Opinion
Civil Action No. 03-2477, c/w 03-3238 Section: I/4.
July 21, 2004
ORDER AND REASONS
Before the Court is the motion of defendant, Gulf Insurance Company, to dismiss plaintiffs' complaints for failure to state a cause of action. According to defendant, plaintiffs are barred by the applicable period of limitations. For the reasons stated herein, the motion to dismiss is DENIED.
JM Environmental Industrial Services L.L.C. and U.S. Waterproofing filed a complaint, Civil Action No. 03-2477, against Metropolitan Abatement Co. and Gulf Insurance Co. on August 29, 2003. Thermal Guard Roofing, L.L.C. filed a complaint, Civil Action No. 03-3238, against defendants on November 18, 2001. This Court consolidated the above-related cases on January 8, 2004. [Rec. Doc. 10]. Metropolitan Abatement Co. was dismissed without prejudice for lack of service. [Rec. Docs. 5 and 6].
Rec. Doc. 12.
On July 12, 2001, Metropolitan Abatement Company ("MAC") entered into a contract with the United States of America for site demolition, re-roofing, facade repairs, new HVAC equipment, and electrical work at the United States Coast Guard Air Station New Orleans in Belle Chase, Louisiana. Pursuant to the Miller Act, 40 U.S.C. § 270a, MAC supplied a statutory payment bond to the United States with Gulf Insurance Company acting as surety for the bond. MAC then entered into subcontracts with three different parties. JM Environmental and Industrial Services, L.L.C. ("JM") subcontracted with MAC in the fall of 2001; U.S. Waterproofing Systems, Inc. ("U.S. Waterproofing") subcontracted with MAC in the summer of 2001; and Thermal Guard Roofing, L.L.C. ("Thermal") subcontracted with MAC in the summer of 2002.
Rec. Doc. 12.
The plaintiff subcontractors performed work on the project in Belle Chase, Louisiana. Because of alleged non-payment of invoices by MAC, each plaintiff rescinded its contract with MAC and ceased work. Plaintiffs asserted individual claims against the general contractor's surety, Gulf Insurance Company, on the statutory payment bond furnished pursuant to the requirements of the Miller Act.
Rec. Doc. 12.
The Miller Act provides that "no suit shall be commenced after the expiration of one year after the day on which the last of the labor was performed or material was supplied by him." 40 U.S.C. § 270b(b). Defendant argues that plaintiffs' causes of action should be dismissed because they are barred by the Act's period of limitations. Plaintiffs seek to use the doctrine of equitable estoppel to defeat defendant's argument.
To determine whether a motion to dismiss has merit, Jefferson v. Lead Ind. Ass'n. Inc., 106 F.3d 1245, 1250 (5th Cir. 1997), instructs that "the standard to be applied to a motion to dismiss under Federal Rule 12(b)(6) is a familiar one." The district court must take the factual allegations of the complaint as true and resolve any ambiguities or doubts regarding the sufficiency of the claim in favor of the plaintiff. Fernandez-Montes v. Allied Pilots Ass'n., 987 F.2d 278, 284 (5th Cir. 1993). The complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff cannot prove any set of facts in support of her claim that would entitle her to relief.Fernandez-Montes, 987 F.2d at 284, 285; Leffall v. Dallas Independent School District, 28 F.3d 521, 524 (5th Cir. 1994). However, conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss. Fernandez-Montes, 987 F.2d at 284; Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994). A complaint that shows the requested relief to be barred by an affirmative defense, such as a statute of limitations, may be dismissed for failure to state a cause of action. Kaiser Aluminum Chemical Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
Before any plaintiff filed suit, more than one year passed after the day on which the last labor was performed or material was supplied. JM last performed work on December 22, 2001, and the unpaid value of its work amounts to $33,906.83. U.S. Waterproofing ceased work on December 16, 2001, the unpaid value of which totals $58,963.72. On August 29, 2003, approximately eight months after the one year mark established by the Act, JM and U.S. Waterproofing jointly filed suit against MAC and Gulf Insurance for the reasonable value of labor and materials. Thermal, which entered into its agreement with MAC about one year after the other two parties, last performed work on July 18, 2002. Thermal filed its complaint on November 18, 2003, approximately four months beyond the statutory period. Thermal's claim for unpaid work amounts to $25,776.00.
