United States v. Liberty Mutual Insurance Company
8:12-cv-02921
M.D. Fla.Dec 28, 2015Background
- Jack Daniels Construction, Inc. sues Liberty Mutual and Safeco (Sureties) under the Miller Act for labor/costs on the Joint Intelligence Technical Training Facility project.
- Peter Brown Construction, prime contractor, provided payment bond; Ragghianti Foundations III, LLC performed subcontracts and Jack Daniels performed sub-subcontracted concrete work.
- Subcontract and Sub-Subcontract governed the work; the Sub-Subcontract was not incorporated by reference to the Subcontract.
- A joint payment of $92,623.56 was made via an unconditional lien waiver, but Jack Daniels alleges nonpayment on several invoices.
- Ragghianti case resolved some issues, but this case was stayed pending that outcome; upon return, both sides moved for partial summary judgment.
- Court grants/denies various motions, including denial of certain claims and discovery of contested facts related to damages and waivers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Sureties are liable for unearned profits under the Miller Act | Daniels does not pursue lost profits; any question about 80627 remains factual | Invoice 80627 seeks loss-profits; Miller Act does not cover unearned profits | Summary judgment denied on extent of 80627 as profits may be recoverable or not; factual question remains |
| Whether CO Nos. 5 and 8 are barred by the Sub-Subcontract | Delays caused by Peter Brown; costs attributable to delay are recoverable under Pertun | CO 5/8 constitute non-continuous mobilizations included in lump-sum price; not recoverable | Not entitled to summary judgment; genuine issue of fact exists as to whether costs were expended due to delay |
| Whether the Waiver releases Jack Daniels' Miller Act claims for CO Nos. 7, 8, 9, and 2.1 | Waiver lacks express release of Miller Act rights; invoices not included | Waiver purports broad release of lien/bond claims | Summary judgment not appropriate; issues of material fact remain about Waiver scope |
| Whether Jack Daniels is entitled to Attorneys’ Fees | Texas law governs fees; Miller Act permits fee recovery if contract provides | F.D. Rich Co. controls; federal law; no applicable contract provision here | Sureties entitled to summary judgment on attorneys’ fees (no applicable fee provision under state law) |
| Whether Sureties’ affirmative defenses of prior breach and setoff survive | No privity; Sureties cannot rely on contract defenses against Miller Act claim | Sureties stand in principal’s shoes; may raise defenses; privity exists via contract | Plaintiff entitled to summary judgment on both prior breach and setoff defenses |
Key Cases Cited
- Pertun Constr. Co. v. Harvesters Grp., Inc., 918 F.2d 915 (11th Cir. 1990) (Miller Act delay costs recoverable as out-of-pocket costs)
- F.D. Rich Co. v. United States for the Use of Industrial Lumber Co., 417 U.S. 116 (1974) (Miller Act remedies are federal; attorneys’ fees governed by federal law; American Rule applies)
- Mariana v. Piracci Constr. Co., 405 F. Supp. 904 (D.D.C. 1975) (Costs incurred due to delay may be recoverable under Miller Act)
- Krupp Steel Prods. v. Aetna Ins. Co., 831 F.2d 978 (11th Cir. 1987) (Miller Act remedies; surety liability limited to labor/material costs)
- Trane Co., a div. of Am. Standard v. Whitehurst-Lassen Const. Co., 881 F.2d 996 (11th Cir. 1989) (Right to sue on bond; waiver analysis; scope of release)