Opinion
CIVIL ACTION 4:00-CV-236-Y
October 29, 2001
ORDER GRANTING MOTION FOR FINAL SUMMARY JUDGMENT
Pending before the Court is Plaintiff's Motion for Final Summary Judgment [doc. # 25-1], filed September 24, 2001. Having carefully considered the motion, and noting that the defendants filed no response, the Court finds that it should be GRANTED.
In its motion, Plaintiff requests that the Court enter "final summary judgment" against defendant Colonial American, pursuant to the Miller Act, 40 U.S.C. § 270a et seq. In addition, Plaintiff requests that the Court enter final judgment in favor of the plaintiff for the following:
Plaintiff also requests that the Court confirm the arbitration award for $237,067 against defendant Todd Construction Company, Inc. Because the Court confirmed the arbitration award in an order issued on September 28, 2001, it will not revisit this issue.
(a) $237,067, the amount awarded to the plaintiff in the arbitration award;
(b) $15,000 for plaintiff's attorney's fees incurred since the issuance of the arbitration award;
(c) $200 for out-of-pocket expenses;
(d) $20,000 for conditional attorney's fees in the event that either of the defendants appeals any judgment;
(e) $7,500 for conditional attorney's fees in the event that either of the defendants files an application for writ of certiorari with the United States Supreme Court;
(f) $7,500 for conditional attorney's fees in the event that the United States Supreme Court grants such application;
(g) costs of court incurred by the plaintiff in this proceeding; and
(h) pre- and post-judgment interest at the highest legal rates.
PROCEDURAL HISTORY
On March 13, 2000, Plaintiff filed a complaint against defendant Todd Construction Company, Inc. ("Todd") and defendant Colonial American Casualty Surety Company ("Colonial American"). In its complaint, Plaintiff alleged, in essence, that defendant Todd had failed to pay money owed to Plaintiff for work Plaintiff performed in conjunction with several subcontracts between Plaintiff and Todd. On June 1, the Court issued an order staying the case and compelling the parties to engage in arbitration. A panel of three arbitrators of the American Arbitration Association issued, on March 21, 2001, an award stating that defendant Todd was liable to the plaintiff in the amount of $237,067. On May 23, Plaintiff filed, inter alia, a motion to confirm the arbitration award. On September 24, Plaintiff filed a motion for final summary judgment, which is currently pending before the Court. Four days later, on September 28, the Court issued an order granting Plaintiff's motion to confirm the arbitration award.
Todd was involved in a contract with the United States government in which Todd was responsible for the construction, renovation, and repair of several buildings and houses at a naval station in Fort Worth, Texas. Todd then subcontracted some of the work to Plaintiff.
DISCUSSION
Summary judgment is proper when the record establishes that no genuine issue as to any material fact exists, and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Hill v. London, Stetelman, Kirkwood, Inc., 906 F.2d 204, 207 (5th Cir. 1990). To determine whether an issue of material fact exists, the Court must first consult the applicable substantive law to ascertain what fact issues are material to the disposition of the case. Lavespere v. Niagara Mach. Tool Works, 910 F.2d 167, 178 (5th Cir. 1990), cert. denied, 114 S.Ct. 171 (1993). The Court must then review the evidence presented, viewing the facts and inferences drawn from those facts in the light most favorable to the nonmoving party. Newell v. Oxford Management Inc., 912 F.2d 793, 795 (5th Cir. 1990); Medlin v. Palmer, 874 F.2d 1085, 1089 (5th Cir. 1989). However, the Court's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Where the movant bears the burden of proof on a claim or defense, he must establish all elements of the claim or defense to prevail on summary judgment. Western Fire Ins. Co. v. Copeland, 651 F. Supp. 1051, 1053 (S.D. Miss. 1987), aff'd, 824 F.2d 970 (5th Cir. 1987).
When the moving party has carried its summary-judgment burden, the respondent "must do more than simply show there is some metaphysical doubt as to the material facts. " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585 (1986). The respondent must produce evidence, not merely argument, in response to a movant's properly supported motion for summary judgment. See Foval v. First Nat'l Bank of Commerce, 841 F.2d 126, 129 (5th Cir. 1988); Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987).
Since the arbitration panel found in favor of Plaintiff against defendant Todd, Plaintiff requests that the Court enter summary judgment against defendant Colonial American. Plaintiff argues that Plaintiff is entitled, as a matter of law, to recover from Todd and Colonial American, jointly and severally, all amounts owed to Plaintiff because Colonial American is the payment surety, pursuant to 40 U.S.C. § 270a et seq., for defendant Todd.
The Miller Act provides protection for subcontractors like Plaintiff engaged in federal construction projects. See 40 U.S.C.A. § 270a(a)(2) (West Supp. 2001); United States ex rel. Canion v. Randall Blake, 817 F.2d 1188, 1189 (5th Cir. 1987). To protect subcontractors, the Miller Act requires general contractors engaged in federal projects, such as defendant Todd, to furnish a payment bond. See 40 U.S.C.A. § 270a(a)(2) (West Supp. 2001). The Act gives unpaid subcontractors a cause of action on this bond to recover the amounts due them. See 40 U.S.C.A. § 270b (West Supp. 2001). Because there is evidence in the record indicating that defendant Colonial American is the surety on payment bonds furnished by defendant Todd, because the Court has already confirmed the arbitration award against defendant Todd, and since defendant Colonial American did not file a response to Plaintiff's motion, the Court concludes that Plaintiff is entitled to summary judgment against defendant Colonial American.
Ordinarily, subcontractors would be protected by state liens. However, state liens cannot attach to federal property.
