United States District Court, D. Colorado
THE UNITED STATES OF AMERICA for the use and benefit of FISHER SAND AND GRAVEL CO. d/b/a Arizona Drilling and Blasting, and FISHER SAND AND GRAVEL CO. d/b/a Arizona Drilling and Blasting, Plaintiffs,
KIRKLAND CONSTRUCTION, LLP, and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, Defendants
Decided, December 17, 2014
[Copyrighted Material Omitted]
For Fisher Sand and Gravel Co., The United States of America for the use and benefit of Fisher Sand and Gravel Co, an Arizona corporation, doing business as Arizona Drilling and Blasting, a North Dakota corporation, Plaintiff: Kevin John Bonner, LEAD ATTORNEY, Troy Robert Rackham, William James Garehime, Jr., Fennemore Craig, P.C.-Denver, Denver, CO.
For Kirkland Construction, LLP, a Colorado company, Travelers Casualty and Surety Company of America, a Connecticut corporation, Defendants: Amanda Brooke Janulis, Jason Patrick Kane, Richard Paul Ranson, Ranson & Kane, PC, Colorado Springs, CO; Troy Robert Rackham, Fennemore Craig, P.C.-Denver, Denver, CO.
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT
Marcia S. Krieger, Chief United States District Judge.
THIS MATTER comes before the Court pursuant to the Defendants' Motion for Summary Judgment (# 66), the Plaintiffs' response (# 69), and the Defendants' reply (# 75).
The Court summarizes the pertinent facts here, and elaborates as necessary in
its analysis. In 2011, the Federal Highway Administration (" FHA" ) solicited bids for the construction of a road in Hawaii. Defendant Kirkland Construction, LLP (" Kirkland" ) was the successful bidder for a portion of the project. Kirkland subcontracted with Plaintiff Arizona Drilling and Blasting (" Arizona" ) for Arizona to perform certain blasting services.
Arizona alleges that, over the life of the project, Kirkland breached the terms of the subcontract in several ways, all to Arizona's detriment: (i) it directed Arizona to arrive on the project site in October 2011, but then failed to commence the project until January 2012, causing Arizona to incur losses due to idled equipment, lost opportunities, and increased explosive costs; (ii) it called upon Arizona to conduct blasting at " cut depths" shallower than what was called for in the project plans, increasing Arizona's costs and reducing its compensation (which was based on volume of rock removed); (iii) it failed to provide sufficient vehicle access to the job sites, requiring employees to hand-carry explosives to blast sites instead of delivering them by vehicle; (iv) it directed Arizona to perform work on an accelerated basis, but failed to pay premium compensation for such work; (v) it required Arizona to rent a hydraulic impact hammer and offered to share the cost of such rental, then refused to reimburse Arizona for any portion of the rental costs; (vi) it failed to provide work for Arizona in June and July 2012, causing Arizona to incur additional idling costs; (vii) it failed to obtain a contractually-required sales tax waiver. In addition, Arizona contends that Kirkland failed to remit payment on " Pay Estimate 9," an invoice submitted by Arizona.
Arizona's Amended Complaint (# 34) asserts three claims Kirkland: (i) breach of contract under Colorado law; (ii) breach of the implied covenant of good faith and fair dealing under Colorado law; and (iii) quantum meruit /unjust enrichment, presumably under Colorado law. In addition it asserts a claim under the Miller Act, 40 U.S.C. § 3131 et seq., against Defendant Travelers Casualty and Surety Company of America (" Travelers" ), as surety on a payment bond posted by Kirkland.
Kirkland moves (# 66) for summary judgment on each of Arizona's claims, arguing: (i) as to the breach of contract claim regarding Pay Estimate 9, Kirkland's obligation to pay never arose because Arizona failed to execute a contractually-required release; (ii) as to the remaining breach of contract claims, Arizona failed to comply with a term of the contract requiring it to give written notice of any alleged breach to Kirkland within 10 days of the breach; (iii) as to the breach of the implied covenant of good faith and fair dealing claim, Arizona cannot show that the subcontract conferred discretion on Kirkland in any of the areas at issue and Arizona's contentions are contrary to express terms of the contract; (iv) the quantum meruit claim is not cognizable in light of an express contract governing the parties' obligations; (v) Kirkland is entitled to summary judgment on its affirmative defense of waiver, based on contractual terms; and (vi) the Miller Act claim fails because Kirkland is not obligated to Arizona in any way.
