United States District Court, D. Colorado
UNITED STATES OF AMERICA, for the use and benefit of HEGGEM-LUNDQUIST PAINT COMPANY, a Colorado corporation, Plaintiff,
CENTERRE GOVERNMENT CONTRACTING GROUP, LLC, a Colorado limited liability company, BERKLEY REGIONAL INSURANCE COMPANY, a Delaware corporation, KIEWIT BUILDING GROUP, INC., a Delaware corporation, TURNER CONSTRUCTION COMPANY, a New York corporation, KIEWIT-TURNER A JOINT VENTURE, a joint venture doing business in Colorado, TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, a Connecticut corporation, TRAVELERS INDEMNITY COMPANY, a Connecticut corporation, FEDERAL INSURANCE COMPANY, an Indiana corporation, FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Maryland corporation, ZURICH AMERICAN INSURANCE COMPANY, a New York corporation, LIBERTY MUTUAL INSURANCE COMPANY, a Massachusetts corporation, and THE CONTINENTAL INSURANCE COMPANY, a Pennsylvania corporation, Defendants.
RECOMMENDATION ON DEFENDANT BERKLEY REGIONAL INSURANCE COMPANY'S
MOTION TO DISMISS PLAINTIFF'S SECOND CLAIM FOR RELIEF OR, IN THE ALTERNATIVE,
MOTION TO STAY THE PROCEEDINGS (DOCKET NO. 28) AND DEFENDANT CENTERRE GOVERNMENT
CONTRACTING GROUP, LLC'S MOTION TO DISMISS PLAINTIFF'S SECOND CLAIM FOR RELIEF
OR, IN THE ALTERNATIVE, MOTION TO STAY THE PROCEEDINGS (DOCKET NO. 41) AND
KIEWIT-TURNER'S SURETIES'S MOTION TO DISMISS FIRST CLAIM FOR RELIEF AGAINST
KIEWIT-TURNER'S SURETIES, OR, IN THE ALTERNATIVE, MOTION TO STAY (DOCKET NO. 50)
AND KIEWIT-TURNER'S MOTION TO DISMISS FIRST AND FOURTH CLAIMS FOR RELIEF AGAINST
KIEWIT-TURNER, OR, IN THE ALTERNATIVE, MOTION TO STAY (DOCKET NO. 52) AND KIEWIT
BUILDING GROUP'S MOTION TO DISMISS FIRST AND FOURTH CLAIMS FOR RELIEF AGAINST
KIEWIT, OR, IN THE ALTERNATIVE MOTION TO STAY (DOCKET NO. 54) AND TURNER
CONSTRUCTION COMPANY'S MOTION TO DISMISS FIRST AND FOURTH CLAIMS FOR RELIEF
AGAINST TURNER, OR, IN THE ALTERNATIVE, MOTION TO STAY (DOCKET NO. 56)
MICHAEL J. WATANABE, Magistrate Judge.
This case is before this court pursuant to an Order Referring Case (Docket No. 9) issued by Judge Christine M. Arguello on October 21, 2013.
This matter involves a construction project known as the "Replacement Medical Center Facility Project" (the "Project") located at the Aurora, Colorado Department of Veterans Affairs' ("VA") Medical Center. The prime contractor on the Project is defendant Kiewit-Turner a Joint Venture ("Kiewit-Turner"), a joint venture between defendants Kiewit Building Group, Inc. ("Kiewit") and Turner Construction Company ("Turner"). Defendants Travelers Casualty and Surety Company of America, Travelers Indemnity Company, Federal Insurance Company, Fidelity and Deposit Company of Maryland, Zurich American Insurance Corporation, Liberty Mutual Insurance Company, and The Continental Insurance Company (collectively "Kiewit-Turner's Sureties") are K-T's sureties. Defendant Centerre Government Contracting Group, LLC ("Centerre") is a subcontractor to K-T. Plaintiff Heggem-Lundquist Paint Company ("Heggem-Lundquist") is a subcontractor to Centerre. Defendant Berkley Regional Insurance Company ("Berkley") is Centerre's surety.
Heggem-Lundquist asserts the following facts in its Complaint (Docket No. 2). On August 31, 2010, Kiewit-Turner entered into the prime contract with the United States of America for the Project. On September 8, 2010, Kiewit-Turner and Kiewit-Turner's Sureties executed a payment bond. On April 18, 2011, Centerre entered into a contract with Kiewit-Turner making Centerre a first-tier contractor on the Project. On April 19, 2011, Centerre and Berkley entered into a payment bond.
On July 20, 2011, Centerre entered into a contract with Heggem-Lundquist for Heggem-Lundquist to perform framing, drywall, taping and finishing, acoustical ceilings, and painting work for the Project. This contract was originally worth $1, 404, 437, but was later adjusted by at least fifteen change orders to $2, 035, 858.35. To date, Heggem-Lundquist has been paid $1, 550, 297.11. In addition, Heggem-Lundquist has submitted sixty-seven change orders to Centerre, totaling $322, 562.21.
