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United States v. Grimberg/Amatea JV

United States District Court, D. Maryland

December 19, 2017




         Use Plaintiff Manganaro Midatlantic, LLC (“MMA”) brings this lawsuit against defendants Grimberg/Amatea JV (“GAJV”), John C. Grimberg Company, Inc. (“Grimberg”), and Amatea, LLC (“Amatea”) seeking damages for breach of contract. Now pending is MMA's motion for partial summary judgment. (ECF No. 25). MMA seeks summary judgment in the amount of $216, 506.38, leaving $1, 249.00 in dispute to be litigated at trial. The parties have fully briefed the motion, and no oral argument is necessary. See Local R. 105.6. For the reasons set forth below, Plaintiff's motion for partial summary judgment is denied.


         This dispute concerns allegedly unpaid sums arising under a construction subcontract. (ECF No. 1 & 1). On or about September 4, 2012, defendant GAJV entered into a prime contract (“Prime Contract”) with the Department of Army, Corps of Engineers (“Corps”) for the construction of an addition and renovation to the Defense Information School at Fort Meade, Maryland (“Project”). (ECF No. 1 & 1, 10). GAJV is an unincorporated joint venture comprised of two construction companies, defendants Grimberg and Amatea. (ECF No. 1 & 10). On January 31, 2013, GAJV entered into a drywall, masonry, and acoustical subcontract (“Subcontract”) with MMA. (ECF No. 25-3, p. 2). The Subcontract defined MMA's scope of work:

Furnish and install drywall systems, acoustical ceiling systems, acoustical wall treatment, plaster systems, spray foam insulation, building insulation, and air vapor barrier trades complete per plans, specifications, and addenda.

(ECF No. 25-3, p. 2).

         The original Subcontract sum, subject to adjustments by Change Order or other Subcontract provisions, was $2, 350, 000. (ECF No. 25-3, p. 2). MMA invoiced GAJV a total of $2, 780, 153 for its work on the Project. (ECF No. 25-23, p. 2). GAJV has paid MMA $2, 562, 397.62 to date, leaving an allegedly outstanding balance of $217, 755.38. (ECF No. 25-6, p. 7). GAJV contends that MMA is owed no further monies. More specifically, GAJV argues that (1) MMA is not entitled to payment on three Change Orders totaling $184, 131 and (2) GAJV is entitled to set-off for seven backcharges that it assessed against MMA, totaling $86, 165.03. (ECF No. 26, p. 4). The propriety of three Change Orders and six backcharges are centrally featured in this motion.

         I. Change Orders

         On August 4, 2014, the Corps issued a stop work order on the Project, which put a temporary end to MMA's work. (ECF No. 25-10, p. 8). The stop work order remained in effect until March 6, 2015, and caused MMA to incur additional costs to perform its scope of work. (ECF Nos. 26-15, p. 10, 25-10, p. 3). Accordingly, MMA submitted three Change Order requests for (1) sheathing and inefficiencies, (2) scheduling impacts, and (3) material escalation, adding $184, 131 to the contract price. (ECF No. 25-9, p. 3; ECF No. 25-10, p. 3; ECF No. 25- 11, p. 3). MMA attributed the Change Order requests to “cost impacts due to schedule changes including schedule changes attributed to stop work order.” (ECF No. 25-10, p. 3).

         In accordance with the Prime Contract, GAJV submitted a proposal to the Corps for the increased costs resulting from the stop work order, including MMA's Change Order requests. (ECF No. 26-15, p. 2-6). The Corps in response advised GAJV that it “[was] unable to process this request with the information as provided.” (ECF No. 26-16, p. 2). The Corps instructed further as to additional information needed to justify MMA's Change Order requests. (ECF No. 26-16, p. 2-3). MMA, according to GAJV, failed to provide the Corps with this required additional information and failed to comply with the dispute process under the Subcontract. (ECF No. 26-6, p. 45). MMA does not dispute these contentions but rather contests the legal applicability of the pertinent contractual provisions.

         GAJV also issued adjustments to MMA's account in accordance with the following Change Order requests: (1) GAJV Add/Deduct Number 12 in the amount of $21, 419 for Sheathing and Inefficiencies, (2) GAJV Add/Deduct Number 13 in the amount of $75, 940 for Scheduling Impacts, and (3) GAJV Add/Deduct Number 14 in the amount of $86, 772 for Material Escalation. (ECF No. 25-9, p. 2; ECF No. 25-10, p. 2; ECF No. 25-11, p. 2) (Collectively the “Change Orders”). GAJV required MMA to bill for each change and subjected each Change Order to the same terms and conditions stated in the original Subcontract. Id.

