Metromont Corp. v. Allan Myers, L.P.

          MEMORANDUM OPINION

          DEBORAH K. CHASANOW UNITED STATES DISTRICT JUDGE

         Defendant/Counter-Plaintiff Allan Myers, L.P. (“Myers”) filed a motion to stay, or in the alternative, motion to dismiss in this breach of contract case on February 15, 2019. (ECF No. 13). Myers filed a motion for more definite statement of the first affirmative defense in Plaintiff/Counter-Defendant Metromont Corporation's (“Metromont”) answer on March 21, 2019. (ECF No. 22). The issues are briefed and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Myers' motions will be denied.

         I. Background

         Metromont's claim stems from a contract (“prime contract”) the City of Baltimore's Department of Public Works (“the City”) awarded to Myers in 2009.^[1] (ECF No. 1 ¶¶ 2, 10). According to the contract, Myers agreed to “build an enclosed concrete reservoir for Montebello Plant 2, a water filtration plant” (“the project”). (Id.). Myers formed a subcontract with Metromont on July 28, 2010 wherein Metromont agreed to supply “precast concrete double tee beams, inverted girders, and connections[, ]” to construct the reservoir roof. (ECF Nos. 1 ¶ 11 & 1-1, at 2). The standard purchase order for the materials indicated that they were to “strictly comply with the requirements of the [prime] [c]ontract['s] . . . plans and specifications[][, ]” (ECF No. 1-1, at 2), as put forward by the Project's “registered design professional” (ECF No. 1 ¶ 15). Metromont supplied the requested materials and Myers used the materials to construct the reservoir roof.^[2] (See ECF No. 1 ¶¶ 13, 17-18).

         The parties agree that “[t]he reservoir's large roof system experienced problems with cracking concrete at various connection points in July 2011[.]”^[3] (ECF Nos. 1 ¶ 17 & 9 ¶ 14). To resolve the issue, Myers and the City agreed to replace the “rigid welded connections” with “slip-joints[.]”^[4] (ECF Nos. 1 ¶ 18 & 9 ¶ 17). “On or about August 20, 2012, Myers submitted a change order request to the city, seeking an equitable adjustment of $1, 993, 382.56 for the additional work involved in implementing the slip joint connection fix, which Myers later revised on or about March 13, 2015 to a total sum of $4, 699, 735.91.” (ECF No. 9 ¶ 19). The City questioned Myers's change order request, “triggering the dispute resolution terms of the [p]rime [c]ontract.” (ECF No. 9 ¶ 20). From September 10, 2012 through November 19, 2018, Myers was involved in six years of administrative proceedings regarding its claim for a contractual equitable adjustment. (ECF No. 9 ¶¶ 20-23, 25-27). The City's Deputy Director of Public Works issued a final administrative decision denying Myers's change order on November 19, 2018, concluding that Myers failed to meet its burden for adequately calculating the thermal loads in its design of the roof structure members.^[5] (ECF No. 9-5, at 13-17). Myers filed a still-pending appeal of the administrative decision in the Circuit Court for Baltimore City (“State Claim”) on November 27, 2018.^[6](ECF No. 9 ¶ 28). Metromont did not join the appeal either voluntarily (ECF No. 9 ¶ 29) or via compulsory joinder (ECF No. 26-1, at 2).

         Metromont commenced this action on December 19, 2018, alleging one count of breach of contract based on Myers's refusal to pay Metromont. (ECF No. 1). Metromont seeks damages in the amount of $1, 015, 000.00 plus pre- and post-judgment interest. (Id.). Myers filed an answer and counterclaim against Metromont on February 1, 2019, alleging four counts: (1) breach of contract; (2) breach of warranty; (3) negligent design; and (4) indemnification. (ECF No. 9). Myers's counterclaim seeks damages in the amount of $4, 699, 735.91, attorneys' fees, pre- and post-judgment interest, and “such additional direct, indirect, consequential, general and special damages as may be proven at trial[.]” (Id., at 23). Myers also filed a motion to stay, or in the alternative, motion to dismiss on February 15, 2019. (ECF No. 13). Metromont filed a response in opposition to Myers's motion to stay (ECF No. 17) and an answer to Myers's counterclaim on March I, 2019 (ECF No. 16). Myers filed a motion for a more definite statement on March 21, 2019 (ECF No. 22) and Metromont opposed the motion on April 4, 2019 (ECF No. 25).

