Larry J. Kudsk v. Federal Solutions Group, Inc., 2:19-cv-00389

Consolidated action arising from government construction projects: Moffett Field roofing (original prime BARA), Vandenberg HVAC (original prime FSG) and multiple Vandenberg Fire Alarm projects (including TLF).
F&D (Fidelity and Deposit Co. of Maryland) was surety after general contractors (BARA/FSG) defaulted; F&D signed ratification agreements with Kudsk and later retained Vertex to complete work.
Kudsk (Larry J. Kudsk dba Larry Kudsk Construction Services) sued for unpaid subcontract balances, extra work, and extended overhead; also brought a Miller Act claim for Moffett Field.
Defendants (Vertex and F&D) argued Kudsk abandoned HVAC work and sought completion costs; Vertex denied contractual duties to obtain certain Notices to Proceed on the TLF fire alarm project.
After trial, court awarded Kudsk $93,190.50 (Moffett Field) and $236,910.89 (Vandenberg HVAC), denied his fire-alarm claims (including TLF lost profits/administrative charges), and dismissed F&D’s counterclaim for completion costs.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Miller Act recovery for Moffett Field	Kudsk performed work and is owed unpaid balance under Miller Act payment bond	F&D argued offsets due to DOL withhold and delays in clearing condition	Judgment for Kudsk: $93,190.50; no offset proven by F&D
Substantial performance on HVAC / termination	Kudsk substantially performed or was excused by Vertex/Air Force conduct and delays	F&D/Vertex said Kudsk abandoned work and was terminated for nonperformance	Court found substantial performance/excuse; awarded $236,910.89 on HVAC
Extra work / change orders on HVAC	Extra work requested/required by Air Force/Vertex and outside original scope; Kudsk entitled to compensation	Defendants argued those items were within contract or unsupported	Court found extra work claims valid and payable
F&D counterclaim for completion costs / third-party beneficiary claim	N/A (counterclaim against Kudsk denied)	F&D claimed it was third-party beneficiary and incurred costs completing HVAC after termination	Court rejected F&D damages proof and awarded nothing on counterclaim
TLF Fire Alarm — pre-Notice charges and lost profits	Kudsk performed preparatory/admin work and Vertex had duty to obtain Notice to Proceed; therefore Kudsk is entitled to compensation and lost profits	Vertex/F&D argued no Notice to Proceed issued and no contractual duty to procure it; no entitlement without NTP	Court held no contractual duty and denied payment for administrative work and lost profits on TLF

Taylor Const. Inc. v. ABT Service Corp., Inc., 163 F.3d 1119 (9th Cir. 1998) (measure of recovery under the Miller Act is the sums due under the bonded contract)
United States ex rel. Sherman v. Carter, 353 U.S. 210 (U.S. 1957) (Miller Act policy obligates sureties to make good defaulting contractors' obligations)
Tolstoy Constr. Co. v. Minter, 78 Cal. App. 3d 665 (Cal. Ct. App. 1978) (California recognizes the doctrine of substantial performance)