A. Standard of review
Rule 56 of the Federal Rules of Civil Procedure facilitates the entry of a judgment only if no trial is necessary. See White v. York Intern. Corp., 45 F.3d 357, 360 (10th Cir. 1995). Summary adjudication is authorized when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Substantive law governs what facts are material and what issues must be determined. It also specifies the elements that must be proved for a given claim or defense, sets the standard of proof and identifies the party with the burden of proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Kaiser-Francis Oil Co. v. Producer's Gas Co., 870 F.2d 563, 565 (10th Cir. 1989). A factual dispute is " genuine" and summary judgment is precluded if the evidence presented in support of and opposition to the motion is so contradictory that, if presented at trial, a judgment could enter for either party. See Anderson, 477 U.S. at 248. When considering a summary judgment motion, a court views all evidence in the light most favorable to the non-moving party, thereby favoring the right to a trial. See Garrett v. Hewlett Packard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).
If the movant has the burden of proof on a claim or defense, the movant must establish every element of its claim or defense by sufficient, competent evidence. See Fed.R.Civ.P. 56(c)(1)(A). Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. See Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991); Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir. 1999). If there is a genuine dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material fact, no trial is required. The court then applies the law to the undisputed facts and enters judgment.
If the moving party does not have the burden of proof at trial, it must point to an absence of sufficient evidence to establish the claim or defense that the non-movant is obligated to prove. If the respondent comes forward with sufficient competent evidence to establish a prima facie claim or defense, a trial is required. If the respondent fails to produce sufficient competent evidence to establish its claim or defense, then the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
B. Breach of contract claims
To establish a claim for breach of express contract under Colorado law, Arizona must show: (i) the existence of a contract; (ii) performance by Arizona of its obligations or some justification for its non-performance; (iii) non-performance of its obligations by Kirkland; and (iv) resulting damages. Western Distributing Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992). It is not disputed that a contract existed between the parties, and, except as noted below, Kirkland does not dispute, at least for purposes of this motion, that it breached that contract. Its primary argument is that Arizona cannot show the second element: that Arizona complied with all of the contract's requirements.
1. Pay Estimate 9
Turning first to the breach of contract claim arising out of Pay Estimate 9, Kirkland contends that Arizona cannot establish that it fully performed under the contract. In pertinent part, Kirkland argues
that the undisputed facts show that Arizona failed to comply with a condition precedent to payment contained in Paragraph 3(c) of the contract.
Paragraph 3(c) provides that Kirkland's obligation to pay Arizona's invoices arises " only when all conditions of this contract relative to sales tax information, payroll reporting requirements, insurance certificates, bond requirements, progress statement format and procedure, previous payment certification, releases of claims and satisfactory rate of progress have been met." (Emphasis added.) Although this paragraph refers to " releases of claims" that are " conditions of this contract," Kirkland has not pointed the Court to the specific contractual provision that defines the obligations of Arizona with regard to any " releases of claims," much less specifies any required content and timing of such releases.
The " release" in question appears to be a document entitled " Release and Certification of Payment" which, at least as a matter of practice, Arizona's representative submitted with each invoice, agreeing to " waive[ ], release[ ], and relinquish[ ] all rights and claims . . . against [Kirkland]" in exchange for payment of the invoice. The record reflects that, initially, Arizona's principal, Luke Meister, added language to the release reading " This payment does not reflect the outstanding claim amount." However, there appears to be some dispute between the parties as to whether Mr. Meister ever actually signed (electronically or otherwise) the modified release.
Ultimately, the parties' jockeying over whether or not Mr. Meister signed the modified release is irrelevant. Paragraph 3(c) of the parties' contract requires Arizona to submit any " releases of claims" that are " conditions of th[e] contract" in order to cause Kirkland's payment obligations under the contract to mature. However, Kirkland has not identified any contractual provision that specifies the time or contents of the referenced release, nor explained how the required release differed from what Arizona submitted. As a consequence, Kirkland has not shown that Arizona failed to comply with all " conditions of the contract" . ...