Cliffwood Electrical Contractor, Inc. v. Century General Construction & Contracting, LLC (In Re Cliffwood Electrical Contractor, Inc.)
Bankr. E.D. Pa.7/31/2009
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Opinion STEPHEN RASLAVICH, Chief Judge. Introduction Before the Court is the motion (âMotionâ) of defendants, Century General Construction and Contracting, LLC (âCen *150 turyâ) and Lamâs Realty Corp. (âLamâs Realtyâ), for summary judgment against plaintiff, Cliffwood Electrical Contractor, Inc. (âDebtorâ). Debtor originally filed this action in state court seeking to recover on a mechanicsâ lien which it filed against Century and Lamâs Realty (collectively referred to as âDefendantsâ). However, Defendants removed the action to this bankruptcy court and filed an answer containing two counterclaims to the Debt- orâs complaint. Defendants move for summary judgment on: (1) Debtorâs claims; and (2) their counterclaims. Upon consideration, Defendantsâ Motion shall be granted on Debtorâs claims but denied as to Defendantsâ counterclaims. Background Lamâs Realty is the owner/franchisee of a ten story hotel located at 1201 Race Street in Philadelphia (the âHotelâ). Motion, Exhibit A ¶ 4. Century is the owner of a construction project (âProjectâ) for the Hotel. Id. ¶ 3. On or about September 19, 2007, Century and Debtor entered into a written agreement (the âAgreementâ) for Debtor to complete all remaining electrical work for the Project for the sum of $240,000. Motion, Exhibit A ¶¶ 5-7 & Exhibit C; Plaintiffâs Memorandum of Law in Objection to Defendantsâ Motion for Summary Judgment (âDebtorâs Opposing Briefâ), Exhibit A ¶ 3. According to the Agreement, Debtor was required to complete âall remaining work for the entire building consisting of the basement, 1st floor, mezzanine, floors 3, 4, 5, 6, 7, 8, 9 and 10, the mechanical room on the roof of the building and all exterior electrical work.â Motion, Exhibit C at Article 111(2). Article XIV of the Agreement acknowledges that Debtor âis a union contractor.â Motion, Exhibit C at Article XIV(6). Around the time that Century entered into the Agreement with the Debtor, Defendants learned that the Debtor either had or was having problems paying its union wages and benefits due to the International Brotherhood of Electrical Workersâ Local 98 (âIBEW Local 98â) and to the International Brotherhood of Electrical Workers â -Local 351. Motion, Exhibit A ¶ 9. Consequently, Century and the Debtor executed an addendum to the Agreement (âAddendum to Agreementâ), dated October 1, 2007, which provided, in pertinent part: 1. Health and Welfare. [Debtor] and [Century] agree that Century shall issue joint checks for I.B.E.W. 98 LABOR for the Project payable to the International Brotherhood of Electrical Workers Local 98 and [Debtor]. The I.B.E.W. Local 98 shall invoice [Century] and [Debtor] monthly with all payments due and payable to I.B.E.W. Local 98 in accordance with the agreed upon terms of the specific order. The joint check is to be delivered to the International Brotherhood of Electrical Workers Local 98 located at 1701 Spring Garden Street, Philadelphia, Pennsylvania. Motion, Exhibit B (Addendum to Agreement) ¶ 1 to Exhibit S (Defendantsâ Amended Answer). Debtor subsequently commenced work on the Project and the progress payments due under the terms of the Agreement were paid to Debtor. Motion, Exhibit A ¶ 13. On October 24, 2007, the parties executed a change order (Change Order # 1) for $25,000 for the Project. Id. ¶ H & Exhibit D. Century tendered $25,000 to Debtor for Change Order # 1. Motion, Exhibit Ay 15 & Exhibit E. On December 10, 2007, the parties executed a second change order (âChange Order #2â) for $54,0000 whereby Debtor agreed to take over the installation of fire alarms on for Tech. Security Services. *151 Motion, Exhibit A % 16 & Exhibit F. Century paid Debtor $30,000 of the $54,000 owed to it on Change Order # 2. Motion, Exhibit 17 & Exhibit G. By the end of 2007, Century had paid Debtor $219,000 towards the $240,000 owed under the Agreement and $55,0000 of the $75,000 owed under Change Orders # 1 and # 2. Motion, Exhibit A ¶ 18. From January 7, 2007 through January 27, 2008, Century paid Debtor an additional $18,000 pursuant to the Agreement, leaving a balance remaining on the Agreement of only $3,000, and paid $38,413.96 in Debt- orâs union worker and health benefits. Motion, Exhibit A ¶ 19. On January 29, 2008, the parties executed an agreement which they labeled âAddendum to Contract.