Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Aegis Security Co.

January 14, 2009

UNITED STATES OF AMERICA, ON BEHALF OF AND FOR THE USE OF SIMPLEXGRINNELL, LP, PLAINTIFFS
v.
AEGIS INSURANCE COMPANY, AND COLEMAN CONSTRUCTION COMPANY, INC., DEFENDANT



The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge

MEMORANDUM

JUDGE SYLVIA H. RAMBO

Before the court is Defendant Aegis Security Company's ("Aegis") motion to dismiss Plaintiff SimplexGrinnel, LP's ("SG") bad faith claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. The case arises out of the alleged failure of Aegis to pay SG pursuant to its obligation under a payment bond given by Aegis as surety for its principal, Defendant Coleman Construction Company, Inc. ("Coleman"). Aegis argues that the court must dismiss the claim because a surety bond does not constitute an insurance policy under 42 Pa. Cons. Stat. Ann. § 8371. The court considers this argument below.

I. Background: Facts*fn1 and Procedural History

Coleman entered into a contract with the United States Navy on or about September 30, 2006, for the renovation of a fire alarm system at the NAVFAC Navy Depot located in Mechanicsburg, Pennsylvania. (Doc. 13 ¶ 7.) On February 2, 2007, Coleman subcontracted with SG to provide labor and materials in connection with the renovation of the fire alarm system at the Navy Depot. (Id. ¶ 8.) Although SG completed all work specified under the contract, Coleman "currently has open balances on four invoices with SG, issued between May 14, 2007 and September 27, 2007." (Id. ¶¶ 9--10.) On January 16, 2008, Coleman admitted to owing the balance due on its account with SG. (Id. ¶ 11.) Nonetheless, Coleman allegedly has failed to respond to demands for payments, failed to respond to SG's first complaint, and failed to appear at an arbitration as required by the contract. (Id. ¶¶ 12--23.)

The Miller Act, 40 U.S.C. § 3131, required that Coleman furnish bonds prior to receiving the contract, and Aegis, the surety, issued Bond No. B10 007 706 ("the Bond") to Coleman, the principal. (Id. ¶ 16.) After Coleman failed to compensate SG for labor performed, SG made a demand on Aegis by letter dated June 3, 2008. (Id. ¶¶ 17, 21.) On September 18, 2008, SG brought suit against Coleman and Aegis. (Id. ¶ 22.) SG made subsequent demands on Aegis, but Aegis has not tendered payment on the Bond. (Id. ¶ 24.) On November 10, 2008, SG filed an amended complaint, adding a bad faith claim under 42 Pa. Cons. Stat. Ann. § 8371. (Doc. 13.)

On November 21, 2008, Aegis filed a motion to dismiss SG's bad faith claim along with a supporting brief, arguing that a surety bond does not constitute an insurance policy under the statute. (Docs. 15--16.) SG filed a brief in opposition to the partial motion to dismiss on December 15, 2008. (Doc. 25.) Aegis opted not to file a reply brief. The motion to dismiss SG's bad faith claim is now ripe. The court will turn to the merits of the motion.

II. Legal Standard

Among other requirements, a sound complaint must set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This statement must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, - U.S. -, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "Fair notice" in Rule 8(a)(2) "depends on the type of case-some complaints will require at least some factual allegations to make out a showing that the pleader is entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008) (quotation omitted). "A situation may arise where, at some point, the factual detail in a complaint is so undeveloped that it does not provide a defendant the type of notice of claim which is contemplated by Rule 8." Id. A plaintiff must provide "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action" to show entitlement to relief. Twombly, 127 S.Ct.at 1965; see also Phillips, 515 F.3d at 238--39; Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (The court is not "compelled to accept unsupported conclusions and unwarranted inferences or a legal conclusion couched as a factual allegation." (quotations and citations omitted)); Evancho v. Fisher, 423 F.3d 347, 351(3d Cir. 2005).

A defendant may attack a complaint by a motion under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. In deciding a motion to dismiss under Rule 12(b)(6), the court is required to accept as true all of the factual allegations in the complaint, Erickson v. Pardus, - U.S. -, 127 S.Ct. 2197, 2200 (2007), and all reasonable inferences permitted by the factual allegations, Watson v. Abington Twp., 478 F.3d 144, 150 (3d Cir. 2007), viewing them in the light most favorable to the plaintiff, Kanter v. Barella, 489 F.3d 170, 177 (3d Cir. 2007). If the facts alleged are sufficient to "raise a right to relief above the speculative level" such that the plaintiff's claim is "plausible on its face," a complaint will survive a motion to dismiss. Twombly, 127 S.Ct. at 1965, 1974; Phillips, 515 F.3d at 234; Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007); Stevenson v. Caroll, 495 F.3d 62, 66 (3d Cir. 2007). This requirement "calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of" necessary elements of the plaintiff's cause of action. Twombly, 127 S.Ct. at 1965.

"To decide a motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993) (citations omitted); see also Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007). The court may consider "undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] document[s]." Id. Additionally, "documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading may be considered." Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002); see also U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002) ("Although a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment.") (internal quotation omitted). However, the court may not rely on other parts of the record in making its decision. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).

III. Discussion

Aegis seeks dismissal of SG's bad faith claim pursuant to Rule 12 of the Federal Rules of Civil Procedure, arguing that SG failed to state a claim for bad faith because a surety bond does not constitute an insurance policy under 42 Pa. Cons. Stat. Ann. § 8371. Pennsylvania's Bad Faith Statute provides that:

In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.