         II. Motion to Stay or Dismiss

         A. Colorado River

         Myers argues that this action should be stayed or dismissed pursuant to the doctrine established by the Supreme Court of the United States in Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), because “a determination as to liability in the [pending state court] [a]ppeal will prove dispositive of Metromont's claims in this case.”^[7] (ECF No. 13, at 2).

         In response, Metromont argues that the Colorado River abstention doctrine is not applicable here and abstention is not appropriate because “[f]ederal courts with jurisdiction over a case can abstain from hearing it in deference to state-court proceedings only in truly ‘extraordinary circumstances'-not as a matter of convenience or efficiency.” (ECF No. 17, at 2).

         Generally, “our dual system of federal and state governments allows parallel actions to proceed to judgment until one becomes preclusive of the other.” Chase Brexton Health Servs., Inc. v. Maryland, 411 F.3d 457, 462 (4^th Cir. 2005). Thus, the mere fact that an action is pending in a state court “is no bar to proceedings concerning the same matter in the [f]ederal court having jurisdiction.” McLaughlin v. United Va. Bank, 955 F.2d 930, 934 (4^th Cir. 1992) (internal quotation marks omitted). Indeed, “federal courts are bound by a ‘virtually unflagging obligation . . . to exercise the jurisdiction given them.'” Chase Brexton, 411 F.3d at 462 (quoting McClellan v. Carland, 217 U.S. 268, 282 (1910)). It is well established, however, that “federal courts may decline to exercise their jurisdiction, in otherwise ‘exceptional circumstances,' where denying a federal forum would clearly serve an important countervailing interest[.]” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996) (quoting Colorado River, 424 U.S. at 813) (internal quotation marks omitted). The “exceptional circumstances” in which abstention is appropriate “inevitably relate to a policy of avoiding unnecessary constitutional decisions of accommodating federal-state relations.” Chase Brexton, 411 F.3d at 462. “Abstention from the exercise of federal jurisdiction is the exception, not the rule.” Colorado River, 424 U.S. at 813.

         The “threshold question in deciding whether Colorado River abstention is appropriate is whether there are parallel federal and state suits.” Chase Brexton, 411 F.3d at 463. If the suits are parallel, the court must balance a number of factors in considering whether “exceptional circumstances” are presented, thereby warranting its abstention. See Gannett Co. v. Clark Constr. Group, Inc., 286 F.3d 737, 741 (4^th Cir. 2002).

         “Simultaneous federal and state suits are deemed parallel if ‘substantially the same parties litigate substantially the same issues.'” Extra Storage Space, 527 F.Supp.2d 462, 466 (D.Md. 2007) (quoting New Beckley Mining Corp. v. Int'l Union, United Mine Workers of Am., 946 F.2d 1072, 1073 (4^th Cir. 1991)). The similarity of the suits is generally assessed in terms of the identity of the parties, the legal issues, and the remedies sought in the respective cases. See Great Am. Ins. Co. v. Gross, 468 F.3d 199, 207-08 (4^th Cir. 2006). “Although the parties in the concurrent suits need not be identical, the [United States Court of Appeals for the] Fourth Circuit has strictly construed the requirement that the parties be substantially the same.” Extra Storage Space, 527 F.Supp.2d at 466.

         The parties in the two suits are not substantially the same. The state administrative action “involves a contractual dispute between [] Myers [] . . . and the Baltimore City Department of Public Works[.]” (ECF No. 17-1, at 4). Although Metromont received a copy of the administrative decision, it is not listed as a party to the administrative proceedings and, accordingly, would not be a party in Myers's administrative appeal. (Id., at 22). Because Metromont is not a party to the pending state court litigation, the parties are not “substantially the same” and staying this litigation “would deprive [Plaintiff] of the opportunity to litigate its claims.” Great Am. Ins., 468 F.3d at 208; see also Chase Brexton, 411 F.3d at 464 (“[F]ive of the federal ...