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United States of America Ex Rel. Mle v. Vanguard Conractors

May 9, 2013

UNITED STATES OF AMERICA EX REL. MLE ENTERPRISES, INC., AND MLE ENTERPRISES, INC. PLAINTIFFS
v.
VANGUARD CONRACTORS, LLC, AND TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA DEFENDANTS



MEMORANDUM OPINION

This matter comes before the Court on a motion for summary judgment by Defendant Vanguard Contractors, LLC. (Def.'s Mot., Docket Number ("DN") 60.) The Plaintiff responded. (Pl.'s Resp., DN 69.) The Defendant replied. (Def.'s Reply, DN 70.) Fully briefed, this matter is now ripe for adjudication. Having considered the matter and being fully advised, the Defendant's motion is GRANTED.

I.

Defendant Vanguard Contactors, LLC ("Vanguard"), served as the prime contractor on a construction project at Fort Sill, Oklahoma known as the Building 700 project. Vanguard hired Plaintiff MLE Enterprises, Inc. ("MLE"), as a subcontractor on the project. MLE claims that Vanguard owes it $187,794.34 for uncompensated work that was performed outside of and in addition to the subcontract.*fn1 (Compl., DN 1, ¶ 9.) MLE also seeks $156,996.07 in retainage allegedly withheld by Vanguard on the subcontract. (Id.) MLE brought this action to recover a combined total of $344,790.41 on grounds that "Vanguard . . . breached the express and implied terms of its subcontract with MLE[.] (Id. at ¶¶ 9, 11.)

Discovery in this action revealed three important evidentiary considerations. First, MLE's claim for additional, uncompensated work is for $96,115.35, not $187.794.34. Second, the retainage claim is for $140,513.31, not $156,996.07. Third, MLE now admits that it did not credit Vanguard for $251,791.00 in "off contract" payments.

1.

Discovery first revealed that MLE's claim for work performed outside of and in addition to the subcontract is less than the amount alleged in the complaint. The original claim was based on a proposed subcontract change order between MLE and Vanguard.*fn2 (See Proposed Change Order, DN 60-3.) In that proposal, MLE sought additional compensation for work performed by three of MLE's subcontractors in the following amounts: 1) Construction Building Specialties -$37,891.53; 2) MDC Drywall, Inc. - $127,370.00; and 3) ASPRO - $22,532.85. (Id.) In all, the work performed by these subcontractors totaled $187,794.37, the amount MLE now seeks to recover from Vanguard for the work performed outside of the subcontract.

In her deposition, MLE's owner, Mary Luttrell, admitted that the claim for the extra work was less than $187,794.37. Specifically, Luttrell agreed to drop any portion of the claim for work performed by Construction Building Specialties. (Luttrell Dep., DN 59, p. 5:1-14.) Additionally, she agreed that MLE was only seeking $73,582.50 from Vanguard for work performed by MDC Drywall, not $127,370.00 as listed in the proposed change order. (Id. at pp. 60:23-62:20.) Finally, the evidence regarding payments to ASPRO is ambiguous. On one hand, Luttrell conceded that MLE withheld $22,532.85 from ASPRO because the company failed to complete certain work on the project. (See id. at pp. 61:8-62:20; Letter of Nov. 10, 2009, DN 60-4.) Vanguard claims that MLE cannot recover for any non-payment to ASPRO. On the other hand, evidence exists that MLE paid at least some portion of the amount intended for ASPRO to other subcontractors to complete ASPRO's work. Because Luttrell did not explicitly concede that MLE is not seeking to recover the amount necessary to complete ASPRO's work, the Court includes that full amount in the damage calculation, even though it may overestimate damages. Doing so resolves this ambiguity in favor of MLE, as is required of the Court when faced with a motion for summary judgment, but has no effect on the ultimate outcome of this action. Accordingly, evidence produced during discovery reveals that MLE's claim for work performed outside of and in addition to the subcontract is, at most, $96,115.35, not $187.794.37 as alleged in the complaint.

2.

Second, discovery also revealed that MLE's claim for retainage is less than alleged. MLE's subcontract with Vanguard was for $1,350,342.85.*fn3 Luttrell admitted in her deposition that Vanguard paid MLE a total of $1,209,829.54 on the subcontract. (See Luttrell Dep., DN 59, pp. 27:16-31:2.) This leaves only $140,513.31 unpaid on the subcontract, not $156,996.07 as alleged in the complaint. Adjusting MLE's damages in light of evidence revealed in discovery, MLE seeks $140,513.31 in unpaid retainage on the subcontract and $96,115.35 for work performed outside of an in addition to the subcontract, for total damages of $236,628.66.

3.

Third, the evidence produced in discovery revealed that Vanguard made "off contract" payments to MLE in the amount of $251,791.00 and that MLE never credited Vanguard for those payments. In answer to the complaint, Vanguard asserted that MLE did not credit Vanguard for these "off contract" payments and that MLE wrongly charged Vanguard for work MLE did not perform and for materials it did not deliver. (Am. Answer, DN 42, pp. 2, 3.) Accordingly, Vanguard seeks offset of these amounts, or, in the alternative, counterclaims to recover the non-credited payments.

The nature and origin of the "off contract" payments from Vanguard to MLE is unclear from the record. Vanguard allegedly routed these payments from other projects to MLE's subcontract on the Fort Sill project in an attempt to prevent MLE from losing money on the project because of a bad bid. The exact origin of the payments is inconsequential, however, because Luttrell admitted in her deposition that MLE did not but should have applied the "off contract" payments to the MLE's work on the project.

Q: [Vanguard]: You don't have any disputes that the remaining $251,791 was ...


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