Opinion
Civil Action No. 00-2338-GTV.
December 21, 2000.
MEMORANDUM AND ORDER
Plaintiff Ferguson Enterprises, Inc. brings this action alleging that Defendants are liable under the Miller Act, 40 U.S.C. § 270a and 270b, and state law for materials supplied for a project at McConnell Air Force Base in Wichita, Kansas. The case is before the court on defendants St. Paul Fire Marine Insurance Co. and BRAL Environmental Services, Inc.'s motions to dismiss (Docs. 7 and 11) for failure to state a claim under the Miller Act. For the reasons set forth below, the court denies the motions to dismiss.
I. STANDARD
Defendants move to dismiss Plaintiff's complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted.
A Rule 12(b)(6) motion to dismiss will be granted only if it appears beyond a doubt that the plaintiff is unable to prove any set of facts entitling him to relief under his theory of recovery. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). "All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true."Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. 1984). The court must view all reasonable inferences in favor of the plaintiff, and the pleadings must be liberally construed. See id.; Fed.R.Civ.P. 8(f). The issue in reviewing the sufficiency of a complaint is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support his claims. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v. Fiztgerald, 457 U.S. 800 (1982).
II. DISCUSSION
Defendants St. Paul Fire Marine Insurance Co. and BRAL Environmental Services, Inc. urge this court to dismiss Plaintiff's complaint for failure to state a claim under the Miller Act. In count I, Plaintiff seeks to recover $27,133.38, plus interest and past-due service charges, on a project payment bond made pursuant to the Miller Act for materials Plaintiff furnished for the McConnell Air Force Base project. Defendant BRAL Environmental Services, Inc. and its surety, defendant St. Paul Fire Marine Insurance Co., provided the payment bond for the project.
In their motions, Defendants contend that Plaintiff has failed to state a claim under the Miller Act because Plaintiff did not have a contract with the prime contractor of the project (i.e., defendant BRAL Environmental Services, Inc.) or with the subcontractor (i.e., defendant Courtney Day, Inc.). Protection afforded to materialmen under the Miller Act is limited to those entities under contract with the prime contractor and those who contract with a subcontractor of the prime contractor. See 40 U.S.C. § 270b(a); see also, J.W. Bateson Co. v. Bd. of Trustees, 434 U.S. 586, 590-91 (1978). Defendants St. Paul Fire Marine Insurance Co. and BRAL Environmental Services, Inc. contend that Plaintiff is a third tier subcontractor, and because protection of a payment bond extends no further than to second tier subcontractors, Plaintiff cannot state a claim under the Miller Act. See id.
Defendants outline the contractual relationships from their perspective: Defendant BRAL Environmental Services, Inc., as the prime contractor, entered into a contract with the United States for the McConnell Air Force Base project. BRAL Environmental Services, Inc. then entered into a subcontract with defendant Courtney Day, Inc. Courtney Day, Inc., in turn, contracted with defendant Mid-Kansas Plumbing Technicians, Inc. to provide plumbing and mechanical work on the project. Mid-Kansas Plumbing Technicians, Inc. then contracted with Plaintiff for materials.
Plaintiff responds that it has stated a claim under the Miller Act because defendants BRAL Environmental Services, Inc. and Courtney Day, Inc. should be treated as one entity. Plaintiff argues that the court should pierce the corporate veil and treat the two entities as one, thereby making defendant Mid-Kansas Plumbing Technicians, Inc. a subcontractor of the project. If defendants BRAL Environmental Services, Inc. and Courtney Day, Inc. are treated as one entity, Plaintiff becomes a second tier subcontractor and states a claim under the Miller Act.
The court notes that the standard at the motion to dismiss stage is only whether the plaintiff is entitled to offer evidence to support its claims, not whether the plaintiff will prevail. After reviewing the pleadings, the court concludes that Plaintiff has stated a claim. Plaintiff's allegations allude to the possibility of common control of the two entities. See e.g., Cotracom Commodity Trading AG v. Seaboard Corp., 94 F. Supp.2d 1189, 1195 (D.Kan. 2000). For example, Plaintiff alleges (1) that BRAL Environmental Services, Inc. and/or Courtney Day, Inc. contracted with the United States and Mid-Kansas Plumbing; (2) that BRAL Environmental Services, Inc. and Courtney Day, Inc. have the same business address; and (3) that the only member of BRAL Environmental Services, Inc. is Doris Harris, and the only member of Courtney Day, Inc. is Elbert Harris, yet correspondence has been mailed to Elbert Harris of BRAL Environmental Services, Inc. Additionally, Plaintiff's allegations allude to the possible use of the corporate entity in promoting injustice or fraud. See Doughty v. CSX Transp., Inc., 905 P.2d 106, 111 (Kan. 1995). Plaintiff alleges that BRAL Environmental Services, Inc.'s expertise is limited to providing services to remove environmental concerns, while Courtney Day, Inc. provides services in construction management and general contracting. While courts are reluctant to pierce the corporate veil and impose alter ego status, viewing all reasonable inferences in favor of Plaintiff, the court cannot conclude that Plaintiff is unable to prove any set of facts entitling it to relief.
IT IS, THEREFORE, BY THE COURT ORDERED that defendants St. Paul Fire Marine Insurance Co. and BRAL Environmental Services, Inc.'s motions to dismiss (Docs. 7 and 11) are denied.
Copies of this order shall be mailed to counsel of record for the parties.
IT IS SO ORDERED.