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J.H. Landworks, LLC v. T. Lariviere Equipment & Excavation

October 5, 2012

J.H. LANDWORKS, LLC,
PLAINTIFFS
v.
T. LARIVIERE EQUIPMENT & EXCAVATION, INC., AND CINCINNATI INSURANCE COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Honorable Mikel H. Williams United States Magistrate Judge

MEMORANDUM DECISION ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

Pending before the Court is a Motion for Partial Summary Judgment (Dkt. 27), filed by Defendant T. LaRiviere Equipment & Excavation, Inc. ("TLE"). The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). Having reviewed the parties' respective affidavits and briefing related to this motion (Dkts. 27-29, 31-35, & 37), and having entertained oral argument on September 21, 2012, the Court hereby enters the following Order.

BACKGROUND

This case involves a claim for a violation of the Miller Act, 40 U.S.C. § 3131(b), and related state law claims for breach of contract, unjust enrichment, and fraud. It arises from a construction project, commonly known as the Priest Lakes Bridges Project ("the Project"), funded under the American Recovery and Reinvestment Act. The Project involved the replacement or construction of several bridges over creeks located in Bonner County, Idaho, within the boundary of the Idaho Panhandle National Forest. (First Amended Complaint, ¶ 7, Dkt. 22). TLE served as the general contractor on the Project, and in March of 2010, it entered into an agreement with the United States Forest Service regarding the scope of the work to be undertaken. Id.

Several months later, in June of 2010, TLE contacted the Plaintiff, J. H. Landworks, LLC (hereafter "J.H. Landworks"), to complete certain excavation work that needed to be done under the Prime Contract. (Id., ¶ 10). According to the Amended Complaint, TLE gave J.H. Landworks an oral description of the work to be completed and asked JHL if it thought it could complete the work for a fixed price of $190,000.00. J.H. Landworks asserts that TLE specifically represented that it had allocated sufficient monies under its Prime Contract with the Forest Service so that it could pay J.H. Landworks this amount. (Id., ¶¶ 11-12.) J.H. Landworks further asserts that under the terms of the initial oral agreement it agreed to provide the requested labor and materials for the total price of $190,000 suggested by TLE. (Id., ¶ 12). Of this total price, the parties estimated that approximately $30,000 would be material costs that TLE would pay directly upon the submission of invoices from JHL. (Id., ¶ 12). According to the Amended Complaint, JHL thus considered the base price of the contract to be $160,000, with the understanding that material costs would be paid directly by TLE. Id. J.H. Landworks further asserts that although it undertook work on the project beginning on July 27, 2010, TLE had not paid any of its material costs by September of 2010, including certain amounts owed to subcontractors or suppliers. (Id., at ¶¶ 13-14). J.H. Landworks asserts that TLE then requested that it pay those material costs directly, so as not to delay the completion of the Project. Id. J.H. Landworks agreed to do so, and incurred some $32,845.75 in expenses in connection with the purchase of materials. (Id. at ¶ 15-16). Thereafter, J.H. Landworks alleges that there were oral modifications to the contract that increased the scope of work and therefore, the total price. (Id., at ¶¶ 15-16).*fn1

The excavation project proceeded forward and by October 18, 2010, J.H. Landworks had substantially completed the bulk of the work, though some additional work did remain. (Plaintiff's Statement of Undisputed Material Facts, ¶ 2, Dkt. 31; Affidavit of Jay Huff at ¶¶ 2-3). The dispute at issue in the present motion arises from certain events that occurred on October 18, 2010 or in the days immediately following. According Jay Huff, the owner of J.H. Landworks, as of October 18, 2010, TLE had not paid J.H. Landworks for the any of the work it had undertaken from July 27, 2010 up through October 18, 2010. (Huff Aff. ¶4). Accordingly, on that day, Jay Huff telephoned Thomas LaRiviere (the owner of TLE) to request that payment be made. According to Mr. Huff, he told Mr. LaRiviere that he wanted TLE to make an initial payment of $200,000, though he expected his final billing to come in above that amount. (Id., ¶ 5). According to Mr. Huff, Mr. LaRiviere told him that TLE had not yet been paid by the Forest Service, but that he could make an initial payment of $100,000. Id. Mr. Huff also asserts that Mr. LaRiviere told him he would pay the balance owed to J.H. Landworks upon final payment from the Forest Service. Id. Mr. Huff asserts that he agreed to accept the $100,000 in reliance on Mr. LaRiviere's representation about the status of the payment from the Forest Service and upon Mr. LaRiviere's promise to pay the remaining balance at a later date. Id., ¶¶ 5-6.

