Opinion
No. 00 CV 7552 (HB).
May 14, 2001.
OPINION ORDER
Plaintiffs Casa Redimix Concrete Corp. ("Casa Redimix") and Casa Building Materials Inc. ("Casa Building") (collectively, the "plaintiffs") move for summary judgment against defendants Luvin Construction Corp. ("Luvin") and International Fidelity Company ("International Fidelity") (collectively, the "defendants") on their claim for payment of construction materials pursuant to the Miller Act, 40 U.S.C. § 270 et. seq. ("Miller Act"). Defendants oppose the motion on the grounds that material facts are in dispute, and on the alternative ground that defendants should be permitted to take additional discovery pursuant to Fed.R.Civ.Pro. 56(f) before the Court decides plaintiffs' motion. Plaintiffs also move for attorneys' fees and service charges owed under their contracts. Summary judgment is granted and additional charges imposed.
BACKGROUND
On or about March 2, 2000, the United States Postal Service entered into a contract with Luvin ("Prime Contract") for the construction of the Bronx Hunts Point Station Post Office ("Project"). Pursuant to the Miller Act, Luvin, as principal, and International Fidelity, as surety, jointly and severally guaranteed Luvin's prompt payment to all persons supplying labor and/or material in prosecution of work provided for in the Prime Contract. As general contractor, Luvin sub-contracted with defendant S.R.N. Construction Corp. ("SRN") to perform certain work in connection with the Project. Thereafter, SRN entered into agreements with plaintiffs to supply materials to SRN for use in the Project. Casa Redimix claims that it delivered 183 cubic yards of concrete and related materials to SRN for incorporation in the Project, and has been paid no part of $14,645.74 owing under its contract. Casa Materials claims that it too is owed $7,500.28 under its contract with SRN to provide ribar and related materials. Defendants do not dispute that neither plaintiff has been paid, nor in fact that both plaintiffs delivered at least some materials to SRN pursuant to their individual contracts. Rather, they argue only as to the amount of goods delivered.
DISCUSSION
Summary Judgment Standard
In a motion for summary judgment, the burden is on the moving party to establish that there are no genuine issues of material fact in dispute and that it is entitled to judgment as a matter of law. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 256 (1986); Fed.R.Civ.P. 56(c). A dispute regarding a material fact is genuine "`if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'"Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520, 523 (2d Cir.) (quoting Anderson, 477 U.S. at 248), cert. denied, 506 U.S. 965 (1992). "[A] party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Fletcher v. Artex Inc., 68 F.3d 1451, 1456 (2nd Cir. 1995) (citations and quotations omitted).
Miller Act
The Miller Act requires a general contractor on a federal project to post a surety bond to protect those who supply labor and materials for the project, and enables suppliers to bring suit on the bond for any unpaid amounts, whether owed by the general contractor or one of its subcontractors. To prevail on a Miller Act claim, a supplier must establish that: (1) the materials were supplied in the prosecution of the work provided for in the contract; (2) the supplier has not been paid; (3) the supplier had a good faith belief that the materials were intended for the specified work; and (4) the plaintiffs gave written notice to defendants within 90 days of their last delivery of materials. See U.S. ex. rel. Dragone Bros. Inc. v. Moniaros Contracting Corp., 882 F. Supp. 1267, 1271 (E.D.N.Y. 1995).
Here, there is no question that both plaintiffs entered into supply contracts with SRN to provide materials for the Project; plaintiffs did in fact perform on such contracts; plaintiffs have received no payments from SRN; and plaintiffs both noticed Luvin within 90 days of their last delivery of materials. Plaintiffs have provided unrefuted documentary evidence in support of each aspect of the four prerequisites to recovery, including detailed invoices, signed delivery tickets, and the notices provided to Luvin.
Defendants halfheartedly challenged the timeliness of notice, however the Court finds that plaintiffs' documentation readily disposes of defendants' objection. Plaintiffs provided (1) copies of the signed and dated notice letters, as well as (2) copies of the "Receipt for Certified Mail" bearing dated "Received" stamps and (3) certified mail receipt cards (signed by the receiver and returned to the sender as proof of delivery). Defendants do not claim that the plaintiffs failed to timely notify Luvin, but nonetheless challenge timeliness on the ground that the "Received" stamp lacks a post office postmark, and that this absence raises suspicions. Such suspicions do not overcome plaintiffs' documentary evidence. Moreover, as plaintiffs point out, the certified mail receipt cards were signed by Luvin's president, Benny Vigliotti.