â Motion, Exhibit A ¶20 & Exhibit J. In the Addendum to Contract, the parties agreed to the following: 1. Century would make âall payments to IBEW for health and welfare for November 2007 and December 2007.â 2. From that point forward, Debtor âshall be responsible for payment of health and welfare to the IBEW[.]â 3. Century owed Debtor a balance of $59,202. 4. The $59,202 was for labor only and did not include equipment. 5. Century would pay Debtor fifty percent (50%) of the $59,202 on January 29, 2008 and the other fifty percent (50%) âat the completion of the electrical work pending approval by the appropriate city officials in Philadelphia.â 6. Completion included the âoriginal scope of work, fire system, low voltage, and change orders.â Motion, Exhibit J (emphasis added). 1 Pursuant to the Addendum to Contract, Century paid fifty percent (50%) of the $59,202 to Debtor so that under the terms thereof, only $29,601.00 was left due and owing for Debtorâs labor. Motion, Exhibit A ¶¶ 21-22, Exhibit J & Exhibit K. In total, Century paid Debtor $321,604 on the Project and paid $38,413.96 in Debtorâs union worker and health benefits. Added together ($321,604 + $38,413.96), these amounts total $360,014.96. Apparently, the Addendum to Contract did not resolve the partiesâ disagreement concerning what the Debtor was owed because, thereafter, the Debtor made repeated demands to Defendants via letters and phone calls for payment for work that it asserted âhad been authorized and completed.â Opposing Brief, Exhibit A ¶ 5. Defendants did not respond to Debtorâs demands. Id. On February 11, 2008, which was thirteen days after the parties had executed the Addendum to Contract, there was a meeting between Debtor and Century. Motion, Exhibit B at ¶ 22. Debtor informed Century that it would terminate the Agreement, as revised, unless Century paid: (i) $12,500 to it in new change orders; (ii) $70,000 to Billows Electrical Supply which was its sub-contractor on the Project; and (iii) additional health and welfare payments to IBEW Local 98. Mo *152 tion, Exhibit A ¶ 2k Debtor made final notice to Defendants for payment on work already completed âwith notice of locking-out and tagging-out all incomplete power sourcesâ which âin the ordinary course of businessâ meant that Debtor intended to cease all work on the Project. Opposing Brief, Exhibit A ¶ 6. The next day, February 12, 2008, Debtor walked off the job site without completing its work on the Project. Motion, Exhibit A ¶ 27 & Exhibit B ¶ 26. 2 By letter, dated February 13, 2008, Century informed Debtor of its intention to terminate the Agreement for cause within seven days as a result of Debtorâs willful breach thereof and abandonment of the Project. Motion, Exhibit A ¶ 28. On or about July 14, 2008, Debtor filed its Mechanicsâ Lien Claim in state court against the Hotel for $114,756.00 for âunion electrical laborâ which Debtor provided for the job. Motion, Exhibit A ¶ 30 3 On January 12, 2009, Debtor filed a Chapter 7 bankruptcy case in the United States Bankruptcy Court for the District of New Jersey. Docket Entity No. 1, Case No. 09-10587. The next day, a Chapter 7 Trustee was appointed in the bankruptcy case. On February 4, 2009, the Trustee filed a Notice of Assets and Request for Notice to Creditors. On January 30, 2009, Century filed a proof of claim in Debtorâs bankruptcy case listing an unsecured claim of $150,000 for breach of contract. Claim Register, Claim 8-1, Case No. 09-10587. Thereafter, on February 9, 2009, Debtor commenced the state court action by filing its Complaint to enforce its Mechanicsâ Lien Claim. Debtorâs state court complaint contains two counts which are plead in the alternative; in both counts, Debtor demands judgment for the amount of its mechanicsâ lien ($114,756.00). In one count, Debtor alleges that it was a contractor on the Project; in the other count, Debtor alleges that it was a subcontractor on the Project. On February 18, 2009, Defendants filed a Notice of Removal in the Bankruptcy *153 Court for the Eastern District of Pennsylvania, thereby removing the state court action to this Court. Docket Entry No. 1, Adv. No. 09-50. Two days later, Defendants filed an answer with counterclaims to the state court complaint. Id., Docket Entry No. 2. Shortly thereafter, Defendants amended their answer. Id., Docket Entry No. 7. Defendants included the same two counterclaims in their answer and amended answer; they are: (1) Count I for âbreach of contractâ; and (2) Count II for âslander of title.