With respect to the arbitration award in the amount of $237,067, the Court notes that it confirmed the arbitration award in an order issued on September 28, 2001. Accordingly, the Court concludes that Plaintiff is entitled to final judgment in the amount of $237,067.
With respect to attorney's fees in the amount of $15,000 and reasonable out-of-pocket expenses of $200 incurred since the issuance of the arbitration award, the Court notes that the subcontracts between the parties include a provision addressing attorney's fees. This provision states:
Should either party employ an attorney in instituting suit or demand arbitration to enforce any of the provisions hereof, to protect its interest in any matter arising under this Agreement or to collect damages for the breach of the Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees, costs, charges, and expenses expended or incurred therein.
Accordingly, based on this contract provision and the documentation provided by Plaintiff with respect to its attorney's fees and costs, the Court finds that Plaintiff is entitled to recover attorney's fees in the amount of $15,000 and out-of-pocket expenses in the amount of $200.
With respect to the conditional attorney's fees, the Court notes that attorney's fees for appeal should only be awarded in the event of an appeal. See Keeton v. Wal-Mart Stores, Inc., 21 F. Supp.2d 653, 663 (1998). Because the defendants did not object to the amounts requested for appeal, the Court will conditionally award to the Plaintiff the following attorney's fees for appeal:
(1) $20,000 should this case be appealed to the Court of Appeals for the Fifth Circuit;
(2) $7,500 should the defendants file a writ of certiorari with the United States Supreme Court; and
(3) an additional $7,500 should the United States Supreme Court grant the defendants' writ of certiorari.
The Court notes that in Plaintiff's Motion for Final Summary Judgment, Plaintiff does not request an additional conditional award of $7,500 for attorney's fees in the event that either of the defendants files an application for writ of certiorari that is granted. However, because the plaintiff asks for this additional sum in its brief in support of its motion, the Court will grant the request.
With respect to Plaintiff's request for costs of court incurred in this proceeding, the plaintiff does not specify exactly what costs it incurred. The Court assumes that Plaintiff is referring to the $150 filing fee that Plaintiff was required to file to initiate its suit in this Court. Because the provision in the contract referring to attorney's fees provides for such costs to be recovered, the Court finds that Plaintiff is entitled to $150 for costs of court.
With respect to Plaintiff's request for pre-judgment interest, the subcontracts, in a section titled "Late Payment Interest," state:
"Pre-judgment interest is compensation allowed by law as additional damages for lost use of the money due as damages during the lapse of time between accrual of the claim and the date of judgment." Adams v. HH Meat Products, Inc., 41 S.W.3d 762, 780 (Tex.App. 2001).
Progress payments or final payment due and unpaid under this Agreement shall bear interest from the day after the required payment date until the date on which payment of the amount due is made. Interest shall be computed on the basis of the Federal Cost of Money Rate (Re-negotiation Rate). ( 31 U.S.C. § 3902 (a)).
In this case, Plaintiff has not provided the Court with any information regarding when the required payment from defendant Todd Construction Company, Inc. was initially due to Plaintiff. There is evidence in the record that indicates that the parties mutually agreed to terminate their subcontracts in December 1999. Additionally, there is an accounts-receivable statement from Plaintiff, dated February 9, 2000, that indicates defendant Todd owed the plaintiff a sum of money for work that Plaintiff had performed prior to the subcontract's being terminated. Thus, the Court concludes that interest began accruing on February 10, 2000. According to the Federal Register, the interest rate (re-negotiation rate) at that time was 6.75% per annum. 64 Fed. Reg. 71, 851 (Dec. 22, 1999). Therefore, pre-judgment interest now totals $27,487.68
Interest will be calculated from February 10, 2000 through October 28, 2001, the day before the date judgment is rendered. Judgment of $237,067 x 6.75% = $16,002 per year/ 365 days per year = $43.84 per day. February 10, 2000 through October 28, 2001 is 627 days. (The Court notes that the year 2000 was a leap year and so February contained 29 days.) Thus, 627 x $43.84/day = $27,487.68
With respect to Plaintiff's request for post-judgment interest, federal law governs calculation of interest after a judgment is rendered. See 28 U.S.C.A. § 1961(a) (West Supp. 2001). According to 28 U.S.C. § 1961(a), post-judgment interest is "calculated from the date of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield ("weekly average yield"), as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment." Id. Because the last weekly average yield was 2.37%, post judgment interest shall accrue at 2.37 percent per annum. Id. In this case, the arbitration award ($237,067), attorney's fees ($15,000), expenses ($200), costs of court ($150), and pre-judgment interest ($27,487.68) total $279,904.68, or the amount of the judgment. Therefore, interest shall accrue on the judgment at $18.17 per day until paid.
Judgment amount of $279, 904.68 x 2.37% = $6,633.74 per year/ 365 days in a year = $18.17 per day.
Based on the foregoing, it is ORDERED that Plaintiff's motion for summary judgment against defendant Colonial American is GRANTED. Defendant Todd and defendant Colonial American are liable, jointly and severally, for all amounts owed to Plaintiff.
It is further ORDERED that Plaintiff shall recover $237,067 for the arbitration award, $15,000 in attorney's fees incurred since the issuance of the arbitration award, $200 for expenses, $150 for costs of court, and $27,487.68 for pre-judgment interest from the defendants.
It is further ORDERED that post-judgment interest shall accrue at $18.17 per day until the judgment is paid.
It is further ORDERED that the judgment includes a conditional award of appellate fees totaling $35,000, as outlined above.