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Siboney Contracting Co. v. Berkley Insurance Co.

United States District Court, E.D. Louisiana

February 28, 2018

SIBONEY CONTRACTING CO.
v.
BERKLEY INSURANCE CO., ET. AL.

         SECTION “B” (4)

          ORDER AND REASONS

         Before the Court is Defendant Berkley Insurance Company's (“Berkley”) Motion to Dismiss Plaintiff Siboney Contracting Company's (“Plaintiff”) Miller Act, Federal Prompt Payment Act, and declaratory judgment claims pursuant to F.R.C.P. 12(b)(6) (Rec. Doc. 7), Plaintiff's Response in Opposition (Rec. Doc. 13), and Berkley's Motion for Leave to File Reply (Rec. Doc. 14). For the reasons discussed below, IT IS ORDERED that the Motion to Dismiss (Rec. Doc. 7) is GRANTED in Part and DISMISSED in Part;

         IT IS FURTHER ORDERED that Berkley's Motion for Leave to File Reply (Rec. Doc. 14) is hereby GRANTED and all proposed pleadings are hereby filed into the record.

         Facts and Procedural History

         On September 23, 2016, Plaintiff (as subcontractor) entered into a contract with Defendant Tikigaq Construction, L.L.C. (as contractor), in which Plaintiff agreed to haul sand to the United States Army Corps of Engineers project referred to as the WBV-EVM-78. Rec. Doc. 1 at 3. Pursuant to the requirements of 40 U.S.C. § 3131(b)(2), Tikigaq received a payment bond issued by Berkley to secure Tikigaq's payment of its obligations to its subcontractors.

         Plaintiff's alleges that Plaintiff and Tikigaq originally agreed that Plaintiff would haul the sand at a fixed price of $4.82 per cubic yard. Rec. Doc. 1 at 3. However, prior to Plaintiff's commencing performance Tikigaq requested that payment be fixed, in writing, at the same $4.82 rate, but “by the ton” rather than by the cubic yard. Id. Plaintiff agreed to this proposal through a text message conversation with a representative of Tikigaq. Rec. Doc. 1 at 3-4.

         Plaintiff alleges that after months of performing in accordance with this arrangement Tikigaq attempted to negotiate a lower rate for the past rendered performance. Rec. Doc. 1 at 4. While Plaintiff responded that it would not negotiate the price of the sand it had already hauled, it would apply a discounted rate to work performed in the future. Rec. Doc. 1 at 4. Plaintiff alleges that Tikigaq stopped its payments to Plaintiff immediately following this discussion, resulting in two unpaid invoices-one for $29, 356.90 billed by the ton and another for $2, 287.50 billed at a rate of $75.00 per hour-totaling $31, 644.40. Rec. Doc. 1 at 4.

         On May 15, 2017, Plaintiff demanded payment of the outstanding debt to the U.S. Army Corps of Engineers, Tikigaq, and Berkley through a Miller Act Notice; Plaintiff states that it received no response to this notice. Rec. Doc. 1 at 5. Plaintiff then sent a demand letter to Berkley on the payment bond on June 23, 2017, which Berkley acknowledged on June 26, 2017, stating that it would investigate the claim. Rec. Doc. 1 at 5. On July 17, 2017, Tikigaq sent a letter alleging that Plaintiff owed it $131, 883.60 as a result of overbilling and that it would retain the disputed $31, 644.41 allegedly owed to Plaintiff as an offset. Rec. Doc. 1 at 5. Berkley adopted Tikigaq's position on the matter in August 2017.

         On September 27, 2017, Plaintiff filed suit against Berkley and Tikigaq, seeking recovery of the $31, 644.41 as well as attorney's fees under the Miller Act, the federal Prompt Payment Act, La. R.S. § 9:2781 (Louisiana's Open Account Statute), La. R.S. § 9:2784 (Louisiana's Late Payment by Contractor Law), breach of contract, and quasi-contract claims. Rec. Doc. 1 at 6-9. Plaintiff also seeks a declaratory judgment that Tikigaq was not overbilled by Plaintiff, and that Plaintiff owes Tikigaq no obligations, including reimbursement of money already paid. Rec. Doc. 1 at 10. Berkley filed an answer to this complaint on December 20, 2017; Tikigaq has yet to respond.

         In conjunction with its answer, Berkley filed the instant motion to dismiss Plaintiff's Miller Act, federal Prompt Payment Act, and declaratory judgment claims pursuant to F.R.C.P. 12(b)(6) on the grounds that Plaintiff has stated no cause of action for which relief can be granted. Rec. Doc. 7-1.

         LAW AND ANALYSIS

         A. Standard for 12(b)(6) Motion

         A defendant may move to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure. The court will grant a 12(b)(6) motion if the plaintiff “has not set forth a factual allegation in support of his claim that would entitle him to relief.” Masonry Sols. Int'l, Inc. v. DWG & Assocs., Inc., 2016 WL 1170149, at *2 (E.D. La. Mar. 25, 2016) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In order to survive a 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

         B. Failure to Bring Miller Act Claim in the Name of ...


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