â Count II is based on Debtorâs filing the mechanicsâ lien against the Defendants. On April 9, 2009, the Court held a status conference with counsel for the Defendants and the Chapter 7 Trustee. At that conference, the Chapter 7 Trustee advised the Court that he was âappearing pro seâ and not as counsel for the bankruptcy estate. Transcript, dated April 9, 2009, at S. He stated that, as of that date, the bankruptcy estate was unrepresented but that he was attempting to retain counsel, who is licensed to appear in the Commonwealth of Pennsylvania, to represent the estate. Id. at 3-5. He requested time to retain counsel for the litigation; however the Court opined that his efforts to retain counsel had been âunsatisfactory.â Id. at 6-9. Seeking to move the litigation forward, Defendantsâ counsel proposed to the Court that the parties be given 60 days to complete discovery and informed the Court that, during that time, Defendants intended to file a dispositive motion with the Court. Id. at 4. Later in the hearing, Defendantsâ counsel advised the Court that he wasnât sure his clients even needed discovery because the facts were not really in dispute and stated again that his clients were going to proceed by filing a motion for summary judgment. Id. at 11. At the conclusion of the conference, Defendantsâ counsel specifically requested, and was granted, permission to proceed with discovery as necessary. Id. at 11. On May 1, 2009, Defendants filed their Motion. On May 22, 2009, the Chapter 7 Trustee filed a memorandum on Debtorâs behalf in opposition (âOpposing Briefâ) to the Motion and on May 29, 2009, Defendants filed a reply brief (âReply Briefâ). 4 Shortly thereafter, a hearing was held on *154 the Motion. At the conclusion of the hearing (at which the parties presented oral argument on the Motion), the Court took the matter under advisement. Discussion I. Standard of Review Federal Rule of Civil Procedure 56(c) provides that summary judgment should be granted if, drawing all inferences in favor of the nonmoving party, âthe pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.â Fed. R.Civ.P. 56(c). 5 A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 , 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986). A genuine issue exists when the trier of fact âcould return a verdict for the nonmoving party.â Cooley v. Merski, 2009 WL 742692 , at *2 (W.D.Pa. March 20, 2009) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 , 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986)). In deciding a motion for summary judgment, it is not the courtâs role to weigh the disputed evidence and decide which is more probative, or to make credibility determinations. Benchmark Group, Inc. v. Penn Tank Lines, Inc., 612 F.Supp.2d 562, 578 (E.D.Pa. April 8, 2009) (citing Boyle v. County of Allegheny, Pa., 139 F.3d 386, 393 (3d Cir.1998)) (citing Petruzziâs IGA Supermarkets, Inc. v. Darling-Del. Co. Inc., 998 F.2d 1224 , 1230 (3d Cir.1993)). Rather, the court must consider the evidence, and all reasonable inferences which may be drawn from it, in the light most favorable to the non-moving party. Benchmark Group, Inc., 612 F.Supp.2d at 573 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986)) (citing U.S. v. Diebold, Inc., 369 U.S. 654, 655 , 82 S.Ct. 993 , 8 L.Ed.2d 176 (1962)); Tigg Corp. v. Dow Coming Corp., 822 F.2d 358, 361 (3d Cir.1987). If a conflict arises between the evidence presented by both sides, the court must accept as true the allegations of the non-moving party, and âall justifiable inferences are to be drawn in his favor.â Benchmark Group, Inc., 612 F.Supp.2d at 573 (citing Anderson, 477 U.S. at 255 , 106 S.Ct. 2505 ). The moving party bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of âthe pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,â which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corporation v. Catrett, 477 U.S. 317, 323 , 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986). If the moving party meets its burden, then âthe nonmoving party must set forth âspecific facts showing that there is a genuine issue for trialâ or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law.â Zahavi v. The PNC Financial Services Group, Inc. 2009 WL 904699 , at *6 (W.D.Pa., March 31, 2009) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986) (quoting Fed. R.Civ.P. 56(e))). II. Debtorâs Claims Against Defendants The partiesâ arguments Defendants contend that they should be granted summary judgment on Debtorâs *155 claims against them because Debtor walked off of the Project without completing its work. According to Defendants, â[t]he right to a mechanicâs lien is triggered by a subcontractorâs completion of its entire scope of work under a subcontract on a projectâ and that â[wjithout the completion of work, no right to a lien, or enforcement thereof, exists.