Rec. Doc. 1, JM's Complaint, p. 5.
Rec. Doc. 1, JM's Complaint, p. 5.
Rec. Doc. 1, Thermal's Complaint, exhibit E.
Rec. Doc. 1, Thermal's Complaint p. 4.
Plaintiffs allege in their complaints that during the months beyond the one year mark, each dealt in good faith with Gulf Insurance through its claims analyst, Richard Kukosky, and each allegedly gave notice of its claim against the payment bond. Plaintiffs also allege that each received and completed proof of claim forms, submitted affidavits and other materials as requested by Gulf Insurance's representative, and received assurances that releases would be forwarded and checks would be sent. Defendant denies the allegations and asserts that they are overstated. However, as stated previously, for the purpose of resolving this motion, plaintiffs' allegations in the complaint are taken as true. See Fernandez-Montes, 987 F.2d at 284.
Rec. Doc. 1, Thermal's Complaint, ¶¶ 9-12; Rec. Doc. 1, JW's Complaint, ¶¶ 13-22.
Bond #B2184-17-87.
Rec. Doc. 1, Thermal's Complaint, ¶¶ 10 and 11; Rec. Doc. 1, JW's Complaint, ¶¶ 17, 18, 20, and 21.
Rec. Doc. 23, Defendant's Reply Brief.
Fifth Circuit law establishes that a defendant may be estopped from relying on the Miller Act's one-year limitation period if sufficient equitable considerations exist to warrant a claim of estoppel. United States of America for the use of Texas Bitulithic Company, Fidelity and Deposit Company of Maryland, 813 F.2d 697, 700 (5th Cir. 1987); see also United States of America for the use of Atlas Erection Co. v. Continental Casualty Co., 357 F. Supp. 795, 798 (E.D. La. 1973) (holding that plaintiff's suit was not barred by the one year time limitations of the Miller Act because of the principle of equitable estoppel). Accepting as true the allegations in the complaints, as this Court is required to do when reviewing a motion to dismiss, plaintiffs' allegations are sufficient to survive defendant's motion to dismiss. Based on the pleadings alone, defendant may be barred by the doctrine of equitable estoppel from relying on the Miller Act's one year period of limitations to defeat plaintiffs' claims. Whether sufficient equitable considerations exist cannot be determined at this stage.
The United States Supreme Court cogently summarized the doctrine of equitable estoppel:
The principle is that where one party has by his representations or his conduct induced the other party to a transaction to give him an advantage which it would be against equity and good conscience for him to assert, he would not in a court of justice be permitted to avail himself of that advantage. And although the cases to which this principle is to be applied are not as well defined as could be wished, the general doctrine is well understood and is applied by courts of law as well as equity where the technical advantage thus obtained is set up and relied on to defeat the ends of justice or establish a dishonest claim.Glus v. Brooklyn Eastern District Terminal, 359 U.S. 295, 234, 79 S.Ct. 760, 762, 3 L.Ed.2d 770 (1959) (quoting Ins. Co. v. Wilkinson, 80 U.S. 222, 233, 20 L.Ed. 617 (1872)). The Fifth Circuit defines estoppel as "any conduct, express or implied, which reasonably misleads another to his prejudice so that a repudiation of such conduct would be unjust in the eyes of the law. It is grounded not on subjective intent but rather on the objective impression created by the actor's conduct." E.E. Morgan v. Thomas, 448 F.2d 1356, 1365 (5th Cir. 1971) (quotingMatsuo Yoshida v. Liberty Mut. Ins. Co., 240 F.2d 824, 829-30 (9th Cir. 1957)).
In sum, after reviewing the complaint, the motions and memoranda, and the law, the Court finds that the motion fails to establish beyond doubt that the plaintiffs cannot prove any set of facts in support of their claims. See Fernandez-Montes, 987 F.2d at 284, 285. Accordingly,
IT IS ORDERED that the motion of defendant, Gulf Insurance Company, to dismiss pursuant to F.R.Civ.P. 12(b)(6) is DENIED.