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The Erection Co. v. Archer Western Contractors, LLC

United States District Court, District of Nevada

March 4, 2015

THE ERECTION COMPANY, et al., Plaintiffs,




This Order addresses the following pending motions: (1) The Erection Company’s (“TEC”) Motion for Summary Judgment Against Postel Industries (“Postel”)[1] on Its Counter-Claim (Re: Postel’s Abandonment) (dkt. no. 151); (2) TEC’s Motion for Summary Judgment Against Archer Western Contractors (“Archer”) on All Claims (Re: Invalid Assignment) (dkt. no. 152); (3) TEC’s Motion for Partial Summary Judgment Against Archer on Its Affirmative Claims (Re: Standing In Postel’s Shoes) (dkt. no. 153); (4) Postel’s Motion for Summary Judgment Against TEC (dkt. no. 154); (5) Defendant Travelers Casualty and Surety Company of America’s (“Travelers”) Motion for Partial Summary Judgment (dkt. no. 158); (6) Archer’s Motion for Partial Summary Judgment on The Third Cause of Action of Its Crossclaim Against Postel (dkt. no. 159); (7) Archer’s Motion for Summary Judgment on the Third and Fourth Causes of Action of Postel’s Crossclaims Against Archer (dkt. no. 160); (8) Archer’s Motion for Summary Judgment on Plaintiff’s First and Second Claims for Relief (dkt. no. 161); (9) Archer’s Motion for Partial Summary Judgment on Plaintiff’s Third Claim for Relief (dkt. no 162); (10) Archer’s Motion for Partial Summary Judgment on the First Cause of Action of its Counterclaim Against Plaintiff (dkt. no. 163); (11) Archer’s Motion to Strike or Disregard the Affidavit of Danny Lucas (dkt. no. 201); and (12) TEC’s Motion for Clarification and/or Relief from Order (dkt. no. 218).[2] Travelers joined in all four of TEC’s motions. (Dkt. nos. 155, 156, 157, 219.)


This dispute arises from the construction of a new air traffic control tower at McCarran International Airport (“the Project”). Clark County leased the property to the Federal Aviation Administration (“FAA”) in order to build the control tower. (Dkt. no. 86-2.) On September 3, 2010, the FAA hired Archer to be the general contractor on the Project. (Dkt. no. 85 at 3; dkt. no. 96 at 8.) In May 2011, Archer hired Postel as the subcontractor for steel fabrication and installation, and Postel, in turn, hired TEC as the subcontractor for steel installation.[3] (Dkt. no. 85 at 3-4; dkt. no. 96 at 10; dkt. no. 27 at 10.) The contract between Archer and Postel (“Postel Subcontract”) expressly incorporated the prime contract between Archer and the FAA (dkt. no. 96-4 at 2); the contract between Postel and TEC (“TEC Subcontract”) expressly incorporated the Postel Subcontract (dkt. no 88-5 at 2).[4] Archer obtained a payment bond and a performance bond from Travelers. (Dkt. no. 85 at 9; dkt. no. 96 at 8.)

According to TEC, it expected to start work after Archer installed the rebar and concrete to form the tower walls up to approximately the fifth level. (Dkt. no. 86 at 4.) At that point, TEC would begin installing structural steel anchored to the concrete walls to support the stairs, landings, and deck that it would also install. (Id.) TEC would then generally follow behind Archer’s work by about two floors. (Id.) TEC commenced work on November 14, 2011, and completed work through level 12. (Id.) However, a dispute arose about alleged performance and payment that led Postel to assign the TEC Subcontract to Archer, and that prompted TEC to issue notices of intent to stop work.

With respect to performance, on November 19, 2011, Archer put Postel on notice that the FAA’s inspectors had discovered deficiencies in the stairs that Postel had delivered to the Project and that the issue was affecting the Project schedule. (Dkt no. 96-5.) On January 3, 2012, Archer requested that Postel submit a recovery schedule for stair no. 3 because Postel and TEC were behind schedule and were more than two floors below Archer’s concrete operation. (Dkt. no. 96-7.) On January 13, 2012, Archer sent Postel another letter to relate that Postel had not provided a recovery schedule and to provide notice that Archer would be withholding all future payments to Postel until issues identified in the letter had been addressed. (Dkt. no. 96-8.) On February 20, 2012, Archer served Postel with a “Notice to Cure, ” stating that Postel had failed to comply with the parties’ contract terms and that Postel had informed Archer that it “no longer wishes to perform contractual obligations.” (Dkt. no. 86-9.)

In the meantime, on February 16, 2012, TEC issued to Postel a “Notice of Intent to Stop Work” because, according to TEC, it had yet to be paid for any of its work. (Dkt. no. 85 at 14; dkt. no. 86-8.) In that Notice, TEC stated that Postel owed at least $80, 000.00 for two months of base-contract work and for extra work billed; TEC demanded payment within ten (10) days. (Dkt. no. 88-8.) On February 22, 2012, TEC notified Postel that it had learned from Archer that Postel had abandoned the Project, which TEC construed to be a material breach of the TEC Subcontract. (Dkt. no. 86-10.) TEC stated that it “is immediately stopping all work on the Project.” (Id.) On February 24, 2012, TEC notified Archer that it would be stopping work on February 28, 2012.[5] (Dkt. no. 86-15.) TEC stopped work as noticed.[6] (Dkt. no. 86-16.)