â Defendantsâ Memorandum of Law in Support of their Motion for Summary Judgment (âDefendantsâ Briefâ) at 12. Defendants cite § 1502(a) of Pennsylvaniaâs Mechanicsâ Lien Law of 1968, 49 P.S. §§ 1101 et seq., as support for their position. This section provides, in pertinent part: (a) Perfection of Lien. To perfect a lien, every claimant must: (1)file a claim with the prothonotary as provided by this act within six (6) months after the completion of his work;.... 49 P.S. § 1502(a)(1) (underlining added). Notably, § 1503, which lists the information that a claimant must be set forth in a mechanicsâ lien claim, also provides support for the proposition that a mechanicsâ lien cannot be filed under Pennsylvania law until a claimantâs work on a project is complete. Section 1503 provides: The claim shall state: (1) the name of the party claimant, and whether he files as contractor or subcontractor; (2) the name and address of the owner or reputed owner; (3) the date of completion of the claimantâs work; (4) if filed by a subcontractor, the name of the person with whom he contracted, and the dates on which preliminary notice, if required, and of formal notice of intention to file a claim was given; (5) if filed by a contractor under a contract or contracts for an agreed sum, an identification of the contract and a general statement of the kind and character of the labor or materials furnished; (6) in all other cases than that set forth in clause (5) of this section, a de- â tailed statement of the kind and character of the labor or materials furnished, or both, and the prices charged for each thereof; (7) the amount or sum claimed to be due; and (8) such description of the improvement and of the property claimed to be subject to the lien as may be reasonably necessary to identify them. 49 P.S. § 1503 (underlining added). In its Opposing Brief, Debtor admits that it walked off of the job before it finished its work but contends that it did so as a âdirect result of Defendants breaching first through continued non-payment for work already completed.â Debt- orâs Opposing Brief at 2. Debtor points out that it stopped work on the job only after: (i) making repeated demands on Defendants, which âwent unheard,â for payment on work that was authorized and completed; and (ii) notifying the Defendants in writing that it intended to begin to lockout and tag-out all incomplete power sources which meant, in the ordinary course of business, that Debtor intended to cease working on the Project. Debtorâs Opposing Brief at 2. Without citing any authority to support its position, 6 Debtor *156 argues that the aforementioned facts raise a dispute over a material fact which is âthe whole crux of this matterâ and, consequently, that Defendantsâ Motion must be denied. Id. Analysis of the law Pennsylvaniaâs Mechanicsâ Lien Law âis a creation in derogation of the common law, and, therefore, any question of interpretation shall be resolved in favor of strict, narrow construction.â Wyatt Inc. v. Citizens Bank, 2009 PA Super 107 , 976 A.2d 557, 564 (2009). In order to effectuate a valid lien claim, a contractor or subcontractor âmust be in strict compliance with the requirements of the Mechanicsâ Lien Law.â Delmont Mechanical Services, Inc. v. Kenver Corporation, 450 Pa.Super. 666, 672 , 677 A.2d 1241, 1244 (1996). âA mechanicsâ lien is an extraordinary remedy, which should only be afforded to [claimants] who judiciously adhere to the requirements of the Mechanicsâ Lien Law, as an aggrieved [claimant] also has an action sounding in breach of contract^]â Philadelphia Construction Services, LLC v. Domb, 903 A.2d 1262, 1267 (2006). A mechanicsâ lien is a statutory proceeding for a claimant to obtain in rem rights â âin the nature of collateral security for payment of the debt due for work done or materials furnishedâ in accordance with a contract, express or implied.â Nowicki Construction Co., Inc. v. Panar Corp. N.V., 342 Pa.Super. 8, 13 , 492 A.2d 36, 39 (1985) (quoting Hoffman Lumber Co. v. Mitchell, 170 Pa.Super. 326, 331 , 85 A.2d 664, 667 (1952)). Importantly, â â[i]t is not designed to afford a sole means for determining whether the debt is a valid obligation or whether damages may otherwise lie for breach of contract.