United States District Court, C.D. California
UNITED STATES OF AMERICA, for the use and benefit of NASATKA BARRIER, INCORPORATED d/b/a NASATKA SECURITY, Plaintiff,
INTERNATIONAL FIDELITY INSURANCE COMPANY, et al., Defendants. and RELATED CLAIMS.
FINDINGS OF FACT AND CONCLUSIONS OF LAW AS TO
DEFENDANTS' COUNTERCLAIM, THIRD-PARTY COUNTERCLAIM, AND
HONORABLE DALE S. FISCHER UNITED STATES DISTRICT JUDGE.
action involves a dispute between Plaintiff United States of
America, for the use and benefit of Nasatka Barrier, Inc.,
d/b/a Nasatka Security (Nasatka), and Third-Party Defendant
North American Specialty Insurance Company (NAS) on one hand,
and Defendants and Cross-claimants International Fidelity
Insurance Company, Insight Environmental Engineering &
Construction, Inc. (IFIC), Cesight Joint Venture, and Everest
Re-Insurance Company (Defendants) on the other hand. The
dispute arises from work performed by Nasatka for U.S. Army
Corps of Engineers (USACE) contract Number: W912DW-13-C-
0024, Project Name: FY2012 Access Control Point (ACP)
Infrastructure Phase I, PN 66206, a federal construction
project at Joint Base Lewis-McChord, WA (the
Project). Nasatka filed suit for breach of contract,
recovery under the Miller Act, and quantum meruit on February
19, 2016. Dkt 1. (Compl.) Defendants asserted a counterclaim
against Nasatka for breach of contract, a third-party claim
regarding Nasatka's performance bond, and affirmative
defenses relating to offset. Dkts. 34, 36 (Answers). This
action was tried before the Court from October 16, 2018 to
October 18, 2018.
heard and reviewed the evidence and having considered the
parties' post-trial briefs, the Court makes the following
findings of fact and conclusions of law.
Nasatka entered into a subcontract with InSight to provide
labor and materials to complete Active (wedge) and Passive
(cable) Vehicle barriers with full controls and automation
and Chain Link fencing (the Nasatka Contract) on the Project
for the total amount of $1, 121, 539.30. Tr. Ex. 39 (Nasatka
and Everest, together with CeSight, as principal, furnished a
Payment Bond according to 40 U.S.C. § 3131, to ensure
prompt payment to subcontractors and suppliers furnishing
labor, materials, or both in the prosecution of the work on
the Project. Tr. Ex. 141 (Payment Bond).
furnished a Performance Bond to Nasatka for the
Section 23.4 of the Nasatka Contract specifically provides
for the offset of claims in the event Nasatka owes Insight
any amount relating to Nasatka's work on the Project. Tr.
Ex. 39, Bates NASATKA 0004047 (Nasatka Contract).
Section 23.8 of the Nasatka Contract provides:
“[S]hould any legal court action be required to enforce
any part of this Subcontract and/or the Subcontract
Documents, or to recover damages for breach thereof, the
prevailing party shall be entitled to recover as
reimbursement the attorneys' fees and costs of litigation
actually incurred in said legal court action.”).
Id. at Bates NASATKA 0004048.
Defendants did not introduce evidence of damages at trial.
See Dkt. 142 (Second Amended Exhibit List
identifying exhibits admitted into evidence); Dkt. 158
(Partial Judgment Order); Dkt. 171 (Order Denying
Defendants' Motion for Reconsideration).
Breach of Contract Counterclaim
order to prevail on a breach of contract claim, the plaintiff
must prove: “(1) the existence of the contract, (2)
plaintiff's performance or excuse for nonperformance, (3)
defendant's breach, and (4) the resulting damages to the
plaintiff.” Oasis West Realty, LLC v. Goldman,
51 Cal.4th 811, 821 (2011). Insight and Cesight therefore had
the burden to prove damages to support their breach of
Cesight and Insight have not proven damages. See Ingenco
Holdings, LLC, v. Ace Am. Ins. Co., 921 F.3d 803, 821-22
(9th Cir. 2019) (upholding district court's sanction