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United States v. White

United States District Court, W.D. Kentucky, Louisville Division

May 8, 2017

UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF LEE BRICK PRODUCTS, INC. Plaintiff,
v.
FORREST B. WHITE, Jr. MASONRY, INC., et al., Defendants,

          MEMORANDUM OPINION AND ORDER

          COLIN LINDSAY, MAGISTRATE JUDGE.

         Lee Brick Products, Inc. (“Lee Brick”) filed this Miller Act lawsuit against Forrest B. White, Jr. Masonry, Inc. (“White Masonry”); ACC Construction, Co., Inc. (“ACC Construction”); and Liberty Mutual Insurance Company (“Liberty Mutual”) (together, the “Defendants”). The parties consented to magistrate judge jurisdiction. (DN 52.)

         Lee Brick moves for summary judgment and for a hearing on its motion. (DNs 62 & 63.) ACC Construction and Liberty Mutual also move for summary judgment. (DN 68.)

         The Court will grant summary judgment to Lee Brick and deny its motion for a hearing as moot. The Court will deny ACC Construction and Liberty Mutual's motion for summary judgment.

         Background

         The following facts are undisputed, unless otherwise noted.

         Lee Brick is a supplier of block, brick, and mortar. Between 2008 and 2009, White Masonry performed work as a subcontractor on a project at Fort Campbell (the “Fort Campbell Project”). Lee Brick supplied White Masonry with lightweight concrete masonry units for the Fort Campbell Project. The lightweight concrete masonry units Lee Brick supplied failed to meet certain standards and required extra labor, equipment, and materials on White Masonry's part. Lee Brick and White Masonry attempted to resolve their differences informally by having Lee Brick credit White Masonry's account. White Masonry says that though Lee Brick issued some credits, Lee Brick owes White Masonry $110, 000 for the Fort Campbell Project.

         Around June 2011, a general contractor, ACC Construction, entered into a contract with the government for a project at Fort Knox (the “Fort Knox Project”). ACC Construction, as principal, and Liberty Mutual, as surety, executed a $9.8 million payment bond for the Fort Knox Project. The payment bond obligated ACC Construction and Liberty Mutual as follows:

OBLIGATION:
We, the Principal and Surety(ies), are firmly bound to the United States of America (hereinafter called the Government) in the above penal sum. For payment of the penal sum, we bind ourselves, our heirs, executors, administrators, and successors, jointly and severally. However, where the Sureties are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum “jointly and severally” as well as “severally” only for the purpose of allowing a joint action or actions against any or all of us. For all other purposes, each Surety binds itself, jointly and severally with the Principal, for the payment of the sum shown opposite the name of the Surety. If no limit is indicated, the limit of liability is the full amount of the penal sum.
CONDITIONS:
[T]he above obligation is void if the Principal promptly makes payment to all persons having a direct relationship with the Principal or a subcontractor of the Principal for furnishing labor, material or both in the prosecution of the work provided for in the contract identified above, and any authorized modifications of the contract that subsequently are made. Notice of those modifications to the Surety(ies) are waived.

(DN 1-2, #8 (brackets added).)

         Lee Brick supplied White Masonry with $105, 804.32 in construction materials for the Fort Knox Project. White Masonry did not pay Lee Brick that amount. White Masonry denies that it owes Lee Brick any money for the Fort Knox Project.

         Procedural History

         On October 7, 2013, Lee Brick sued White Masonry for nonpayment on the Fort Knox Project. (DN 1, ¶¶ 8, 10.) Lee Brick alleges that the payment bond obligates ACC Construction and Liberty Mutual, jointly and severally, for White Masonry's failure to pay. (Id., ¶ 14.)

         White Masonry counterclaimed against Lee Brick, alleging that Lee Brick owes White Masonry $110, 000 in credits from the Fort Campbell Project, and those credits should offset any amount White Masonry owes for the Fort Knox Project. (DN 6, ¶¶ 7 - 10.)

         Lee Brick moves for summary judgment on its two remaining claims and on White Masonry's counterclaim. (DN 62.) ACC Construction and Liberty Mutual responded, and Lee Brick replied. (DNs 63 & 64.) White Masonry did not respond to Lee Brick's motion.

         ACC Construction and Liberty Mutual move for summary judgment on Lee Brick's claims against them. (DN 68.) Lee Brick responded, and ACC Construction and Liberty Mutual replied. (DNs 69 & 70.) White Masonry did not join in ACC Construction and Liberty Mutual's motion, nor did White Masonry separately move for summary judgment.

         Legal ...


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