or transfer when venue is defective) and 28 U.S.C. § 1404 (allowing venue transfer for the convenience of the parties and witnesses)).

         “[W]hen parties have agreed to a forum selection clause, the traditional analysis is altered and the clause should control absent a strong showing it should be set aside.” Gipson v. Wells Fargo & Co., 563 F.Supp.2d 149, 154 (D.D.C. 2008) (quoting 2215 Fifth St. Assoc. v. U-Haul Int'l, Inc., 148 F.Supp.2d 50, 58 (D.D.C. 2001) (internal quotations omitted)); see also M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 12 (1972) (“[Forum-selection] clauses are prima facie valid” and “should be honored by the parties and enforced by the courts.”). Forum selection clauses are to be enforced unless the party resisting enforcement shows that one of the exceptions set forth in Bremen applies. The opponent of enforcement must make a “strong showing” that:

(1) enforcement would be unreasonable and unjust; (2) the clause was invalid for such reasons as fraud or overreaching; (3) enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or judicial decision; or (4) trial in the contractual forum would be so gravely difficult and inconvenient that the plaintiff will for all practical purposes be deprived of his day in court.

Cheney v. IPD Analytics, LLC, 583 F.Supp.2d 108, 118 (D.D.C. 2008) (quoting Bremen, 407 U.S. at 15) (internal quotations omitted)).

         II. ANALYSIS

         The Court granted Grunley's motion to intervene as of right pursuant to Federal Rule of Civil Procedure 24(a), which does not include the requirement that the intervenor demonstrate an “independent basis for jurisdiction.” EEOC v. Nat'l Children's Ctr., Inc., 146 F.3d 1042, 1046 (D.C. Cir. 1998). Had the Court granted Grunley's motion to intervene through permissive intervention, under Federal Rule of Civil Procedure 24(b), Grunley would have had to establish how its contract claims against Telligent presented the Court with subject-matter jurisdiction independent from the Miller Act claims raised by Telligent. See Id. (“The first requirement for permissive intervention-an independent basis for jurisdiction-stems not from any explicit language in Rule 24(b), but rather from the basic principle that a court may not adjudicate claims over which it lacks subject matter jurisdiction.”). With intervention as of right, Grunley's counterclaims may be considered by the Court via its supplemental jurisdiction to hear “claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367(a).

         Telligent argues it is challenging the Court's jurisdiction to address Grunley's claims, but the arguments are properly understood as challenging venue. Telligent cites the dispute resolution section of the Subcontract Agreement between itself and Grunley for the proposition that the proper venue for challenges to the agreement or either party's performance is the Maryland state court located in Montgomery County, Maryland. See Mot., Ex. A, ...

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