â â Tully Drilling Company, Inc. v. Shenkin, 409 Pa.Super. 333, 335 , 597 A.2d 1230, 1231 (1991) (quoting Raymond S. Hess, Inc. v. Kutner, 13 Pa. D. & C.3d 556, 559 (1978), aff'd, 268 Pa.Super. 610 , 413 A.2d 1125 (1979)). Based on the Courtâs review of Pennsylvaniaâs Mechanicsâ Lien Law, we note that 49 P.S. § 1305 recognizes that there are circumstances when a mechanicsâ lien can be filed despite the noncompletion of work. This section states: Except in the case of destruction by fire or other casualty, where, through no fault of the claimant, the improvement is not completed, the right to a lien shall nevertheless exist. 49 P.S. § 1305. According to the plain language of this section, a claimant can still have a valid mechanicsâ lien when an improvement is not completed so long as the noncompletion is âthrough no fault of the claimant.â Therefore, the issue which the Court must resolve is whether there is a genuine dispute as to whether Debtorsâ noncompletion of its work was âthrough no faultâ of its own. *157 Application of standard of review to determine Whether a genuine issue of material fact exists With regard to Debtorâs claim against them, Defendants have met their burden by informing the court of the basis of their motion and identifying those portions of the âpleadings, ... admissions on file, together with the affidavitsâ which demonstrate the absence of a genuine issue of material fact. Based on the Agreement, the Addendum to Agreement, Change Orders # 1 and # 2, the Addendum to Contract and the Affidavits which list the amounts paid by Century to Debtor pursuant to the terms of the aforementioned documents, Defendants have established that Century paid Debtor the amounts which the parties agreed Century owed to Debtor as of January 29, 2008. Consequently, in order to oppose the motion for summary judgment, Debtor must set forth âspecific facts showing that there is a genuine issue for trial.â Debtor has failed to do so. In support of its Opposing Brief, Debtor submitted an affidavit consisting of seven paragraphs. In these paragraphs, the affiant merely informs the Court that: (i) Debtor completed all of the rough electrical work up to and including the eighth floor at the work-site; (ii) Debtor made repeated demands to Defendants for work âalready authorized and completedâ and that such demands went âunreturned by Defendantsâ; (iii) Debtor made final notice to Defendants for payment on work already complete with notice of âlocking-out and tagging-out all incomplete power sourcesâ to which the Defendants did not respond; and (iv) Debtor removed itself from the work-site. The Affiant provides no facts, specific or general, about the work which the Debtor contends was authorized and for which it asserts it was not paid. When was the work authorized? Who authorized the work? Is there a written agreement memorializing the authorization for additional work? 7 Why did the Debtor enter into the Addendum to Contract if it failed to obligate the Defendants to pay for all work which had been authorized and completed? Because the only item offered in support of Debtorâs opposition to Defendantsâ Motion is the aforementioned cursory affidavit, the Debtor has failed to supply any facts to answer these questions. In short, the Debtor has failed to provide specific facts showing that there was work for which it was authorized and for which payment was due and owing when it walked off of the job. Consequently, the Debtor has failed to show that there is a genuine issue of material fact for trial as to whether the noncompletion of work on the Project was âthrough no faultâ of its own. Analysis of Debtorâs contention that summary Judgment should Not be granted because the Discovery process is still ongoing Debtor argues that, because discovery is still ongoing in this adversary proceeding, ânot enough pleadings, depositions, admissions existâ for this Court âto properly determine the absence of any issue of material fact.â Debtorâs Opposing Brief at 3. The Court disagrees. The factual record which the Defendants submitted demonstrates the absence of a genuine *158 issue of material fact. Consequently, Debtor is obligated, as stated above, to oppose the motion by setting forth specific facts showing there is a genuine issue for trial. Moreover, if the Debtor believed that it needed additional discovery to adequately address and oppose Defendantsâ Motion, Debtor was required to file an affidavit pursuant to Rule 56(f) âidentifying âwith specificity what particular information was sought, how, if uncovered, it would preclude summary judgment; and why it has not previously been obtained.