On February 24, 2012, Archer sent TEC a letter along with payment on behalf of Postel in the amount of $54, 645.30 for what Archer characterized as “properly supported and documented pay applications through the end of December, 2011.”[7] (Dkt. no. 96-9.) In the same letter, Archer acknowledged that there may be invoices for extra work but contended that TEC had not submitted proper supporting documents; Archer invited TEC to provide the documentation. (Id.) Archer claims that TEC did not submit the requested documentation. (Dkt. no. 96-1 ¶ 29.) TEC claims no further documentation was needed because it had provided all supporting documents to Postel. (Dkt. no. 182 at 6; dkt. no. 86 at 5-6.) In a letter dated February 27, 2012, Archer informed TEC that Postel had not abandoned the Project and was involved and committed to work with Archer to fulfill Postel’s contractual obligations to Archer. (Dkt. no. 96-10.) Archer contended that the Postel Subcontract, which was incorporated into the TEC Subcontract, provides for the assignment of the TEC Subcontract to Archer. (Id.) Archer also insisted that TEC had no legitimate reason to stop work. (Id.) On February 28, 2012, TEC gave Postel further Notice of Intent to Terminate in fifteen (15) days (on March 14, 2012).[8] (Dkt. no. 86-18.) On March 2, 2012, TEC notified Postel that it had ceased work and demobilized from the Project as a result of Postel’s failure to pay and abandonment of the Project. (Dkt. no 86-19.)

On March 1, 2012, Archer and Postel entered into an Assignment Agreement (“the Assignment”) where Postel agreed to assign all of “its rights and obligations under the TEC Subcontract” to Archer. (Dkt. no. 96-1 ¶ 32; dkt. no. 96-11.) The next day, Archer notified TEC that it had taken an assignment of the TEC Subcontract. (Dkt. no. 86-20.) Archer again disputed TEC’s contention that Postel had abandoned the Project and that TEC had not been paid for all properly supported payment applications through December. (Id.) Archer further took the position, which TEC disputes, that TEC was in default and issued a notice to cure. (Id.) TEC acknowledged notice of the assignment of the TEC Subcontract and indicated its willingness to re-mobilize and return to the Project provided that Archer pay three enumerated past due amounts totaling about $52, 147.00. (Dkt. no. 96-13.) Archer rejected TEC’s payment demand and insisted that TEC remobilize and agree to “the terms of the new project recovery schedule via change order and accept a back charge in the amount of $72, 356 for the direct delay” caused by TEC. (Dkt. no. 96-14.) On March 15, 2012, Archer declared TEC to be in default. (Dkt. no. 96-15.)

TEC’s First Amended Complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment against Postel and Archer. (Dkt. no. 48.) Archer asserts claims for breach of contract and negligence against TEC, and claims for contractual indemnity and breach of contract against Postel. (Dkt. no. 9.) Postel similarly asserts claims for breach of contract and negligence against TEC, and claims for contractual indemnity and breach of contract against Archer. (Dkt. no. 27.) All three parties assert separate claims against Travelers on the payment and performance bonds. (Id.; dkt. nos. 48, 9.)

TEC subsequently moved for summary judgment against Postel on its counterclaim for breach of contract. (Dkt. no. 85.) The Court denied TEC’s motion, and TEC now seeks clarification and reconsideration. (Dkt. nos. 217, 218.)


A. Summary Judgment

The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court. Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995). “The amount of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties' differing versions of the truth at trial.’” Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Service Co., 391 U.S. 253, 288–89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). “In order to carry its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party’s claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). Once the moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, ” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., 285 F.3d 764, 783 (9th Cir. 2002) (internal citations omitted). “The mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient.” Anderson, 477 U.S. at 252.

B. Clarification And Reconsideration

Under Fed.R.Civ.P. 60(b), a court may relieve a party from a final judgment, order or proceeding only in the following circumstances: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a satisfied or discharged judgment; or (6) any other reason justifying relief from the judgment. Backlund v. Barnhart, 778 F.2d 1386, 1387 (9th Cir. 1985). “Relief under Rule 60(b)(6) must be requested within a reasonable time, and is available only under extraordinary circumstances.” Twentieth Century-Fox Film Corp. v. Dunnahoo, 637 F.2d 1338, 1341 (9th Cir. 1981) (internal citations omitted). A motion for reconsideration must set forth the following: (1) some valid reason why the court should revisit its prior order; and (2) facts or law of a “strongly convincing nature” in support of reversing the prior decision. Frasure v. United States, 256 F.Supp.2d 1180, 1183 (D. Nev. 2003). On the other hand, a motion for reconsideration is properly denied ...

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