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United States v. Patterson

United States District Court, Third Circuit

December 12, 2013

UNITED STATES OF AMERICA for the use and benefit of U.S. GLASS, INC. and XLE METALS, INC., Plaintiffs,
v.
RONALD DUANE PATTERSON, et al., Defendants.

MEMORANDUM

L. FELIPE RESTREPO, District Judge.

U.S. Glass & Metals, Inc. ("U.S. Glass") and XLE Metals, Inc. ("XLE") (collectively "Plaintiffs") were both engaged as subcontractors in the renovation of a Veterans Administration Medical Center in Philadelphia, and allegedly were not paid for work they performed. They brought suit against the general contractor, Aeroplate Corp. ("Aeroplate"), claiming breach of contract; and against Aeroplate's alleged sureties, Ronald D. Patterson ("Patterson") and Redi-Corp. of Central California d/b/a/Redi-Bilt ("Redi-Bilt"), seeking to recover on the payment bond pursuant to the Miller Act, 40 U.S.C. § 3131 et seq.

Aeroplate has since settled with both plaintiffs and consented to a judgment against it. Pending before the Court is Plaintiffs' joint motion for summary judgment on their remaining Miller Act claims. In addition, the Court will construe the Defendants' "Memorandum in Support of Jury Trial" (ECF Doc. 43) to include a cross-motion for summary judgment in favor of Redi-Bilt only. The Court will grant summary judgment for Redi-Bilt, grant summary judgment in favor of XLE on its claim against Patterson, and defer ruling on U.S. Glass' claim against Patterson.

I. BACKGROUND

"The Miller Act requires every contractor on a federal government contract exceeding $100, 000 to provide [a] payment bond with a surety... for the protection of all persons supplying labor and material in carrying out the work provided for in the contract.'" U.S. ex rel. E & H Steel Corp. v. C. Pyramid Enterprises, Inc., 509 F.3d 184, 186 (3d Cir. 2007) (quoting 40 U.S.C. § 3131(b)(2)); see also Dep't of Army v. Blue Fox, Inc., 525 U.S. 255, 264 (1999) ("[R]ecognizing that sovereign immunity left subcontractors and suppliers without a remedy against the Government when the general contractor became insolvent, Congress enacted the Miller Act."). Any supplier or subcontractor who "has not been paid in full within 90 days" for labor performed or supplies furnished "may bring a civil action on the payment bond for the amount unpaid at the time the civil action is brought and may prosecute the action to final execution and judgment for the amount due." 40 U.S.C. § 3133(b)(1).

Aeroplate contracted with the federal government to undertake the renovation of the Veterans Administration Medical Center in Philadelphia ("VAMC") (contract number VA244-C-1453). As required by the Miller Act, Aeroplate provided a payment bond, which the parties agree is in the amount of $8, 876, 146 and signed by Ronald D. Patterson as surety. See Doc. 31-2, p. 14; Doc. 1, p. 14. Aeroplate then sub-contracted with U.S. Glass and XLE, both Pennsylvania corporations, for labor and materials. See Compl., Doc. 1, ¶¶1-10; XLE Contract, Doc. 31-2, p. 10; U.S. Glass Contract, Doc. 31-2, p. 25.

In May of 2012, U.S. Glass and XLE brought suit against Aeroplate, Patterson and Redi-Bilt, alleging that Aeroplate had not paid for labor and supplies that it had accepted, and that more than ninety days had elapsed. See Compl., Doc. 1. The Complaint included breach-of-contract claims against Aeroplate, see id. ¶¶ 53-81, and Miller Act claims against Patterson and Redi-Bilt for recovery on the bond, see id. ¶¶ 18-52. This suit is one of several that subcontractors on the VAMC project have filed against Aeroplate. See, e.g., U.S. ex rel. ESCO Elec. Supply Co. v. Aeroplate Corp., 2013 WL 4763843 (E.D. Pa. Sept. 5, 2013) (granting summary judgment to subcontractor plaintiff); U.S. ex rel. Constr. Hardware, Inc. v. Patterson, 2013 WL 5356851 (E.D. Pa. Sept. 24, 2013) ( inter alia, declining to enter default judgment for subcontractor plaintiff). Aeroplate, meanwhile, has filed suit against the Department of Veterans Affairs in the Federal Court of Claims, alleging that it has not received the payment that it is due from the government. See Aeroplate Corp. v. United States, 112 Fed.Cl. 88 (Fed. Cl., Aug. 1, 2013).[1]

This case was set for trial on November 22, 2013. On that date, Aeroplate settled with both Plaintiffs. The parties subsequently submitted a proposed Order of Judgment memorializing the terms of the settlement, which the Court signed. Plaintiffs' Miller Act claims against Patterson and Redi-Bilt remained live, and Plaintiffs' joint motion for summary judgment remained outstanding. Pursuant to this Court's Order entered November 22 (Doc. 38), the parties filed supplemental materials addressing the effect of the judgment against Aeroplate on the remaining claims.

Specifically, Plaintiffs filed a supplemental motion for summary judgment and supporting memorandum (Doc. 42). Patterson and Redi-Bilt answered via a "Memorandum in Support of Jury Trial, " which the Court will construe as a response and cross-motion for summary judgment in favor of Redi-Bilt. See Doc. 43, p. 2 ("There are no documents or evidence that Redi-Bilt is a surety and summary judgment should be granted for Redi-[B]ilt."). The Plaintiffs then moved to strike this document from the record (Doc. 45). In view of the condensed briefing schedule, the Court will deny that motion. To the extent that Plaintiffs' motion to strike advances substantive arguments, the Court will construe it as a reply.

Pending before the Court, then, are Plaintiffs' motion for summary judgment on their remaining Miller Act claims against Patterson and Redi-Bilt, and Redi-Bilt's cross-motion for summary judgment in its favor.

II. JURISDICTION AND STANDARD OF REVIEW

This Court has federal subject-matter jurisdiction pursuant to U.S. Const. Art. III §2, 28 U.S.C. § 1345 and 28 U.S.C. § 1331. In ruling on a motion for summary judgment, the Court must "construe the evidence in the light most favorable" to the non-moving party, Zimmerman v. Norfolk S. Corp., 706 F.3d 170, 176 (3d Cir. 2013), and grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." F.R.C.P. 56(a). "A genuine dispute' exists if a reasonable jury could find for the nonmoving party." Zimmerman, 706 F.3d at 176.

III. DISCUSSION

A. Claims against ...


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