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United States v. GSC Construction, Inc.

United States District Court, M.D. Georgia, Columbus Division

November 16, 2017

UNITED STATES OF AMERICA, for the use and benefit of DEBOURGH MANUFACTURING COMPANY, Plaintiff,
v.
GSC CONSTRUCTION, INC., and ALLIED WORLD SPECIALTY INSURANCE COMPANY, f/k/a Darwin National Assurance Company, Defendants.

          ORDER

          CLAY D. LAND CHIEF U.S. DISTRICT COURT JUDGE MIDDLE DISTRICT OF GEORGIA

          In November 2014, the United States Army Corps of Engineers (“Army”) awarded a contract for a renovation project on Fort Benning to Defendant GSC Construction (“GSC”). Pursuant to the Miller Act, 40 U.S.C. § 3131-34, GSC posted performance and payment bonds, with Defendant Allied World Specialty Insurance Company (“Allied”) as surety. As part of the renovation, the Army required GSC to install storage lockers in the buildings. GSC solicited quotes from multiple subcontractors for the manufacture and installation of lockers that complied with the contract specifications. GSC submitted various locker options to the Army that GSC believed complied with the specifications. Nevertheless, the Army rejected all but the most expensive option, a storage locker with woven wire mesh manufactured by Plaintiff Debourgh Manufacturing Company (“Debourgh”). The woven wire lockers cost $321, 943.52. After completion of the project, GSC only paid Debourgh $172, 494.07. Debourgh subsequently brought this action and alleged claims of breach of contract and quantum meruit. Debourgh also brought a claim on the Miller Act payment bond. Debourgh also sued for unexpected costs it allegedly incurred during installation and for an award of attorney's fees. Defendants contend that Debourgh improperly caused the Army to reject the lower-cost proposals and to insist on Debourgh's more expensive product. GSC therefore argues that Debourgh should be equitably estopped from recovery. GSC also brought a counterclaim against Debourgh for tortious interference with its contract with the Army. Debourgh filed a Motion for Partial Summary Judgment on its Miller Act claim, against GSC's counterclaim, and for the costs of the action (ECF No. 17). Because Defendants cannot establish that Debourgh's communications with the Army influenced the Army's requirement for woven wire mesh lockers, the Court grants Debourgh's motion with respect to its Miller Act claim and GSC's counterclaim. Further, because Defendants pointed to no evidence or law to the contrary, the Court concludes that Debourgh is entitled to accrued finance charges on GSC's unpaid balance. Finally, the Court denies Debourgh's motion for costs pending the outcome of Debourgh's remaining claims.

         STANDARD

         Summary judgment may be granted only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In determining whether a genuine dispute of material fact exists to defeat a motion for summary judgment, the evidence is viewed in the light most favorable to the party opposing summary judgment, drawing all justifiable inferences in the opposing party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A fact is material if it is relevant or necessary to the outcome of the suit. Id. at 248. A factual dispute is genuine if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Id.

         FACTUAL BACKGROUND

         Viewed in the light most favorable to the non-movants, the record reveals the following:

         I. Debourgh's 2013 Project

         Sometime in 2013, Debourgh manufactured and installed woven wire mesh TA-50 equipment storage lockers for a different project on Fort Benning. Salo Dep. 37:13-17, ECF No. 25-2. Debourgh's point of contact with the Army for that project was First Lieutenant Aaron Boyer. GSC was not involved in the 2013 project.

         II. Buildings 2944-2945 Project

          In November 2014, the Army awarded GSC a contract for the renovation of Buildings 2944 and 2945 on Fort Benning. One of the requirements of the contract was to install equipment lockers in the renovated buildings. The contract set forth some specifications for the lockers, but it did not require the use of woven wire mesh. In January 2015, GSC vice president John Phillips sent an email to Debourgh requesting a quote for lockers that complied with the specifications in the contract. Phillips attached pictures of the Debourgh lockers from the 2013 project to his email. Phillips explained that the lockers in the attached pictures were the ones that GSC needed for the 2944-2945 project. Berg Decl. Ex. A, Email from Phillips to Debourgh Sales (Jan. 30, 2015), ECF No. 17-2 at 10. In response, Debourgh sales representative Patrick Berg sent GSC a quote of $309, 480.10 for the woven wire mesh lockers that matched the lockers in the picture. Berg Decl. Ex. B, Woven Wire Mesh Quote (Feb. 16, 2015), ECF No. 17-2 at 21. Berg also sent GSC a quote of $265, 124.38 for expanded metal mesh lockers. Berg Decl. Ex. C, Expanded Metal Mesh Quote (Feb. 16, 2015), ECF No. 17-2 at 24.

         GSC also solicited quotes from Lyon Workspaces, a competing locker manufacturer. In June 2015, GSC submitted Lyon lockers to the Army at a cost of $170, 065.00. Def. Allied's Resp. Ex. D, Letter from GSC to Army, ECF No. 24-4 at 13-17. In July 2015, the Army rejected this submittal. In its rejection, the Army explained to GSC that the lockers used in the 2944-2945 project “[m]ust replicate existing 3/75 Quad COF TA50 lockers exactly . . . .” Def. Allied's Resp. Ex. F, Gov't Review Remarks (July 30, 2015), ECF No. 24-6 at 1. GSC submitted another Lyon product in August 2015, which was also rejected by the Army because it “[did] not meet the owner requirements.”[1]Def. Allied's Resp. Ex. F, Gov't Review Remarks (Sept. 2, 2015), ECF No. 24-6 at 2.

         In September 2015, after the Army rejected the Lyon lockers, GSC submitted the Debourgh woven wire mesh lockers to the Army for approval. The Army accepted this proposal on September 30, 2015, giving GSC the go ahead to order the lockers. Berg Supplemental Decl. Ex. B, Army Approval for Woven Wire Mesh Lockers, ECF No. 27-1 at 23-26. On November 6, 2015, GSC emailed Berg and placed an order for the expanded metal mesh lockers, not the woven wire mesh lockers that had been submitted to and approved by the Army. Berg Decl. Ex. E, Email from GSC to Berg (Nov. 6, 2015), ECF No. 17-2 at 29-31. To meet the deadline for the project, Debourgh began processing the order immediately. Berg Supplemental Decl. Ex. A, Email from Berg to GSC (Nov. 9, 2015), ECF No. 27-1 at 16-17.

         III. Replacement Locker for the 2013 Project

         Around the same time, Berg and Lieutenant Boyer began discussing a replacement locker for the 2013 project. Sometime before August 2015, someone vandalized a locker from the 2013 project. Salo Dep. 40:10-21. On August 24, 2015, Lieutenant Boyer sent an email to Debourgh about repairing or replacing the vandalized locker. In his email, Lieutenant Boyer asked Debourgh whether it had “been able to identify a model number or a price of the wall lockers in the photos [Boyer] sent last week?” Def. Allied's Resp. Ex. B, Email from Boyer to Debourgh (Aug. 24, 2015), ECF No. 24-2 at 19. Berg replied to Boyer and said he was “working out how to get you a replacement locker . . . .” Id., Email from Berg to Boyer (Aug. 24, 2015), ECF No. 24-2 at 18. Berg told Boyer that he was working with GSC on the 2944-2945 project. Berg explained that he had not yet received the purchase order for the 2944-2945 project, but that if the lockers for the purchase order matched the locker that Boyer sought to replace, Berg “would be willing to just add on an additional locker” to the 2944-2945 project run to keep the cost down ...


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