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WCC Cable, Inc. v. G4S Technology LLC

United States District Court, D. Nebraska

April 27, 2018

WCC CABLE, INC., A Virginia Corporation; Plaintiff,
v.
G4S TECHNOLOGY LLC, A Delaware limited liability company; and LIBERTY MUTUAL INSURANCE COMPANY, Defendants. G4S TECHNOLOGY LLC, A Delaware limited liability company; Plaintiff,
v.
WCC CABLE, INC., A Virginia Corporation; and IRONSHORE INDEMNITY, INC., a Minnesota corporation, Defendants.

          MEMORANDUM AND ORDER

          LAURIE SMITH CAMP CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the Motion to Dismiss Count VI, ECF No. 74, filed by Defendant Liberty Mutual Insurance Company. For the reasons stated below, the motion will be granted.

         BACKGROUND

         The following facts are those alleged in the Complaint, ECF No. 1, and assumed true for purposes of the pending Motion to Dismiss.

         In December of 2013, Defendant[1] G4S Technology Inc. entered into a contract (Prime Contract) with the Virginia Depart of Transportation (VDOT) for the design and construction of a traffic and safety management system for portions of Interstate 64 in Virginia (Project). Complaint ¶ 7, ECF No. 1 in 17cv483, Page ID 3. The Prime Contract required G4S to meet certain interim deadlines and a final completion deadline by July 6, 2015. Id. ¶ 8.

         Nine months later, G4S subcontracted (Subcontract) with Plaintiff WCC Cable, Inc., for a portion of the Project's construction work, which included installing cable, conduit, and pullboxes for certain areas of the Project, with all materials to be provided to WCC by G4S. Id. ¶ 9. In November 2013, G4S, as principal, and Liberty Mutual, as surety, executed Payment Bond No. 024051952 (Bond) in the amount of $4, 599, 262.00 for the benefit of VDOT and all parties providing labor and materials to the Project. Id. ¶ 10. The total obligation of the Bond was guaranteed, jointly and severally, by G4S and Liberty. Id. ¶ 11.

         G4S instructed WCC to proceed with the work of the Subcontract beginning on or about September 15, 2014. Id. ¶ 12. At the time WCC was instructed to proceed, there were 294 calendar days remaining before G4S's Prime Contract deadline. Id. ¶ 13, Page ID 4. WCC alleges this was an insufficient amount of to complete its work., id. ¶ 14, and that adverse weather and G4S's failure to supply appropriate material and coordination limited WCC's ability to work, id. ¶ 15.

         Due to these challenges, WCC alleges that all parties agreed and understood that the completion date under the Subcontract would be waived, and that the initial completion date came and went without G4S attempting to establish a new completion date. Id. ¶ 22, Page ID 5. On August 10, 2015, G4S provided WCC with a schedule showing a revised completion date of September 11, 2015, for the Subcontract. Id. ¶ 25, Page ID 6. On August 12, 2015, notwithstanding G4S's alleged waiver of the initial completion date, G4S sent WCC a “Notice to Cure.” Id. ¶ 26. WCC alleges that following receipt of the letter, G4S specifically directed WCC's work means and methods. Id. ¶ 27.

         On September 25, 2015, G4S sent WCC a “Notice of Default and Bond Claim” on the grounds that WCC had not met the initial completion date. Id. ¶ 28. WCC objected to the Notice of Default, and continued to work at the Project as directed by G4S. Id. ¶ 29. G4S issued two subsequent notices to cure, the first on January 13, 2016, which listed items it deemed incomplete, id. ¶ 30, Page ID 7, and the second on January 26, 2016, which claimed that WCC failed to respond to the corrective action demanded in the prior notice, id. ¶ 33. WCC objected to both notices and continued to work on the Project under G4S's direction. Id. ¶ 34.

         WCC alleges that at the time of issuing of the notice, G4S was substantially in breach of the Subcontract. Id. ¶ 35. G4S has withheld amounts owed to WCC since November 2015. Id. ¶ 36, Page ID 8. G4S has paid WCC only $349, 074.31 of the total $933, 734.02 billed and owed, leaving an outstanding balance due to WCC of $584, 659.71. Id. ¶ 38.

         In late September of 2016, WCC provided notice to Liberty Mutual of G4S's lack of payment and submitted its claim for payment of the Outstanding Balance under the Bond. Id. ¶ 41. By letter dated September 28, 2016, Liberty Mutual acknowledged WCC's claim and requested additional documentation regarding the claim, id. ¶ 42, which WCC provided on November 14, 2016, id. ¶ 43, Page ID 9. Liberty Mutual denied WCC's claim on April 19, 2017. Id. ¶ 44. WCC alleged that the justifications set forth in Liberty Mutual's letter of denial were factually inaccurate, id. ¶ 45, and that Liberty Mutual “did not and has not adequately and in good faith investigated or responded to WCC's notice of claim, id. ¶ 46.

         WCC filed this action on May 25, 2017, alleging Breaches of Contract against G4S (Counts I and II); Breach of Implied Obligations against G4S (Count III); Unjust Enrichment against G4S and Liberty Mutual (Count IV); Breach of Payment Bond against G4S and Liberty Mutual (Count V); and “Common Law Bad Faith and Breach of Duty of Good Faith and Fair Dealing” against Liberty Mutual (Count VI).

         Regarding Count V, WCC alleged that Liberty Mutual “engaged in bad faith, including, but not limited to: (a) requesting information from WCC without the intent to act on such information; (b) failing to identify a reasonable basis for denial of indemnity to WCC; and (c) failing to promptly and fairly indemnify WCC for all covered losses under the Payment Bond.” As to Count VI, WCC alleged that Liberty Mutual:

“engaged in bad faith, including, but not limited to: (a) failing to adopt and implement reasonable standards for the prompt and thorough investigation and processing of claims; (b) failing to promptly and fairly indemnify WCC for all covered losses under the Bond; (c) failing to conduct a reasonable investigation before denying WCC's claim; and ...

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