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Regional Construction L.L.C. v. City of Monroe

United States District Court, W.D. Louisiana, Monroe Division

December 4, 2017

REGIONAL CONSTRUCTION, L.L.C.
v.
CITY OF MONROE

          ROBERT G. JAMES JUDGE.

          REPORT AND RECOMMENDATION

          KAREN L. HAYES UNITED STATES MAGISTRATE JUDGE.

         Before the undersigned magistrate judge, on reference from the district court, is a motion to dismiss for lack of subject matter jurisdiction, Federal Rule of Civil Procedure 12(b)(1), [doc. # 8] filed by defendant City of Monroe. The motion is opposed. For reasons assigned below, it is recommended that the motion be GRANTED, and that plaintiff's complaint be dismissed, without prejudice.

         Background

         On August 10, 2017, Regional Construction, L.L.C. (“Regional”) filed the instant complaint against the City of Monroe (the “City”). According to the complaint,

[the] City elected to undertake a project to rehabilitate approximately 2300 feet of drainage piping located on the east side of runway 18-36 [of the regional airport facility] that began at the intersection of that runway and Taxiway D and continued south until the piping intersected with an abandoned runway on the south side of the airport (“Project”) and there connected with an existing drainage pipe owned, operated and maintained by the City . . .

(Compl., ¶ 6).

         The City obtained funding for the Project through a grant-in-aid program, the Airport Improvement Program (“AIP”), administered by the Federal Aviation Administration (“FAA”). Id., ¶ 7. Pursuant to the City's participation in the AIP, the FAA required that certain provisions/specifications from the Code of Federal Regulations be incorporated into the Project contract. Id., ¶ 8.

         The City contracted with Denmon Engineering (“Denmon”) to prepare the Project bidding documents and specifications. Id., ¶ 10. On November 8, 2016, the City awarded the Project to Regional, and the City and Regional entered into a construction contract (the “Contract”), effective November 10, 2016. Id., ¶¶ 14-15. Some time after March 20, 2017, Regional commenced work on the Project. Id., ¶¶ 16-17.

         As it began the excavation work, Regional quickly encountered significant amounts of groundwater that precluded the proper bedding of pipe and prevented its ability to backfill and stabilize the pipe. Id., ¶ 20. Regional contends that the site condition was not reflected on the Project plans. Id., ¶ 21. According to Regional, investigation revealed that the City interfered with Regional's performance under the Project by failing to maintain and clear the Outfall Pipe, thereby causing groundwater to back-flow into the Project. Id., ¶ 22. Despite these findings by Regional and Denmon, neither the City, nor Denmon, took any steps to redress the differing site conditions. Id., ¶ 23. The unfettered flow of water via the Outfall Pipe ultimately led to a work stoppage by Regional. Id., ¶ 24.

         After one month of work, Regional submitted its payment application for work performed and materials used in April based on percentages of completion pursuant to section 90-06 of the federal specifications incorporated into the Contract. See Compl., ¶ 25. The City approved Regional's April payment application in early May and advised that payment would be forthcoming. Id., ¶ 27. However, the City never made the payment. Id. ¶¶ 27-28.

         According to Regional, the City claimed that payment under the Contract could be made only pursuant to sections 701-4.1 and 701-5.1 of the federal specifications, which provide for payment on the basis of linear feet of pipe in place, completed, and approved. See Compl., ¶ 29; Advisory Circular, §§ 701-4.1 and 701-5.1; Response to M/Dismiss, Exhs. A & B.

         Regional ceased work on the Project in mid-May when the City failed to remit the partial payment due for work performed in April. Id., ¶ 31. Regional also submitted an application for partial payment for the stored materials purchased and placed on the job site. Id., ¶¶ 33-34. The City, however, did not remit payment for the materials to Regional, and instead, paid Regional's suppliers directly. Id., ¶¶ 35-36.

         Because of the non-payment of the April payment application, Regional provided the City with requisite notice to terminate the Contract. Id., ¶¶ 37-38. Despite the notice, the City never paid any funds to Regional within the period specified by the Contract. Id., ΒΆ 39. After issuance of the notice of termination, the City rejected Regional's work performed under the Contract because the piping was not properly back-filled. ...


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