Opinion
CV 00-6052-BR
May 7, 2001
J. WILLIAM BENNETT J. William Bennett, P.C. Cannon Beach, OR., Attorney for use Plaintiff Envision Painting.
JOSEPH O. DAGGY, Daggy Anagnostou, P.S. Longview, WA Attorneys for Defendants.
OPINION AND ORDER
This matter is before the Court on Plaintiff's Motion for Summary Judgment (#29) and Defendants' Motion for Summary Judgment (#30).
Envision brought an action under the Miller Act, 40 U.S.C. § 270a, to recover money for painting and tile-setting work performed under a sub-contract with Defendant Nu West Enterprises, Inc. Defendants Nu West and American Motorists Insurance Company assert counterclaims for money damages in which they contend Envision violated its contract by failing to properly complete the work. Defendants also seek the return of an advance payment to Envision and sums charged by Envision on Nu West's credit card without Nu West's permission. The Court has subject matter jurisdiction over this action pursuant to 40 U.S.C. § 270b(b).
For the reasons discussed below, both Plaintiff's Motion for Summary Judgment and Defendants' Motion for Summary Judgment are DENIED.
SUMMARY OF RELEVANT FACTS
This summary of relevant, undisputed facts is taken from the Pre-Trial Order (#24).
Envision is an Oregon partnership of Joyce Zeppetella and Steve Zeppetella with its principal place of business in Seaside, Oregon. Nu West is a California corporation with its principal place of business in Huntington Beach, California. Nu West is not registered or licensed with the Construction Contractors Board of the State of Oregon. American Motorists is an Illinois corporation licensed to transact corporate-paid surety business on federal contracts performed in Oregon.
In March 1998, Nu West was awarded a contract by the United States Coast Guard to complete construction work at certain specified locations including the Yaquina Bay Coast Guard Station in Newport, Oregon, and the Portland Coast Guard Station in Portland, Oregon. Nu West, as principal, and American Motorists, as surety, executed a payment bond for Nu West's contract with the Coast Guard.
In January 1999, Nu West issued a sub-contract to Envision to perform painting and ceramic tile work at the Yaquina Bay Station. In April 1999, Envision agreed to install and paint a metal stair case at the Portland Station at Nu West's request.
STANDARDS
Fed.R.Civ.P. 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show an absence of any issue of material fact. Hanon v. Dataproducts Corp., 976 F.2d 497, 500 (9th Cir. 1992). Evidence that is not significantly probative does not present a genuine issue of material fact. United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.), cert. denied, 493 U.S. 809 (1989).
The substantive law governing a claim or defense determines whether a fact is material. Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). The Court must resolve against the moving party all reasonable doubts about whether issues of material fact exist and the Court must view all inferences drawn from the facts in the light most favorable to the non-moving party. Id. When the non-moving party's claims are factually implausible, however, that party must come forward with more persuasive evidence than would otherwise be required. California Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987), cert. denied, 484 U.S. 1006 (1988).
When both parties move for summary judgment, the Court must evaluate each side's motion on its own merits and draw all inferences in favor of the non-moving party. Chevron USA, Inc. v. Cayetano, 224 F.3d 1030, 1037 n. 5 (9th Cir. 2000).
DISCUSSION
1. Envision is Not Entitled to Summary Judgment
Envision moves for summary judgment and seeks dismissal of Defendants' First and Second Counterclaims. Envision first maintains Oregon state substantive law applies to Defendants' counterclaims. Envision contends neither Nu West nor its surety may bring counterclaims for money damages because Nu West is not registered or licensed with the Oregon Construction Contractors Board.
In support of its Motion, Envision relies upon Or. Rev. Stat. § 701.065 ("License required to obtain judicial or administrative remedy; exception"), which provides in relevant part that "a contractor may not perfect a claim of a construction lien, or commence a claim with the Construction Contractors Board, in arbitration or in any court of this state for compensation for the performance of any work or for the breach of any contract for work that is subject to this chapter, unless the contractor had a valid license issued by the board." Envision argues Or. Rev. Stat. § 701.065 does not contain an exception from the licensure obligation when a contractual dispute arises between two private contracting parties regarding construction work performed on a federal enclave.