The final 95% to 100% construction documents were issued to Heggem-Lundquist late in the construction project and were incomplete. As a result, Heggem-Lundquist incurred significant labor productivity losses and extended duration costs. After several revisions, on November 16, 2012, Heggem-Lundquist submitted a change order request (COR #3 REV) related to the costs from the 95% to 100% drawings. The costs incurred in COR #3 REV were $1, 939, 007.97, less a partial payment of $190, 143.52, for a net amount of $1, 748, 864.44.
Heggem-Lundquist asserts that Centerre, Kiewit, Turner, and Kiewit-Turner have unreasonably delayed submitting COR #3 REV to the VA and have unreasonably delayed making payments to Heggem-Lundquist for the base contract amount, for COR #3 REV, and for the change proposals. As a result, Heggem-Lundquist has had to carry substantial business loans. In total, Heggem-Lundquist contends it is owed $2, 095, 213.68, plus interest, costs, and attorney fees. Additionally, Heggem-Lundquist seeks consequential damages.
Heggem-Lundquist makes five claims in its Complaint (Docket No. 2): (1) claim against Kiewit, Turner, Kiewit-Turner, and the Kiewit-Turner Surities against the bond issued by the Kiewit-Turner Sureties pursuant to the Miller Act, 40 U.S.C. § 3133(b); (2) breach of contract against Berkley; (3) breach of contract against Centerre; (4) unjust enrichment and quantum meruit against Kiewit, Turner, and Kiewit-Turner; and (5) unjust enrichment and quantum meruit against Centerre.
Now before the court for a report and recommendation are: (1) Defendant Berkley Regional Insurance Company's Motion to Dismiss Plaintiff's Second Claim for Relief Or, in the Alternative, Motion to Stay the Proceedings (Docket No. 28); (2) Defendant Centerre Government Contracting Group, LLC's Motion to Dismiss Plaintiff's Second Claim for Relief Or, in the Alternative, Motion to Stay the Proceedings (Docket No. 41); (3) Kiewit-Turner's Sureties's Motion to Dismiss First Claim for Relief Against Kiewit-Turner's Sureties, Or, in the Alternative, Motion to Stay (Docket No. 50); (4) Kiewit-Turner's Motion to Dismiss First and Fourth Claims for Relief Against Kiewit-Turner, Or, in the Alternative, Motion to Stay (Docket No. 52); (5) Kiewit Building Group's Motion to Dismiss First and Fourth Claims for Relief Against Kiewit, Or, in the Alternative Motion to Stay (Docket No. 54); and (6) Turner Construction Company's Motion to Dismiss First and Fourth Claims for Relief Against Turner, Or, in the Alternative, Motion to Stay (Docket No. 56).
The court has carefully considered the Complaint (Docket No. 2), the subject motions (Docket Nos. 28, 41, 50, 52, 54, and 56), plaintiff's responses (Docket Nos. 65-70), and defendants' replies (Docket Nos. 78-83). In addition, the court has taken judicial notice of the court's file, and has considered the applicable Federal Rules of Civil Procedure and case law. The court now being fully informed makes the following findings of fact, conclusions of law, and recommendations.
Under Rule 12(b)(1), a court may dismiss a complaint for "lack of jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1). The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction. See Basso v. Utah Power & Light Co. , 495 F.2d 906, 909 (10th Cir. 1974). Motions to dismiss pursuant to Rule 12(b)(1) take two forms. First, a party may attack the facial sufficiency of the complaint, in which case the court must accept the allegations of the complaint as true. Holt v. United States , 46 F.3d 1000, 1002-03 (10th Cir. 1995). Second, if a party attacks the factual assertions regarding subject matter jurisdiction through affidavits and other documents, the court may make its own findings of fact. See id. at 1003. A court's consideration of evidence outside the pleadings will not convert the motion to dismiss to a motion for summary judgment under Rule 56. See id.
Under Rule 8(a)(2), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A motion to dismiss pursuant to Rule 12(b)(6) alleges that the complaint fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). A complaint must be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) if it does not plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ... a plaintiff's obligation to provide the grounds' of his entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do...." Id. at 555 (citations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id . "[A] plaintiff must nudge  [his] claims across the line from conceivable to plausible' in order to survive a motion to dismiss.... Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." Ridge at Red Hawk, L.L.C. v. Schneider , 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Twombly , 550 U.S. at 570).
The Tenth Circuit Court of Appeals has held "that plausibility refers to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs have not nudged their claims across the line from conceivable to plausible.'" Khalik v. United Air Lines , 671 F.3d 1188, 1191 (10th Cir. 2012). The court has further "noted that [t]he nature and specificity of the allegations required to state a plausible claim will vary based on context.'" Id . The court thus "concluded the Twombly/Iqbal standard is a middle ground between heightened fact pleading, which is expressly rejected, and ...