A.M. Cohron & Son, Inc. v. City of Columbus, Nebraska
4:21-cv-03066
D. Neb.Jul 7, 2021Background
- AMC (Iowa corp.) and City of Columbus entered a construction contract (Dec. 2016) for two grade-separated crossings; project was federal-aid with NDOR payments on the City's behalf.
- AMC encountered rebar clearance problems on the viaduct, performed extra work (thicker deck), and submitted a change-order request on or about May 22, 2018; the Project Engineer denied the request on June 4, 2018.
- The City assessed $394,179 in liquidated damages for delay; AMC alleges damages exceeding $456,762.45 and alleges the City breached by withholding sums and failing to grant time/compensation.
- AMC filed suit in federal court on March 18, 2021 for breach of contract; the City moved to dismiss under Rule 12(b)(6), arguing AMC failed to satisfy Neb. Rev. Stat. § 16-726 conditions precedent and that the claim is time-barred; the parties disputed whether the Nebraska Construction Prompt Pay Act (§ 45-1210) or § 16-726 applied.
- The court held the NCPPA (§ 45-1210) excluded federal-aid projects (post-2014 amendment), concluded § 16-726 governs claims against a city of the first class, found AMC did not allege timely filing with the city clerk within 90 days, and dismissed the complaint with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which Nebraska statute governs recovery for construction claims against the City? | NCPPA (§ 45-1210) governs because this is a construction contract. | § 16-726 governs; NCPPA excludes federal- or state-aid projects paid by the state. | § 16-726 applies; NCPPA excludes federal-aid projects after the 2014 amendment. |
| Did AMC satisfy § 16-726 conditions precedent (timely written claim filed with city clerk)? | AMC contends submitting claims to the Project Engineer complied (or NCPPA controlled). | AMC did not file a claim in the city clerk’s office within 90 days; Project Engineer is not the clerk. | AMC failed to allege filing with the city clerk within 90 days; conditions precedent not met. |
| Is AMC’s breach-of-contract claim time-barred? | AMC argues challenge to liquidated damages is not time-barred; seeks compensation for withheld sums. | The accrual (denial of claim/assessment of damages) occurred in 2018; suit (2021) was too late absent required 90-day filing. | Claim accrued by June/April 2019 at latest; no 90-day city-clerk filing alleged; claim is time-barred. |
| Could AMC amend to cure pleading defects? | (No amendment requested) AMC did not request leave to amend or allege facts that would make the claim timely. | Dismissal appropriate because defects are substantive and unremedied. | Court found no basis to allow amendment and dismissed with prejudice. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standards for pleadings and plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard requiring plausibility)
- Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d 915 (application of Iqbal/Twombly in Eighth Circuit)
- Varner v. Peterson Farms, 371 F.3d 1011 (statute-of-limitations dismissal on Rule 12(b)(6))
- Schmidt v. Newland, 927 F.3d 1038 (limitations defense and tolling on Rule 12(b)(6))
- Travelers Indem. Co. v. Int'l Nutrition, Inc., 734 N.W.2d 719 (statutes in existence at contract formation become part of contract)
- Centric Jones v. City of Kearney, Neb., 324 F.3d 646 (§ 16-726 filing requirement functions as time bar)
- Irving F. Jensen Co. v. State, Dep't of Roads, 719 N.W.2d 716 (accrual of contract claim upon denial of payment)