Defendants counter Nu West is exempt from the licensure requirement pursuant to Or. Rev. Stat. § 701.010 ("Application"). That statute provides in pertinent part:
The following persons are exempt from licensure under this chapter:
* * *
(2) A person who is constructing, altering, improving or repairing a structure located within the boundaries of any site or reservation under the jurisdiction of the federal government.
Envision acknowledges the construction work at issue was performed on federal enclaves. Envision further acknowledges it is not necessary for Nu West to be licensed as a contractor in Oregon in order to contract validly with the United States to perform construction work on federal enclaves in Oregon. Envision argues, however, § 701.065 plainly means a contractor may not assert claims relating to the work performed unless the contractor is properly licensed at the time it contracts for construction work and remains licensed while the work is being performed. Envision points out there is no express cross-reference in § 701.065 to the exception stated in § 701.010(2).
State law controls the interpretation of Miller Act subcontracts in a dispute between a prime contractor and subcontractor. United States for Use of Palmer Const., Inc. v. Cal State Elec., Inc., 940 F.2d 1260, 1261 (9th Cir. 1991) (citation omitted). When interpreting a statute under Oregon law, the court's task is to discern the intent of the legislature. Portland General Elec. Co. v. Bureau of Labor and Industries, 317 Or. 606, 610-11, 859 P.2d 1143 (1993). The best evidence of the legislature's intent is the text of the statute. Id. at 610-11. Also, at the first level of analysis, the court must consider the context of the statutory provision at issue including other provisions of the same statute and other statutes relating to the same subject. Id. (citation omitted).
Or. Rev. Stat. Chapter 701 is titled "Construction Contractors." Section 701.065, upon which Envision relies, clearly applies only to claims "for compensation for the performance of any work or for the breach of any contract for work that is subject to this chapter" (emphasis added). Section 701.010(2) unambiguously provides a person engaged in construction activity "within the boundaries of any site or reservation under the jurisdiction of the federal government" is "exempt from licensure under this chapter" (emphasis added).
The text and context of §§ 701.010 and 701.065 plainly provide contractors on projects under the jurisdiction of the United States are not required to be licensed with the State of Oregon in order to assert a claim arising from the performance of such work. Accordingly, Envision's Motion for Summary Judgment is denied.
2. Defendants Are Not Entitled to Summary Judgment
Defendants request summary judgment on the following issues:
(a) Plaintiff's liability to Defendants;
(b) Plaintiff's poor, substandard, and shoddy workmanship, which was inferior to industry standards;
(c) Plaintiff's failure to repair defective tile work and Plaintiff's later abandonment of the job;
(d) Plaintiff's lack of entitlement to recover on its claims because Plaintiff violated its contract, performed work negligently, failed to satisfy one or more conditions precedent, failed to give consideration, Plaintiff failed to perform work that met approval of the United States as required under the contract;
(e) Plaintiff's failure to complete work under the contract including shelving not installed and touch-up painting not completed;
(f) Plaintiff's liability to Defendant for offsets and damages;
(g) Defendants' entitlement to offsets and damages in the amounts claimed;
(h) Defendants' entitlement to recover the advance payment Nu West made to Plaintiff and to recover unauthorized charges made by Plaintiff on Nu West's credit card in the amounts claimed.
Defendants maintain there is no genuine issue as to any material fact, and they are entitled to judgment as a matter of law on each of the above issues. In support of their Motion, Defendants submitted excerpts of the depositions of one of Envision's owners, Steven Zepptella, and of Nu West's Project Manager, Nicholas H. Davenport.
In response, Envision submitted the Affidavit of Steve Zeppetella. Envision argues the evidence submitted by Defendants does not support Defendants' Motion, and the testimony of Steven Zeppetella in the deposition excerpts provided by Defendants and in the Zeppetella Affidavit establishes the existence of genuine issues of material fact that preclude summary judgment for Defendants.
After reviewing the record, the Court concludes genuine issues of material fact exist on each issue raised by Defendants and, therefore, Defendants' Motion for Summary Judgment is denied.
CONCLUSION
Based on the foregoing, Plaintiff's Motion for Summary Judgment (#29) is DENIED, and Defendant's Motion for Summary Judgment (#30) is DENIED.
IT IS SO ORDERED.