The only conceivable concern is the amount of concrete that Casa Redimix delivered to the Project site. Ashish Brahmbhatt, a Luvin construction foreman, stated in his affidavit that "[t]he court will note that Casa claimed it delivered 183 cubic yards of concrete. This is a total fabrication. The entire contract only called for 300 yards of concrete, and only about 90 cubic yards were actually delivered to the site." (Brahmbhatt Aff., ¶ 5.) Defendants offer nothing in the way of documentary evidence in support of their entirely conclusory allegation, and, in fact, undercut their own argument in the very next paragraph of Mr. Brahmbhatt's Affidavit where he concedes that "Luvin is without knowledge concerning the details of the supplies allegedly claimed to be delivered by plaintiffs." (Id. ¶ 6.) Mr. Brahmbhatt then proffered his opinion that "the amounts claimed by plaintiff are grossly overstated and inaccurate." (Id. ¶ 9.) This simply doesn't suffice; nor do defendants' recitations in their brief and affidavits of SRN's shortcomings as a subcontractor (hired and subsequently fired by Luvin) lend any weight to their argument that Casa Redimix's and Casa Materials' motion should be denied. Thus, plaintiff Casa Redimix's motion for summary judgment is granted. Since defendants offer no evidence to refute Casa Materials' invoices and signed delivery tickets, Casa Materials' motion for summary judgment is also granted.
Rule 56(f)
Defendants contend that the Court should deny plaintiffs' motion pursuant to Rule 56(f) because discovery is incomplete and defendants lack information necessary to oppose the motion. Rule 56(f) provides:
Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition [to a motion for summary judgment], the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.
Fed.R.Civ.Pro. 56(f). In this circuit, a court may deny a summary judgment motion if the nonmovant submits an affidavit which shows: (1) what facts are sought to resist the motion and how they are to be obtained; (2) how those facts are reasonably expected to create a genuine issue of material fact; (3) what effort the affiant has made to obtain them; and (4) why the affiant was unsuccessful in those efforts. See Gurary v. Winehouse, 190 F.3d 37 43 (2d Cir. 1999) (citations and quotation marks omitted).
Here, defendants submitted two affidavits, that of Mr. Brahmbhatt an another by Kevin Rockitter, in opposition to plaintiffs' motion and in support of defendants Rule 56(f) motion. Mr. Brahmbhatt stated in his affidavit that "Luvin is without knowledge concerning the details of the supplies allegedly claimed to be delivered by plaintiffs. Until we are able to depose representatives of SRN, Luvin cannot effectively oppose this motion." (Brahmbhatt Aff. ¶ 6). Mr. Rockitter, an attorney, asserted in his affidavit that defendants had impleaded SRN, but had only been able to effect service on two of the four SRN officers, as the other two were "evading service." (Rockitter Aff. ¶ 7).
Defendants have not met their burden. They have taken no discovery whatsoever, and, although they noticed depositions of the plaintiffs back in December of 2000, those depositions were never taken and it appears that they made no further efforts to obtain any testimony whatsoever. Thus, the defense has all the earmarks of a strategy of delay and little else. Defendants attach great weight to SRN's alleged misdeeds and defendants' partially unsuccessful effort to serve the officers of SRN (which, it would seem, failed to pay a number of subcontractors in addition to plaintiffs); but, while such efforts are logical — for Luvin would rather that SRN pay for its own contractual breaches — they do not explain why defendants never took plaintiffs' depositions or, apparently, served plaintiffs with interrogatories or document requests, to say nothing of when the defendants first sought to implead and serve SRN. On December 1, 2000 the parties entered into a pre-trial scheduling order directing that all discovery be completed by March 30, 2001. March 30, 2001 has come and gone, and since March 30, 2001, defendants have made no requests of the Court for an extension of time to perform discovery. Defendants cannot just sit on their hands until the eve of trial — less than 4 weeks away — and avoid summary judgment by invoking Rule 56(f). See Paddington Partners v. Bouchard, 34 F.3d 1132, 1137, 1139 (2nd Cir. 1994) ("[r]equests for discovery in the face of motions for summary judgment put forth by parties who were dilatory in pursuing discovery are disfavored"). "[T]he rule is not a shield against all summary judgment motions. Ursa Minor Ltd. v. Aon Fin. Prods., 2000 U.S. Dist. LEXIS 10166 (SDNY 2000).
