Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Fidelity and Deposit Co. of Maryland v. Big Town Mechanical, LLC

United States District Court, D. Nevada

November 2, 2017

Fidelity and Deposit Company of Maryland, Plaintiff
v.
Big Town Mechanical, LLC, and Travelers Casualty and Surety Company of America, Defendants

          ORDER GRANTING MOTION TO DISMISS SIXTH CAUSE OF ACTION WITH LEAVE TO AMEND [ECF NO. 193]

          JENNIFER A. DORSEY, UNITED STATES DISTRICT JUDGE.

         This contractor-default case involves two tiers of contracts, bonds, sureties, and principals and the consequences that follow when the lower-tier principal defaults. Defendant Travelers Casualty and Surety Company of America moves to dismiss plaintiff Fidelity and Deposit Company of Maryland's sixth cause of action for statutory violations, arguing that Fidelity has not alleged that it is a contractor or standing in a contractor's shoes, so it does not have standing to bring this claim.[1]I find that Fidelity's first-amended complaint fails to allege facts to support its standing to bring this claim and that its claim for violations of NRS 338.400 et seq. is too vague to put Travelers on fair notice of its nature. So I grant the motion to dismiss with leave to amend.[2]

         Background[3]

         In 2010, Clark County School District (CCSD) contracted with Big Town to install HVAC systems at five elementary schools. The contract required Big Town to take out performance-and-labor and material-payment bonds for the installation at each school. Big Town obtained performance and payment bonds from Travelers, and Big Town became the principal and CCSD the obligee. In the event that Big Town defaulted on its obligation under the contract, Travelers would complete Big Town's performance.

         Big Town subcontracted with F.A.S.T. Systems, Inc.-a party that is not involved in this coverage-dispute litigation-to work on the HVAC-installation projects at each of the schools. The subcontract required F.A.S.T. to take out performance-and-labor and material-payment bonds, just as Big Town had done for CCSD. F.A.S.T. obtained performance and payment bonds from Fidelity, and F.A.S.T. became the principal and Big Town the obligee. In the event that F.A.S.T. defaulted on its obligation, Fidelity would complete F.A.S.T.'s performance.

         F.A.S.T. defaulted on the project at all five schools, so Fidelity hired Perini Building Company-another party that is not involved in this litigation-to complete the projects and made payments to Big Town in excess of $75, 000 under each of the five bonds. Fidelity now sues Travelers and Big Town for, among other things, violating NRS §§ 624.624 (Nevada's statute governing payment of lower-tiered subcontractors) and 338.400 et seq. (Nevada's rules for progress payments on public-works contracts) because they did not pay Fidelity the remaining contract funds or give Fidelity written justifications for withholding the payments. Travelers argues that Fidelity has not pled enough facts to show that it has standing to bring this sixth cause of action and that its sweeping allegation that Travelers violated NRS § 338.400 et seq. does not give Travelers adequate notice of which law or laws it violated. I agree, so I dismiss this claim with leave to amend.

         Discussion

         A. Motion-to-dismiss standard

         Federal Rule of Civil Procedure 8 requires every complaint to contain “[a] short and plain statement of the claim showing that the pleader is entitled to relief.”[4] While Rule 8 does not require detailed factual allegations, the properly pled claim must contain enough facts to “state a claim to relief that is plausible on its face.”[5] This “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation”; the facts alleged must raise the claim “above the speculative level.”[6] In other words, a complaint must make direct or inferential allegations about “all the material elements necessary to sustain recovery under some viable legal theory.”[7]

         District courts employ a two-step approach when evaluating a complaint's sufficiency on a Rule 12(b)(6) motion to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint, recognizing that legal conclusions are not entitled to the assumption of truth.[8] Mere recitals of a claim's elements, supported only by conclusory statements, are insufficient.[9] Second, the court must consider whether the well-pled factual allegations state a plausible claim for relief.[10] A claim is facially plausible when the complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct.[11] A complaint that does not permit the court to infer more than the mere possibility of misconduct has “alleged-but not shown-that the pleader is entitled to relief, ” and it must be dismissed.[12]

         B. Statutory-violations claim

         Fidelity claims that Travelers and Big Town violated NRS §§ 624.624 and 338.400[13] et seq. by “failing to respond to [Fidelity]'s requests for payment of the remaining contract funds, and specifically by failing to give written notice to [Fidelity] of any objections to [Fidelity]'s request and to provide written justifications for any withholdings.”[14] Travelers argues that §§ 624.624 and 338.400 et seq. provide rights and protections to contractors and that Fidelity fails to allege that it is a contractor within the meaning of the statutes.

         Fidelity responds that it is a contractor under the statutory definition, but it doesn't need to be a contractor on its own because it stands in the subcontractor's (F.A.S.T.'s) shoes when asserting its statutory-violations claims. Without disputing Fidelity's ability to stand in a contractor's shoes, Travelers simply argues that Fidelity did not adequately allege in its statutory-violations claim that it is standing in a contractor's shoes.[15] Fidelity counters that it alleged in ¶ 56 of the first-amended complaint that it “completed the FAST subcontracts and is therefore also ‘in the shoes' of FAST” and then incorporated that allegation into its statutory-violations claim in ¶ 72.[16]

         Fidelity materially overstates its own allegation. Fidelity's complete ¶ 56 allegation reads: “Fidelity completed the FAST subcontracts and is therefore also ‘in the shoes' of FAST in making its bond claim.”[17] Even though Fidelity incorporates ¶ 56 through ¶ 72 into its statutory-violations claim, ¶ 56 expressly limits Fidelity's derivative-standing allegation to its bond claim. So placing that limited-standing allegation into its statutory-violations claim does not result in Fidelity pleading in-the-shoes standing for this statutory-violations ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.