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L&B Services, LLC v. Star Construction, LLC

United States District Court, W.D. Missouri, Southern Division

July 10, 2018

L&B SERVICES, LLC., Plaintiff,
v.
STAR CONSTRUCTION, LLC, et al., Defendants.

          ORDER

          DOUGLAS HARPOOL UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant Star Construction, LLC's, Motion for Partial Summary Judgment. (Doc. 77).

         LEGAL STANDARD

         Summary judgment is proper if, viewing the record in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “Where there is no dispute of material fact and reasonable fact finders could not find in favor of the nonmoving party, summary judgment is appropriate.” Quinn v. St. Louis County, 653 F.3d 745, 750 (8th Cir. 2011). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the movant meets the initial step, the burden shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To do so, the moving party must “do more than simply show there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)

         BACKGROUND

         This matter arises from a contract dispute concerning payment for work performed by a subcontractor. Defendant Star Construction, LLC, entered into a Master Contractor Agreement (MCA) with Windstream Supply, LLC, in which Star would perform work involving the placement of telecommunications lines underground. Payments to Star were made on a per-unit basis. Generally, one foot of buried material was equal to one unit. Pursuant to the MCA, Star subcontracted with Plaintiff L&B Services, LLC, to perform some of the work. The MCA and all subsequent addenda, amendments, or modifications were incorporated into the subcontract. The subcontract permitted Star to withhold payment for, among other things, L&B's failure to comply with the terms and conditions of the subcontract and its associated documents. The subcontract indicated that time was of the essence regarding the performance of L&B's obligations.

         The subcontract required L&B to submit its invoices or daily billing sheets no later than Monday for any work performed the preceding week. A provision of the subcontract stated that an invoice or daily billing sheet would not be paid if L&B submitted it more than thirty days after the day on which the work was performed, unless there was a “viable reason” that the invoice was not submitted within thirty days. Timely submission of invoices or daily billing sheets were a material provision of the subcontract due to Star's financial reporting obligations under the Sarbanes-Oxley Act. L&B's corporate representative stated during a deposition that L&B was required to make timely submissions to be entitled to payment. In December 2016 and January 2017, L&B submitted eighteen invoices to Star with a total value of $94, 674.38. These invoices were more than thirty days late and some were up to eight months late. During the deposition of John Lorenz, one of L&B's corporate representatives, Mr. Lorenz stated that the failure to submit the invoices was voluntary and done in an effort to stay under the estimate of what would be required to complete the job. And another corporate representative stated during a deposition that L&B had no expectation of receiving payment at the time the work was performed.

         The subcontract contains two provisions that make payment by Windstream to Star a condition precedent for payment from Star to L&B for work performed. They are, in essence, “pay-if-paid” provisions. Windstream would accept, correct, or refuse to pay invoices submitted by Star, based on L&B's invoices, and Windstream would issue payment to Star only after each job was completed. During the course of the work, Star would make advance payments to L&B based on L&B's invoices, and Star would later adjust those payments through takebacks or upward adjustments based on Windstream's payments to Star. The subcontract provided Star with the right to take back payments it advanced to L&B if Windstream ultimately refused to pay Star.

         The subcontract prohibited L&B from subcontracting any part of the work to be performed without the written consent of Star. The MCA made Star responsible for all of its subcontractors', and their subcontractors', compliance with the MCA's insurance requirements. L&B used subcontractors on a number of its jobs for Star, and it did not receive written consent from Star to use subcontractors on those jobs. During the course of the work, L&B issued decals of the L&B logo to its subcontractors. Those subcontractors put the logos on their vehicles. During the deposition for one of L&B's corporate representatives, the corporate representative admitted that someone driving by would think L&B, not a subcontractor, was performing the work.

         DISCUSSION

         This matter comes before the Court on a Motion for Partial Summary Judgment. Defendant Star Construction, LLC, seeks summary judgment on various categories of work, and their corresponding damages, on the basis that L&B cannot prove its breach of contract claim as to those categories. Star begins its Suggestion in Support with an introductory section summarizing the difficulties the parties have encountered in identifying the damages, and the theories underlying those damages, to which L&B believes it is entitled. Star's summary depicts what could easily be construed as intentional smokescreening by L&B and its corporate representatives, who have presented moving targets with regard to damages numbers. As of the time of the filing of this motion, Star claims that L&B still has not identified the specific dollar amounts that make up its damages claims, even after this Court told it to do so during a telephone conference concerning discovery deadlines. However, Star has identified what it believes are the four categories of work for which L&B claims entitlement to payment under the subcontract, and it seeks summary judgment on each of those four categories of work. The Court will address each of these four categories in turn. Star notes in its suggestions in support that these four categories of work likely involve overlapping damages.

         I. Summary Judgment and Rule 56 Before the Court begins its analysis of the substantive legal issues, the Court must address L&B's utter failure to comply with the mandates of Federal Rule of Civil Procedure 56 and this Court's Local Rule 56.1.

(a) Supporting Suggestions. A party moving for summary judgment must begin its supporting suggestions with a concise statement of uncontroverted material facts. Each fact must be set forth in a separately numbered paragraph ...

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