         MMA signed, returned, and invoiced for the Change Orders. Id. GAJV claims that MMA's invoices did not comply with the Subcontract because the Change Orders had not been first approved by the Corps prior to invoicing. (ECF No. 26, p. 19; ECF No. 25-3, p. 2; ECF No. 26-16, p. 2). MMA contends that GAJV has already paid MMA $184, 131 for the Change Orders and is instead withholding base contract money from MMA. (ECF No. 25-1, p. 7). GAJV disputes that such payment is for the Change Orders, and claims that MMA is not due any outstanding payments. (ECF No. 26-6, p. 14, 18, 20).

         MMA relies on GAJV's Committed Cost Status Report (“Report”) to support its claim that GAJV has paid MMA for the Change Orders. (ECF No. 25-14, p. 2). Relevant to this dispute are the columns on the report titled “Total Invoiced, ” “Amount, ” “Amount Paid, ” and “AP Balance.” (ECF No. 25-14, p. 2). For the Sheathing and Inefficiencies Change Order, Job Proposal Number 71-831-147, the Report lists the “Total Invoiced” and “Amount” as $21, 419.00. Id. The “Amount Paid” is 21, 419.00 and the “AP Balance” is zero. Id. For the Change Order for Scheduling Impacts, Job Proposal Number 71-831-152, the Report lists the “Total Invoiced” and the “Amount” as 75, 940.00. Id. The “Amount Paid” is 75, 940.00 and the “AP Balance” is zero. For the Change Order for Material Escalation, the Report lists the “Total Invoiced” as 86, 772.00 and the “Amount” as 34, 708.80. Id. The “Amount Paid” is 34, 708.80 and the “AP Balance” is zero. Id. According to MMA, the Report's listing of the balance for each Change Order as zero shows GAJV has paid for the Change Orders. (ECF No. 25-1, p. 18).

         Handwritten notes on the Report from Kimberly Graham indicate that the Corps neither paid for nor approved the Orders, and thus signify that GAJV never intended to pay any Change Order amounts that were marked “0%.” (ECF No. 26-3, pp. 3, 7). By contrast, “100%” in the same handwriting appears on other job proposals on the Report, indicating that the Corps approved the proposal and it was paid in full. (ECF No. (ECF No. 25-14) 26-3, p. 6). Graham further attested that the line items in the “Amount Paid” column do not in fact reflect amounts paid because her unfamiliarity with the cost reporting system led to inaccurate entries. Id. at 3.

         II. Backcharges

         In October 2016 and January 2017, GAJV served MMA with seven backcharges, six of which are relevant to MMA's current motion. (ECF No. 25-1, p. 7). Three of the backcharges, totaling $38, 035.74, concern exterior plywood sheathing. (ECF No. 25-15, p. 2, 6, 14). The fourth backcharge, amounting to $17, 595, is for sealing fire walls. (ECF No. 25-19, p. 2). Fifth is a backcharge for labor assistance, totaling $11, 231. (ECF No. 25-21, p. 2). The final backcharge, amounting to $18, 054, is for sprinkler adjustments. (ECF No. 25-22, p. 2). MMA contends the backcharges are without merit and should not reduce outstanding amounts owed under the Subcontract. (ECF No. 25-1, p. 7).

         A. Plywood Sheathing

         With regard to the plywood wall sheathing backcharges, MMA's scope of work under the Subcontract includes furnishing and installing drywall systems. (ECF No. 25-3, p. 2). GAJV claims that plywood sheathing is part of furnishing and installing drywall systems, pointing to contract drawings to support this claim. (ECF No. 26-6, p. 22, 27). MMA, however, insists plywood sheathing was not included in the scope of the Subcontract, making this backcharge invalid. (ECF No. 25-1, p. 23).

         B. Sealing Fire Walls

         According to GAJV, MMA failed to install wall assemblies that complied with applicable fire-rating standards. (ECF No. 26-6, p. 32). In backcharging MMA for this work, GAJV provided MMA photographs of wall assemblies that failed to meet fire-rating standards. (ECF No. 26-6, p. 33-35; ECF No. 26-8, p. 2-3). Although GAJV contends that this work fell within MMA's scope of work as part of the installation of wall systems (ECF No. 26-6, p. 32; ECF No. 25-3, p. 2), MMA characterizes this same work as for firestopping, which was specifically excluded from MMA's scope of work in the Subcontract. (ECF No. 25-3, p. 2; ECF No. 25-1, p. 25). GAJV argues that this backcharge is invalid as outside the scope of MMA's work. (ECF No. 25-1, p. 26).

         C. ...

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