Defendants requested, and the Court granted, permission to file an untimely third party summons and complaint against SRN. In granting defendants' request, however, the Court reminded the parties of the deadlines imposed by the pre-trial scheduling order.
Moreover, "in order to obtain a continuance to permit additional discovery, the proponent seeking the continuance must establish that he was denied reasonable access to material requested and that the material requested constitutes potentially favorable information." See Tucker Leasing Capital Corp. v. Main Medical Management, 833 F. Supp. 948, 955 (E.D.N.Y. 1993) (emphasis added). Defendants claim that they were deniedreasonable access to information about plaintiffs' deliveries because the SRN officers were not available for deposition. However, defendants have offered no explanation as to why they didn't attempt to obtain this information from plaintiffs, nor have they explained why there have been no depositions.
Attorneys' Fees Interest
Plaintiffs seek attorneys' fees on the ground that defendants acted in bad faith, wantonly, or for oppressive reasons in refusing plaintiffs' demands for payment. The Supreme Court held in F. D. Rich Co. v. United States, 417 U.S. 116 (1974), that attorneys' fees are not available in Miller Act cases, but suggested in dicta that that fees might be awarded when the opposing party "acted in bad faith, wantonly, or for oppressive reasons." Id. at 129. Under Second Circuit law, an action is brought in bad faith when the claim is entirely without color and has been asserted wantonly, for purposes of harassment or delay, or for other improper reasons. See Oliveri v. Thompson, 803 F.2d 1265, 1272 (2d Cir. 1986). Although defendants' performance to date has been far from impressive, and to my way of thinking in some measure reprehensible, their sins are largely in the nature of delay and inattention; thus, defendants' conduct does not warrant the award of attorneys' fees.
Attorneys' fees are available in Miller Act cases where they are "part of the contract between the subcontractor and supplier." See United States of America ex rel. Maddux Supply Co. v. St. Paul Fire Marine Ins. Co., 86 F.3d 332, 336 (4th Cir. 1996). The contract between Casa Redimix and SRN entitled Case Redimix to "all collection expenses" in the event of nonpayment. (Pl.'s Aff, Exh. D.) Although the scope of "collection expenses" is somewhat ambiguous, given that litigation is a frequent and foreseeable means of collection, the natural reading of the term encompasses attorneys' fees incurred in a collection lawsuit; thus, Casa Redimix is contractually entitled to attorneys' fees. Casa Redimix is directed to serve upon opposing counsel a detailed affidavit of services within 7 days of date hereof Defendants have seven days to serve any opposition; Casa Redimix has 3 days to reply, courtesy copies of all papers to be served in Chambers. Casa Materials is not entitled to attorneys' fees because the invoices it submitted to the Court neither expressly provided for attorney's fees nor included a "collection expenses" clause of the kind used in the Casa Redimix contract.
Plaintiffs also request that the Court order Luvin to pay "service charges" to plaintiffs. The contract between Casa Redimix and SRN provides for a "charge of 2% per month on the unpaid balance" of "invoices not paid within thirty days." (Pl.'s Exh. D); the Casa Materials invoices and delivery tickets (all of which were signed) provide for "a service charge of 1 1/2 %" for all "amounts not paid in thirty days." Since both contracts expressly provided for interest in the event of breach, plaintiffs are entitled to payment of the service charges from 30 days after the due date of each of their own invoices through the date hereof. See Maddux Supply Co., 86 F.3d at 336. Thus, plaintiffs' request for service charges is granted, and the parties are directed to calculate the service charges owed to each plaintiff based upon the invoices provided in Plaintiff's Exhibits "E" and "G," and to provide the calculations — separately, if necessary, preferably jointly — on the same schedule as the affidavit of services.
CONCLUSION
For the aforementioned reasons, plaintiffs' motion for summary judgment is granted; Casa Redimix's motion for attorneys' fees and service charges is granted; Casa Materials' motion for attorneys' fees and services charges is denied as to attorneys' fees and granted as to service charges. With respect to the attorneys' fees and service charges, the parties are to comply with the schedules set forth above.