Thereafter, Mr. Huff asked his wife, Crystal Huff, to go to TLE's offices to pick up the $100,000 check so that they could deposit it and begin paying subcontractors and material suppliers. (Id., ¶ 7). When Ms. Huff arrived at TLE's offices, she was given the check and a form entitled: "Interim Lien/Claim Waiver," and told to have Jay Huff sign the waiver form and return it to the TLE offices. (Id., ¶ 8; Crystal Huff Aff. ¶ 3).

The waiver form given to Ms. Huff read as follows:

INTERIM CLAIM/LIEN WAIVER

In consideration of the payment of $_____________ by T. LARIVIERE EQUIPMENT & EXCAVATION, INC., (the "Payor") to the undersigned, the undersigned hereby waives, releases, and relinquishes any and all claims or rights of lien or bond claim which the undersigned may now have by reason of any labor, materials, supplies, equipment, or work furnished to the construction project commonly known as PRIEST LAKE BRIDGESAG-82131-C-100115 (the "Project") and located at PRIEST LAKE, IDAHO.

It is expressly understood that this waiver had been given prior to receipt of payment at the request of an for the convenience of the Payor and is, therefore, contingent upon receipt in due course of payment in full of the amount set forth above. This waiver applies to all labor, materials, supplies, equipment and work furnished to date. Further, the undersigned, in consideration of the payment of said sum, does hereby release and forever discharge USDA FOREST SERVICE (the "Owner"), the Payor, Payor's surety, and their respective successors, affiliates, agents and assigns, and all of their respective subsidiaries, general partners, lenders, and employees from any and all claims, demands, suits, causes of action of whatever kind or nature, whether based on contract, tort or otherwise, which now exist or which may arise out of, or which are in any way connected to the construction of the Project, except for those claims arising out of any labor, material, supplies or equipment furnished after the date of this waiver, and/or those claims which are specifically reserved below. (FAC, Exh. B, Dkt. 22-3). The parties agree that the amount of payment was left blank when the form was given to Crystal Huff. (Defendant's Reply Brief, pp. 3-5, Dkt. 37).

The parties appear to agree that the effect of the waiver would be to discharge all claims to money owed for work completed as of October 18, 2010. However, they disagree heatedly as to the amount that was intended to be released. As indicated, Mr. Huff's recollection of his discussions with Mr. LaRiviere was that the $100,000 check was intended to be a partial payment only. Crystal Huff also testified that she did not recollect any discussion about the check being a final payment when she went to TLE's offices to pick it up. (Crystal Huff Affidavit at ¶ 3). Ms. Huff further testified that immediately after picking up the check, she went to the bank and deposited it, and only thereafter returned home and gave the waiver form to Jay Huff. (Id., ¶ 4).

According to Mr. Huff, when he initially looked at the waiver form, he believed it was intended only to release any claim he might have had to the $100,000 that was being paid that day, not to additional amounts owed. (Jay HuffAffidavit ¶ 8-9). He therefore took the form to the bank to have it notarized, but when he did so, he read it more carefully and realized that the language in the waiver did not comport with his initial reading of it, or with his understanding of the agreement he had with Mr. LaRiviere. (Id., ¶ 9). Accordingly, he signed and notarized the form and returned it to TLE, but intentionally left the payment line blank. (Id., ¶ 9-10). Some time later, an employee of TLE filled in the blank payment line to reflect the $100,000 that TLE had remitted to J.H. Landworks on October 18, 2010. (LaRiviere depo., pp. 98-99, Exh. 1, to Ealy Affidavit, Dkt. 35).

Mr. LaRiviere testified as to a very different understanding of how events transpired. Specifically, he testified that he recalled telling his wife (who was the one who apparently accepted the signed waiver form from Mr. Huff) that the $100,000 check was intended to be a final, not a partial, payment. He also testified that his wife subsequently informed him that she had explained this to Mr. Huff. (La Riviere depo., p. 97-100). Mr. LaRiviere also testified that it was his understanding that Mr. Huff had the waiver form signed and notarized before receiving the check, ...


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