KANE BUILDERS S&D, INC.
MARYLAND CVS PHARMACY, LLC
DEBORAH K. CHASANOW, District Judge.
Presently pending and ready for review in this mechanic's lien case is the motion to dismiss the amended complaint, or in the alternative, to stay and compel mediation, filed by Defendant Maryland CVS Pharmacy, LLC ("CVS"). (ECF No. 19). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendant's motion to dismiss, or in the alternative, to stay and compel mediation will be granted in part and denied in part.
On September 23, 2010, CVS signed a 25-year lease on property in Charles County, Maryland, on which it intended to build a retail pharmacy. CVS contracted with TVC Construction Services, LLC ("TVC") to develop and manage the construction project. Plaintiff Kane Builders S&D, Inc. ("Kane Builders") is a Pennsylvania construction company that contracted with TVC to provide work and materials for the project. (ECF No. 17, at 2). The contract between Kane Builders and TVC included documents that were based on standard form construction contract documents drafted by the American Institute of Architects ("AIA"). The final contract between the parties attached AIA Document A201 - 2007, "General Conditions of the Contract for Construction, " and other documents related to Plaintiff's bid for the contract. (ECF No. 17-2). The parties amended this document by striking through a number of its provisions. The "General Conditions" portion of the contract includes § 15.2.8, which states that "[i]f a Claim relates to or is the subject of a mechanic's lien, the party asserting such Claim may proceed in accordance with applicable law to comply with the lien notice or filing deadlines." ( Id. at 52). Section 15.3.1 also provides that "[c]laims, disputes, or other matters in controversy arising out of or related to the Contract... shall be subject to mediation as a condition precedent to binding dispute resolution." ( Id. ). Section 15.3.2 provides that a request for mediation "may be made concurrently with the filing of binding dispute resolution proceedings but, in such event, mediation shall proceed in advance of binding dispute resolution proceedings, which shall be stayed pending mediation for a period of 60 days from the date of filing." ( Id. ). Although the standard form "General Conditions" also includes a § 15.4 that outlines arbitration proceedings as the next step in the dispute resolution process, here the parties crossed out this section. ( Id. ). The contract provides that Maryland law governs. ( Id. at 47).
Plaintiff worked for TVC at the Charles County property to construct a retail pharmacy building between August 2011 and September 2012. It argues that it earned a total of $3, 791, 644.13, of which $1, 280, 315.90 remains unpaid. (ECF No. 17-1, at 1).
A. Procedural Background
On October 24, 2012, Plaintiff sent Defendant a letter titled "Notice to Owner or Owner's Agent of Intention to Claim a Lien, " in which it described the work done and amount owed. (ECF No. 17-1). On November 2, 2012, Plaintiff filed a petition to establish and enforce a mechanic's lien in the Circuit Court for Charles County, Maryland. (ECF No. 2). On December 26, 2012, CVS removed the case to this court pursuant to 28 U.S.C. § 1332. (ECF No. 1). The same day, Defendant filed a motion to dismiss, or, in the alternative, to stay and compel mediation. (ECF No. 9). On January 16, 2013, Plaintiff filed an amended petition to establish and enforce a mechanic's lien (ECF No. 17), and on January 18, CVS renewed its motion to dismiss or to stay and compel arbitration (ECF No. 19). Plaintiff opposed this motion (ECF No. 20), and Defendant replied (ECF No. 22).
A. Motion to Dismiss Pursuant to Rule 12(b)(1)
Defendant contends that Plaintiff has failed to comply with a condition precedent to litigation in its construction contract with TVC that required them to submit all disputes to nonbinding mediation. Therefore, Defendant asserts that the case is subject to dismissal for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1).
Defendant has conflated the concepts of subject matter jurisdiction and "condition precedent" to litigation. See Harris v. Amoco Production Co., 768 F.2d 669, 680 (5th Cir. 1985) (concluding that "while the failure to comply with a condition precedent usually means that a plaintiff cannot bring suit..., it does not mean that the district court lacks subject matter jurisdiction"); N-Tron Corp. v. Rockwell Automation, Inc., No. 09-0733-WS-C, 2010 WL 653760, at *4 (S.D.Ala. Feb. 18, 2010) (noting that "the question of subject matter jurisdiction is analytically distinct from that of failure to satisfy conditions precedent to suit"); but see Tattoo Art, Inc. v. TAT Int'l, LLC, 711 F.Supp.2d 645, 651 (E.D.Va. 2010) (finding that failure to engage in alternative dispute resolution as condition precedent to litigation constitutes a jurisdictional defect). Failure to satisfy a contractual condition precedent to litigation cannot divest the court of subject matter jurisdiction. Subject matter jurisdiction "refers to a tribunal's power to hear a case, ' a matter that can never be forfeited or waived." Union P. R.R. Co. v. Bhd. of Locomotive Eng'rs and Trainmen Gen. Comm. Of Adjustment, Cent. Region, 558 U.S. 67, 81 (2009) (citations omitted).
The parties do not dispute that either the diversity of citizenship or the amount in controversy requirements of 28 U.S.C. § 1332 have been met, and this court has subject matter jurisdiction over this case. See HWC Wire & Cable Co. v. Mirant Mid-Atl., LLC, No. DKC-10-731, 2010 WL 2431018, at *3 (D.Md. June 10, 2010) (exercising jurisdiction over Maryland mechanic's lien claim on the basis of diversity jurisdiction). While Plaintiff's failure to comply with an agreed upon condition precedent may prove fatal to its claims on the merits, it has no bearing on the court's power to hear the case. Therefore, Defendant's motion to dismiss must be denied to the extent that it relies on Rule 12(b)(1).
B. Failure to Mediate
Defendant's motion to dismiss the amended petition is instead properly considered under Rule 12(b)(6). Defendant argues that Kane Builders' failure to comply with the contractual mediation requirements precludes it from seeking relief here and requires that its claims be dismissed. Plaintiff responds that the contract expressly recognizes the right for a party to file a petition for a mechanic's lien, and that an action for a mechanic's lien is outside the scope of the mediation clause. Finally, Plaintiff argues that, if the mediation ...