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Fisk Electric Co. v. Obayashi Corp.

United States District Court, N.D. California

June 28, 2019

FISK ELECTRIC COMPANY, Plaintiff,
v.
OBAYASHI CORPORATION, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO STAY; AND FINDING PLAINTIFF'S MOTION TO STRIKE, DISMISS, OR STAY MOOT DOCKET NOS. 60, 68

          EDWARD M. CHEN UNITED STATES DISTRICT JUDGE

         Plaintiff Fisk Electric Company (“Fisk”) has filed suit against multiple defendants, including the Webcor/Obayashi Joint Venture (“WOJV”); Webcor Construction L.P.[1]; and Obayashi Corporation. The main claim between Fisk and these defendants - hereinafter collectively referred to as the WOJV Defendants - is breach of contract. The WOJV has filed counterclaims against Fisk and further asserted a third-party complaint.

         Currently pending before the Court are two motions: (1) the WOJV Defendants' motion to stay and (2) Fisk's motion to strike, dismiss, or stay the WOJV's third-party complaint. Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS the WOJV Defendants' motion and, as a result, finds Fisk's motion moot.

         I. FACTUAL & PROCEDURAL BACKGROUND

         A. Operative Pleadings

         In the operative second amended complaint (“SAC”), Fisk alleges as follows.

         In March 2009, the Transbay Joint Powers Authority (“TJPA”) and the WOJV entered into a written contract - hereinafter referred to as the “Prime Contract” - related to the construction of the Transbay Transit Center Project. See SAC ¶ 14. In the Prime Contract, the TJPA and the WOJV agreed that the latter would provide certain pre-construction services, serve as the construction manager/general contractor, and manage/administer subcontracts with trade subcontractors. See SAC ¶ 14.

         In November 2014, the WOJV and Fisk entered into a written contract - hereinafter referred to as the “Subcontract” - under which “Fisk agreed to furnish labor, materials, and equipment required by the Prime Contract for the [Transbay Transit Center] Project's Electrical, Communications, Security and Integrated Networks.” SAC ¶ 20; see also FAC, Ex. B (Subcontract). Fisk would be paid nearly $87 million for its work under the Subcontract. See SAC ¶ 20; see also SAC, Ex. B (Subcontract § 3) (listing contract price). The Subcontract also provided for additional compensation should there be “extra work and added cost required due to changes in the scope, conditions, or requirements for performance of the Subcontract work, and for delays, disruption, and acceleration of the work of Fisk and its subcontractors and suppliers.” SAC ¶ 23.

         According to Fisk, ultimately, it did perform extra work because, e.g., the WOJV made changes to the work and interfered with Fisk's work, and because changes in conditions were discovered, all of which “changed the nature of scope of the work and services required in the . . . Subcontract.” SAC ¶ 24. Fisk alleges that it has not been compensated for the extra work. In addition, it has not been compensated for some of the work required under the original terms of the Subcontract. Altogether, Fisk claims it is owed at least $60 million. See SAC ¶¶ 25-26. According to Fisk, the WOJV has breached the Subcontract by failing to pay. See FAC ¶ 27. Fisk also claims additional breaches of the Subcontract - e.g., “failing to complete precedent work necessary to allow Fisk to timely perform its scope of work, ” “improperly de-scoping portions of the . . . Subcontract and assigning said work to other contractors in violation of California law, ” and “[a]sserting arbitrary and groundless offset claims against Fisk.” SAC ¶ 27.

         In the SAC, Fisk asserts multiple causes of action against the WOJV Defendants[2]:

(1) Breach of contract (i.e., the Subcontract).
(2) Recovery on “stop payment notice” release bond.
(3) Violation of prompt-payment statute.
(4) Recovery on payment bond.

         In response to Fisk's SAC, the WOJV has asserted (1) a third-party complaint against the TJPA and (2) counterclaims against Fisk. In the third-party complaint against the TJPA, the WOJV alleges that the “TJPA was unable to fulfill its key contractual duties including making the critical decisions required to keep the Project on time and on budget.” Docket No. 63 (3d-Party Compl. ¶ 10). In its counterclaim, the WOJV takes notes of allegations made by the TJPA in other litigation that the “WOJV and its Trade Subcontractors, including Fisk, failed, in various respects, to properly provide certain work, services, materials, or equipment, as applicable in connection with the Project work.” Docket No. 64 (Countercl. ¶ 18). “[The] WOJV denies [the] TJPA's allegations and any liability to [the] TJPA”; however, “if it is determined that [the] TJPA is entitled to any recovery against [the] WOJV in this action, it will be due, in whole or in part, to the acts or omissions of [Fisk].” Docket No. 64 (Countercl. ¶ 20). The WOJV's counterclaims against Fisk include claims for breach of contract and express indemnity.

         B. Related State Court Litigation

         The instant case is not the only case related to the construction of the Transbay Transit Center Project. There are also four state court actions, namely:

(1) The Pacific Action (No. CGC-18-564434).
(2) The Skanska Action (No. CGC-18-566431).
(3) The WOJV Action (No. CGC-18-570621).
(4) The Desert Action (No. CGC-19-573549).

         The first, second, and fourth lawsuits were all brought by subcontractors on the Project against, inter alia, the WOJV. See also Dillon Decl. ¶ 3 (testifying that the WOJV subcontracted with various companies “to perform certain work on the project to construct the Transbay Transit Center Building and related structures”). The subcontractors' claims against the WOJV include, e.g., claims based on bonds and claims for breach of contract. In the Skanska Action, the WOJV responded by asserting cross-claims against the TJPA. See Dillon Decl., Ex. E (cross-claims). The TJPA in turn asserted claims against the WOJV and, in turn, the WOJV brought in additional parties - namely, subcontractors such as Fisk. See Dillon Decl., Ex. G (second amended cross-claims). According to the WOJV, although it ‚Äúdenies [the] TJPA's allegations and any liability to [the] TJPA, if it is ...


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