â â Gaston v. United States Postal Service, 319 Fed.Appx. 155, 159 , 2009 WL 692377 , at *3 (3d Cir. Mar. 18, 2009) (quoting Bradley v. United States, 299 F.3d 197 , 206-07 (3d Cir.2002) (internal quotation and citation omitted)). See also Hill v. Lamanna, 2006 WL 2433773, at *9 n. 9 (W.D.Pa. Aug. 18, 2006) (listing information which must be contained in Rule 56(f) affidavit) (quoting Pastore v. Bell Telephone, 24 F.3d 508 , 511 (3d Cir.1994)). Debtor did not file such an affidavit. Its failure to do so is fatal to its argument that it should be given more time to conduct discovery before the Motion is decided. Connolly v. Reliastar Life Ins. Co., Inc., 2006 WL 3355184 , at *4 (E.D.Pa. Nov. 13, 2006) (rejecting non-movantâs argument that it would be premature to rule upon motion for summary judgment until she was given an opportunity to conduct further discovery because non-movant failed to file a Rule 56(f) affidavit as the rule requires). Summary judgment shall be Granted on Debtorâs claims Since the Debtor has failed to set forth specific facts showing that there is a genu-nie issue for trial as to whether its non-completion of work was through no fault of its own, the factual record will be taken as presented by the Defendants. That record shows that Debtor failed to complete its work on the Project as required by Pennsylvaniaâs Mechanicsâ Lien Law. Consequently, Debtor is not entitled to the remedy of a mechanicsâ lien and has no right to recover on its claims. III. Defendantsâ Counterclaims As noted above, under the law of Pennsylvania, a mechanicsâ lien is a statutory proceeding created in derogation of the common law. Section 1701(c) of Pennsylvaniaâs Mechanicsâ Lien Law specifically provides that â[a] setoff arising from the same transaction or occurrence from which the claim arose may be pleaded but may not be made the basis of a counterclaim.â 49 P.S. § 1701. Consistent with this statutory mandate, Rule 1658 of the Pennsylvania Rules of Civil Procedure, which is applicable to âActions on Mechanicsâ Liens,â provides: Rule 1658. Set-off. Counterclaim. A set-off arising from the same transaction or occurrence upon which the claim is based may be pleaded as new matter. No counterclaim may be asserted. Pa. R. Civ. P. 1658. Since Defendants are statutorily precluded from asserting their counterclaims in this proceeding, they are not entitled to judgment on their claims as a matter of law. 8 IV. Summary For the reasons set forth above, Defendantsâ Motion shall be granted on Debtorâs *159 claims against them but denied as to their counterclaims against the Debtor. . It is significant that the parties agreed, before the Debtor walked off of the job, that Century owed the Debtor only $59,202 for labor because the mechanicsâ lien which Debtor filed was for payments due and owing solely for labor and not for any supplies, equipment, etc., furnished for the Project. See Mechanic's Lien Claim of Cliff Wood Electrical Contractors, Inc. ("Debtors' Mechanics' Lien Claim"), which is attached as Exhibit A to Debtorâs Complaint on Mechanics' Lien Claim of Cliffwood Electrical Contractor, Inc. ("Complaint"). 2 . According to Debtor, it "completed all the rough electrical work up to and including the eighth floor at the work-site,â Opposing Brief, Exhibit A at ¶ 4, but this was not all of the work which it had contractually agreed to do on the Project. 3 . Paragraph 8 of Debtor's Mechanics' Lien Claim lists the amounts due for "union electrical work.â Paragraph 9 totals the amounts listed in paragraph 8. These paragraphs state, in part: 8. The work that Claimant provided to the Owner of the Property involved the providing of union labor and services for journeymen electricians and an apprentice electrician on the Project as set forth in the Agreement between the Owner-Contractor, and changes orders thereunder including: a. six men providing union electrical labor for the wiring associated with bus duct for a total of 320 hours at a union rate of $95.00 per hour for a total of $30,400.00; b. two men providing union electrical labor for the wiring associated with the kitchen branch circuits fora total of 80 hours at a union rate of $95.00 per hour for a total of $7,600.00; g. two men providing union electrical labor for the wiring associated with installation of the fire alarm for a total of 112 hours at a union rate of $95.00 per hour for a total of $10,636.00; and h. two men providing union electrical labor for the wiring associated with rough electric wiring in guest rooms for a total of 224 hours at a union rate of $95.00 per hour for a total of $21,280.00. 