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David Moreno Construction, Inc. v. Frontier Steel Buildings Corp.

July 2, 2009


The opinion of the court was delivered by: Oliver W. Wanger United States District Judge


Conference: 11/13/09 8:15 Further Scheduling Ctrm. 3 Ctrm. 7 Settlement Conference Date: 02/03/10 10:00

I. Date of Scheduling Conference.

June 26, 2009.

III. Summary of Pleadings

Plaintiff's Summary

1. This action concerns a public works project for the Kern Unified School District for the construction of its Records Retention Facility (the "Project"). Davis Moreno Construction Inc., ("Davis Moreno") submitted a bid to the District and was subsequently awarded the prime contract in connection with the Project. In its role as prime contractor, Davis Moreno engaged subcontractors and suppliers, including Frontier Steel Buildings Corp. ("Frontier Steel").

2. A portion of the Project required the fabrication and erection of a steel building. During the bidding process, Davis Moreno obtained a bid from Defendant, Frontier Steel, for the steel structure for the KUSD Office Record Retention Facility. The proposal by Frontier Steel included an offer to erect the structure.

3. Davis Moreno was the low bidder and was awarded the job by the Kern High School District. Davis Moreno listed Frontier Steel on the list of subcontractors supplied to the Kern High School District. Frontier Steel was notified by the Davis Moreno estimating and bidding department that they were selected as a subcontractor on the Project.

4. On December 13, 2007, Davis Moreno sent to Frontier Steel a Purchase Order for the steel dated December 11, 2007. On January 10, 2008 Davis Moreno received a modified Purchase Order by fax transmission from Frontier Steel. On the same day, Davis Moreno signed the Purchase Order, subject to the conditions set forth in a letter by Davis Moreno to Frontier Steel outlining that Davis Moreno was agreeable relative to the Purchase Order.

5. Under the terms of the Contract, Frontier Steel was to provide and deliver a pre-engineered steel building at the job site in Bakersfield, California, for use in Davis Moreno's construction of the Kern Unified School District's records retention building. However, Frontier Steel refused to honor their bid to provide erection or an erector for the building for their quoted $70,750.

6. After Frontier Steel received Davis Moreno's letter of January 10, 2008, they proceeded to perform under the agreement, which included the agreement as to how jurisdiction would be established. The contract specifically required strict time requirements fo the submission and performance of the terms of the contract. The contract also specified that Davis Moreno would be damaged if Frontier Steel failed to perform in a timely manner or in accordance with the Project schedule. The contract further specified that non-performance by Frontier Steel would result in substantial damages suffered by Davis Moreno at the responsibility of Frontier Steel due to its nonperformance.

7. During the course of the Project, Frontier Steel failed to provide its submittals in a timely manner, in direct breach of the contract. Furthermore, on or about 6-16-08, Frontier Steel announced its position was to stop work on the Project altogether, which has resulted in and will result in further damages to Davis Moreno. Frontier Steel has not performed pursuant to the contract deadlines and has caused significant delays on the Project.

8. As a result of Frontier Steel's noncompliance, Davis Moreno has suffered liquidated damages at $1,000 per day for approximately 150 days; anticipated additional liquidated damages at a cost to Davis Moreno at $1,000 per day; extended performance costs at the rate of $600 per day charged directly to Davis Moreno by the Project owner; and anticipated additional liquidated damages at a cost to Davis Moreno of $600 per day with possible extended performance costs and other impact costs; as well as extended costs for Davis Moreno to mitigate its damages by contracting with others to perform Frontier Steel's duties on the Project at an estimated cost of $70,000.

9. Additionally, Davis Moreno contends that the work provided or offered to be provided by Frontier Steel in connection with the Project required a contractor's license. Frontier Steel does not possess a California contractor's license and, as such, under California law, Davis Moreno is entitled to seek disgorgement of all funds it paid to the unlicensed contractor, namely Frontier Steel.

Defendant's Summary

10. Frontier Steel filed its Motion to Dismiss for lack of jurisdiction asserting that the facts of this case do not establish the minimum contact necessary for jurisdiction over Frontier Steel in the subject transaction and seeking dismissal for an inconvenient forum with transfer to the U.S. District Court for the District of Colorado.

11. Defendant has filed its Motion to Reconsider the Court's Order of June 10, 2009, denying Defendant's Motion to Dismiss. The motion is calendared for September 14, 2009, at 10:00 a.m.

12. Frontier Steel is a Colorado corporation engaged in the design engineering of pre-engineered steel buildings. Davis Moreno, as General Contractor, entered into a contract ("Master Contract") for the construction of a Records Retention Facility with Kern Unified School District ("KUSD").

13. Davis Moreno and KUSD solicited bids from suppliers nationwide by posting requests for bids on the internet. The bids submitted by parties like Frontier Steel were shared among general contractors bidding on the Project. Davis Moreno won the contract for the Project with KUSD. Davis Moreno chose to deal with Frontier as its supplier for a pre-engineered steel building, and accepted Frontier Steel's form of bid, its quote.

14. The bid quote contained a declaration that the contract is "deemed to be executed in Colorado."

15. The parties finalized the terms of their agreement by letter dated January 10, 2008 from Davis Moreno to Frontier Steel. That letter was accepted in Colorado by Frontier Steel.

16. The agreement between Davis Moreno and Frontier Steel did not incorporate terms of the Master Contract with KUSD.

17. Furthermore, the Davis Moreno - Frontier Steel contract did not include erecting the steel building on site in California. Frontier's Quote estimated the cost of erection, but was never intended as a bid to erect the building, and terms for erecting the building were not included in the contract or the contract price between Frontier Steel and Davis Moreno.

18. Frontier Steel was a supplier, not a subcontractor, obligated only to design a pre-engineered steel building according to the general specifications of the Project, to provide the engineering calculations, and to order and supply the steel required for erection of the designed pre-engineered steel building.

19. Frontier commenced performance on or about January 10, 2008. Final delivery according to the contract specifications took place on or about June 15, 2008. During this period of performance, Frontier did not deal with KUSD or any municipality. Reviews and approvals were all directly solicited by Davis Moreno.

20. Time requirements, if any, in the Master Contract between KUSD and Davis Moreno as General Contractor were not incorporated into the Frontier - Davis Moreno Contract.

21. Immediately upon the execution of a contract, Frontier Steel commenced performance requirements and delivered its first drawings on January 25, 2008. Davis Moreno requested modifications of the drawings on at least four occasions. A permit was issued and approval for production of steel given on June 3, 2008. Construction drawings for steel fabrication were completed on June 19. The last requested changes were as late as June 22 and July 9 when the HVAC supplier and the Mechanical ...

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