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Maxfour Engineers and Architects, LLC v. ARB

February 1, 2006

MAXFOUR ENGINEERS AND ARCHITECTS, LLC, PLAINTIFF,
v.
ARB, INC., DEFENDANT;
ARB, INC., THIRD-PARTY PLAINTIFF
v.
WESTERN HOMES CORPORATION D/B/A SILVERCREST, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Honorable Marcia S. Krieger

OPINION AND ORDER DENYING MOTION TO DISMISS

THIS MATTER comes before the Court pursuant to Third-Party Defendant Western Homes Corp.'s ("Western") Motion to Dismiss (# 37), Third-Party Plaintiff ARB, Inc.'s ("ARB") response (# 39), Western's reply (# 40), ARB's sur-reply (# 44), and Western's sur-sur-reply (# 47).

BACKGROUND

The Plaintiff, a construction contractor, was awarded the prime contract for certain construction work for the United States Bureau of Land Management ("BLM") in Las Vegas, Nevada. The Plaintiff subcontracted a portion of this work out to Defendant/Third-Party Plaintiff ARB. The Plaintiff's Complaint (# 1) asserts two claims against ARB arising out of this subcontract: (i) breach of contract, arising from ARB's failure to pay its suppliers and employees; and (ii) breach of contract, arising from ARB's failure to adequately supervise its subcontractors and perform its work. Included within the second claim is an assertion that ARB failed to adequately supervise the performance and schedule of Third-Party Defendant Western, ARB's supplier of manufactured buildings.

ARB then filed a Third-Party Complaint against Third-Party Defendant Western (# 35), alleging two claims: (i) breach of contract, insofar as Western supplied ARB with buildings that allegedly deviated from the subcontracts' specifications; and (ii) a claim denoted simply as "Third-Party Claim," which appears to sound in contractual contribution and/or indemnity.

Western then filed the instant Motion to Dismiss (# 37), arguing: (i) that the Court lacks subject-matter jurisdiction over the Third-Party Complaint, insofar as ARB and Western are not diverse; (ii) that Western is not subject to personal jurisdiction in Colorado; and (iii) that contribution/indemnity claim in the Third-Party Complaint fails to state a claim. ARB responded, contending that: (i) because the Court exercises diversity jurisdiction over the primary dispute between the Plaintiff and ARB, it may exercise supplemental jurisdiction over the Third-Party claims pursuant to 28 U.S.C. § 1367; (ii) Western has sufficient contacts with the State of Colorado to permit the exercise of personal jurisdiction against it; and (iii) it properly stated a claim for contribution/indemnity.*fn1 In reply, Western conceded several of its initial arguments, and tendered new arguments: (i) that ARB had not plead a proper third-party claim under Fed. R. Civ. P. 14(a) because neither of its third-party claims were derivative of the primary claim by the Plaintiff against ARB; (ii) that supplemental jurisdiction over ARB's contractual claim does not exist because it does not arise from the same facts as the primary claim by the Plaintiff; (iii) that the Court should decline to assert supplemental jurisdiction over the breach of contract claim; and (iv) that disputes under the contracts between ARB and Western are subject to arbitration. Shortly thereafter, ARB and Western discussed the issues further, and concluded that the major issue requiring the Court's determination was whether the contribution/indemnity claim was properly brought under Fed. R. Civ. P. 14(a), and that additional briefing on that question was necessary. They agreed to permit ARB to file a sur-reply, and Western to file a sur-sur-reply. ARB's sur-reply argued that resolution of that question turned on which state's laws were applicable to the claim, and argued extensively that California law should apply.*fn2 Turning briefly to the merits, it argued that under California law, "the contractual relationship between ARB and [Western] is sufficient to support" the contribution/indemnity claim. Citing Nomellini Constr. Co. v. Harris, 272 Cal.App.2d 352 (Cal. App. 1969). Western then filed its sur-sur-reply. Rather than engaging in the same choice of law analysis or disputing that California law should apply,*fn3 Western instead argues that the Nomellini case relied upon by ARB is immaterial, as that case involved the doctrine of equitable indemnity, and ARB had already disclaimed asserting an indemnity claim. Western further argued that California had abrogated the doctrine of equitable indemnity following Nomellini, permitting only contractual indemnity. Finally, Western argued, in a single sentence, that it agreed only to indemnify ARB for injuries to persons or property.

ANALYSIS

At the outset, the Court is compelled to express its concern that, despite the extensive briefing in conjunction the subject motion, the parties were unable to precisely clarify the issues in dispute, much less present the Court with well-formed arguments and competing analyses on those issues. The chain of briefs memorialize the process of discussion and focusing of the issues by counsel that D.C. Colo. L. Civ. R. 7.1(A) is intended to achieve before any motion is filed. As is ultimately revealed by the parties' sur-replies, counsel actually disagree less than they thought, and the exploration of positions for which there apparently is no controversy has needlessly cost the Court and the clients time and money. Nevertheless, because the issues in dispute appear to be relatively simple and straightforward, the Court is able to rule despite the parties' unfocused briefing.

A. Standard of Review

Although initially presented as a jurisdictional issue, it appears that the crux of Western's argument is that ARB's claim for contribution/indemnity fails to state a viable claim under Fed. R. Civ. P. 12(b)(6). In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all well-plead allegations in the Complaint as true and view those allegations in the light most favorable to the nonmoving party. Stidham v. Peace Officer Standards and Training, 265 F.3d 1144, 1149 (10th Cir. 2001), quoting Sutton v. Utah State Sch. For the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999). The Complaint should not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Benefield v. McDowall, 241 F.3d 1267, 1270 (10th Cir. 2001); GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). The Court must limit its review to the four corners of the Complaint, but may also consider documents attached to the Complaint as exhibits, Oxendine v. Kaplan, 241 F.3d 1272, 1275 (10th Cir. 2001), as well as unattached documents which are referred to in the Complaint and central to the plaintiff's claim, so long as the authenticity of such documents is undisputed. Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002); Dean Witter Reynolds, Inc. v. Howsam, 261 F.3d 956, 961 (10th Cir. 2001).

B. Matters not in Dispute

At this stage, it may be helpful to review those areas upon which the parties do not appear to disagree. Fed. R. Civ. P. 14(a) permits third-party practice where third-party defendant "is or may be liable to the third-party plaintiff for all or party of the plaintiff's claim against the third-party plaintiff." A claim under Rule 14(a) must depend, at least in part, upon the resolution of the primary lawsuit. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 376 (1978). Because third-party practice under Rule 14(a) is based on the same core set of facts that animate the primary dispute, a court having subject-matter jurisdiction over the primary dispute also has jurisdiction over the dispute between the defendant/third-party plaintiff and the third-party defendant. Wright, Miller et al., Federal Practice and Procedure, Civil 2d § 1444.

The parties also appear to agree that California law governs ARB's claims. See Docket # 40 at 7 (Western's argument that "California[ ] law will govern resolution of ARB's contract claims"); Docket # 44 at ΒΆ 10 (ARB's argument that "ARB's Rule ...


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