9. The total amount claimed by Claimant to be due is $114,756.00 together with interest from February 15, 2008, for the union labor and services provided in connection with the Work at the Property ... for which this claim is made herein again the Owner of the Property and in the improvements and the properly which are the subject of this Claim. Mechanics' Lien Claim at ¶¶ 8-9. 4 . Defendants attached the following items to their Reply Brief: (i) Defendantsâ first set of requests for admission to the Debtor; and (ii) an affidavit by Defendantsâ legal counsel, Hannah Burrows, averring that: (a) she served the requests for admission on Debtor and the Chapter 7 Trustee on April 14, 2009; (b) she granted Debtorâs counsel's request for a ten day extension to respond to the requests for admission, thereby making Debtorâs response thereto due on May 25, 2009; and (c) no response to the requests for admission was received by that date. Exhibits A & B to Reply Brief. Because Debtor failed to timely respond to the requests for admissions, the requests are deemed admitted. See F.R.Civ.P. 36(a)(3) & (b) which is applicable herein pursuant to F.R.Bankr.P. 7036. As a result, Debt- or has admitted that the following documents are âgenuine, authentic and correctâ and that they were executed by the Debtor: (1) the Agreement; (2) Change Order #1; (3) Change Order # 2; and (4) Addendum to Contract. In any event, â[a]s is true with other material introduced on a summary judgment motion, uncertified or otherwise inadmissible documents may be considered by the court if not challenged.â Asousa Partnership v. Smithfield Foods, Inc. (In re Asousa Partnership), 2006 WL 1997426 , at *1 n. 1 (Bankr.E.D.Pa. June 15, 2006) (quoting 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2722, at 384 (1998)). Since Debtor failed to respond to Defendantsâ Requests for Admission, the following facts are also deemed admitted: (I) Debtor did not complete its work on the Project; and (ii) Debtor was paid $360,014.96 for its work on the Project. However, Defendants had already established these facts with the affidavits and documents which they submitted in support of their Motion. 5 . Rule 56 of the Federal Rules of Civil Procedure is applicable hereto pursuant to Rule 7056 of the Federal Rules of Bankruptcy Procedure. 6 . At the hearing on the Motion, the following colloquy ensued regarding the Debtorâs position in this matter and the Debtorâs lack of authority to support it: Counsel: Your Honor, the position of theâ the debtor in this case is that it was constructively thrown off this job. Of course, it admitted that it left without being complete, *156 but it left because it was owed $223,000 and didnât have the funds to continue to pay its employees, wasnât getting the supplies it needed to go forward with the work. So, yes, we did admit that we walked off the job, but we were constructively forced off of the job. The Court: Do you contend that that's an exception to the â the requirement? Counsel: Yes. The Court: â that the work be completed? Counsel: Yes, I do. The Court: Do you have authority for that? Counsel: Pardon? The Court: Do you have authority for that? Counsel: No, I do not have that with me right now, Your Honor. No, I do not have that, okay. Counsel: I did not research that, and Iâm not prepared to address that' â that issue today. Transcript, dated June 4, 2009, at 12-13. 7 . While not cited by either party, the Court notes that the "Notice of Intention to File Mechanicâs Lienâ which Debtor attached as Exhibit B to its Mechanicâs Lien Claim refers to an "approved change order by supervisor of $166,020.00.â However, there is no mention of such a change order anywhere else in the record. If such a change order exists, Debtor should have submitted it with its affidavit or at least referred to the change order in the affidavit. 8 . Since Defendants filed a Proof of Claim for $150,000 for breach of contract to which they attached, among other items, the Agreement, Addendum to Agreement, Change Order # 1, Change Order # 2 and the Addendum to Contract, Defendants may pursue relief against the Debtor and/or recover some distribution based on their Proof of Claim in the Debtorâs bankruptcy case. Case Information
- Court
- Bankr. E.D. Pa.
- Decision Date
- July 31, 2009
- Status
- Precedential