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J&B Boat Rental, LLC v. JAG Construction Services, Inc.

United States District Court, E.D. Louisiana

May 18, 2015

J&B BOAT RENTAL, LLC
v.
JAG CONSTRUCTION SERVICES, INC., WESTERN SURETY COMPANY, AND LARRY DOIRON, INC

ORDER AND REASONS

MARY ANN VIAL LEMMON, District Judge.

IT IS HEREBY ORDERED that J&B Boat Rental, LLC's Motion for Summary Judgment (Doc. #32) is DENIED.

IT IS FURTHER ORDERED that Larry Doiron, Inc. and Western Surety Company's Moiton for Summary Judgment (Doc. #33) is DENIED.

BACKGROUND

This matter is before the court on a motion to for summary judgment filed by plaintiff, J&B Boat Rental, LLC. J&B argues that it is entitled to summary judgment because its claim against defendants, Larry Doiron, Inc. ("LDI") and Western Surety Company, satisfies the requirements of the Miller Act, 40 U.S.C. ยง 3131, et seq. LDI and Western Surety filed a cross-motion for summary judgment arguing that J&B should be precluded from maintaining this action because it pursued its claims against former co-defendant, JAG Construction Services, in the context of JAG's bankruptcy proceeding.

On August 18, 2010, the Terrebonne Levee and Conservation District awarded defendant LDI a contract in the amount of $7, 874, 884, pursuant to which LDI agreed to provide services and equipment for the hurricane protection interim flood risk reduction project for the "Morganza to the Gulf of Mexico." The project was funded by the federal government, and, pursuant to the Miller Act, LDI obtained a payment bond from Western Surety, for the contract amount. LDI and JAG entered into a subcontract whereby JAG agreed to perform a portion of the work under the contract. JAG's work required the use of self-propelled vessels to move barges. JAG initially had an oral vessel lease contract with a company that is not a party to this action. That non-party ceased providing services to JAG, and has been compensated.

After JAG's contract with the non-party ended, J&B contacted JAG and offered to provide the vessels for the remainder of JAG's work on the project. JAG and J&B entered into an oral contract whereby J&B agreed to provide services and equipment to JAG for the project. On June 6, 2011, and August 3, 2011, J&B sent invoices to JAG seeking a total of $66, 300 for its services and equipment. J&B claimed that the rental price for the vessels was $300 per hour "around the clock, " or $7, 200 per day. JAG refused to pay the invoices, contending that the rental price to which it agreed was $2, 000 per day. On September 23, 2011, J&B provided notice of its claim to the defendants pursuant to the Miller Act. Thereafter, J&B filed this lawsuit seeking payment of $66, 300, for labor and materials which were furnished or supplied to JAG in connection with the Terrebonne Levee and Conservation District's hurricane protection interim flood risk reduction project for the "Morganza to the Gulf of Mexico."

On April 25, 2012, the defendants filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure arguing that J&B's suit should be dismissed because it failed to state a claim upon which relief can be granted. Specifically, the defendants argued that J&B did not properly allege a breach of contract claim because it failed to allege that JAG and J&B agreed upon the price of $300 per hour "around the clock." The court denied the motion finding that J&B's complaint conforms with Rule 8(a)(3) and the Miller Act by clearly putting the defendants on notice of the claim and stating the amount claimed, for whom the work was done and on which project.

Thereafter, JAG filed for bankruptcy in the United States Bankruptcy Court for the Western District of Louisiana. On September 24, 2012, this action was closed for statistical purposes due to JAG's bankruptcy proceedings.

J&B filed a Notice of Claim in JAG's bankruptcy seeking $66, 300.00 for the work it performed on the project. JAG objected to the amount of the claim.

On April 9, 2013, the bankruptcy court held an evidentiary hearing on JAG's objection to J&B's claim. On July 16, 2013, the bankruptcy judge issued a Memorandum Ruling holding that J&B and JAG "entered into an agreement for the rental of a tugboat and that J&B performed that agreement by providing a tug boat and crew from May 12, 2011, through July 28, 2011." In re JAG Constr. Servs., Inc., 2013 WL 3760113, *2 (Bkrtcy. W.D. La. 7/16/2013). The court found that the value of the work performed by J&B was $48, 046.86, which included an industry daily rate of $2, 200 for the tug and crew and $500 daily rate for an additional captain for 13 days; $12, 840 for fuel and lube; and, $106.86 for groceries. On September 22, 2014, the bankruptcy court issued its Final Decree Order in JAG's bankruptcy, and J&B was paid $3, 661.17 as an unsecured creditor, leaving a balance of $44, 385.69.

On November 17, 2014, this court granted J&B's motion to lift the stay, reopened this action, and dismissed with prejudice J&B's claims against JAG. On March 30, 2015, J&B filed the instant motion for summary judgment arguing that the bankruptcy court's judgment establishes the existence of an oral contract between it and JAG, and the value of the services J&B provided under that contract. J&B contends that, because its claims have been established and it received only $3, 661.17 from JAG, under the Miller Act, it is entitled to recover the remaining amount, $44, 385.69, plus prejudgment interest, costs and post-judgment interest, from LDI and Western Surety.

LDI and Western Surety argue that summary judgment in favor of J&B is inappropriate because they were not parties to the bankruptcy proceeding and did not have the opportunity to assert any defenses to J&B's claim. They argue that J&B should have brought its claims as an adversary proceeding in the bankruptcy court that included not just JAG, but also LDI and Western Surety because they were necessary parties to the claim. LDI and Western Surety contend that J&B does not have any cause of action against them under the Miller Act because JAG was discharged in bankruptcy, paid a portion of J&B's claim and was ...


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