United States District Court, D. Nebraska
MEMORANDUM AND ORDER
SMITH CAMP CHIEF UNITED STATES DISTRICT JUDGE
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
following facts are those alleged in the Complaint, ECF No.
1, and assumed true for purposes of the pending Motion to
December of 2013, Defendant 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.
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.
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.
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.
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. ¶
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.
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.
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).
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