United States District Court, S.D. California
UNITED STATES OF AMERICA, FOR THE USE AND BENEFIT OF HELIX ELECTRIC, INC., a California corporation, Plaintiff,
KISAQ RQ 8A 2JV, a joint venture; FEDERAL INSURANCE COMPANY, a New Jersey corporation; and WESTERN SURETY COMPANY, a South Dakota corporation, Defendants KISAQ RQ 8A 2JV, a joint venture, Counter Claimant,
UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF HELIX ELECTRIC, INC., a California corporation; TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA; and ROES 1 through 10, inclusive, Counter Defendants.
WILLIAM Q. HAYES UNITED STATES DISTRICT JUDGE
matter before the Court is the motion for summary judgment
and partial summary judgment filed by Defendant and Counter
Claimant KISAQ RQ 2JV (“the JV”), Defendant
Federal Insurance Company (“Federal Insurance”),
and Defendant Western Surety Company (“Western
Surety”). (ECF No. 25).
7, 2015, the United States of America for the Use and Benefit
of Helix Electric, Inc. (“Helix”) initiated this
action by filing a complaint with a jury demand against the
JV, Federal Insurance, and Western Surety. (ECF No. 1). The
complaint alleges the following claims for relief: (1) breach
of subcontract against the JV, (2) recovery under the Miller
Act Payment Bond against Federal Insurance and Western
Surety, and (3) quantum meruit against the JV. Id.
At the hearing on this motion for summary judgment, the Court
dismissed the complaint with prejudice.
August 10, 2015, the JV, Federal Insurance, and Western
Surety collectively filed an answer to the complaint. (ECF
No. 8 at 1-8). The JV brings a counterclaim with a jury
demand against Helix and Travelers Casualty & Surety
Company of America (“Travelers”), and doe counter
defendants. (ECF No. 8 at 9-18). The JV alleges breach of
subcontract against Helix and recovery under performance and
payment bond against Travelers. Id. On September 9,
2015, Helix and Travelers filed an answer to the
counterclaim. (ECF No. 13).
October 31, 2016, Federal Insurance, the JV, and Western
Surety filed a motion for partial summary judgment and
summary judgment. (ECF No. 25). The JV, Federal Insurance and
Western Surety move for summary judgment as to the three
causes of action alleged by Helix in the complaint and the JV
moves for partial summary judgment as to liability on the
JV's counterclaim for breach of subcontract arising from
the Helix's alleged (1) failure to adequately staff the
project, (2) abandonment of the project, and (3) defective
work. Id. On November 21, 2016, Helix
filed a response in opposition to the motion for partial
summary judgment and a response to the motion for summary
judgment as to Helix's complaint. (ECF No. 28). On
November 28, 2016, the JV, Federal Insurance, and Western
Surety filed a reply.(ECF No. 29).
February 24, 2017, the Court heard oral argument on the
motion for summary judgment and partial summary judgment.
Statement of Fact
or about June 2, 2011, the JV entered into a written contract
with the United States of America . . . for a work of
improvement known as P136 Bachelor Enlisted Quarters, MCAS
Cherry Point, NC (‘Project'), Contract No.
N40085-11-C-4026 (‘Prime Contract').” (SUMF,
ECF No. 29-1 at ¶ 1). “The Project involved the
new construction of a Bachelor Enlisted Quarters building
(‘BEQ'), and the replacement of medium voltage
‘offsite' work at electrical substations, duct
banks, and manholes, at the Marine Corps Air Station in
Cherry Point, North Carolina.” Id. at ¶
2. “On or about November 3, 2011, the JV entered into a
written subcontract with Helix to complete all of the low
voltage, communications, fire alarm systems, exterior
lighting, and related electrical work for the BEQ, as well as
the ‘offsite' medium voltage replacement
work.” Id. at ¶ 3. “The original
Subcontract amount was $6, 150, 000, which was subsequently
increased by $85, 466.54 in authorized change orders,
resulting in a revised contract value of $6, 235,
466.54.” Id. at ¶ 4.
General Conditions of the Subcontract contains in part the
 B. Disputes Relating to CONTRACTOR
(i) Duty to Proceed:
SUBCONTRACTOR shall proceed diligently with performance of
the Work pending final resolution of any request for relief,
claim, appeal, or action arising out of disputes relating to
SUBCONTRACTOR guarantees and warrants its work against all
deficiencies and defects in materials and/or workmanship.
SUBCONTRACTOR agrees to replace or repair, at
CONTRACTOR's discretion, at SUBCONTRACTOR's sole cost
and expense, and to the satisfaction of OWNER and CONTRACTOR,
any and all materials or work adjudged by OWNER or CONTRACTOR
to be defective or improperly installed. This guarantee shall
continue for one (1) year following final acceptance and
payment under the Subcontract, or for any lengthier period
required by the Contract Documents. ...
22. PERFORMANCE and PROGRESS of the WORK
A. Time is of the essence in this Subcontract . . . . The
Work shall be carried on promptly, with dispatch, coordinated
with other work on the Project, all to the satisfaction of
CONTRACTOR and OWNER. If necessary, upon instruction from
CONTRACTOR, certain parts of the Work shall be prosecuted by
preference to others.
25. RECOURSE BY ...