Bowen Engineering, Corp. v. Pacific Indemnity Co.

83 F. Supp. 3d 1185, 2015 U.S. Dist. LEXIS 781, 2015 WL 73759
CourtDistrict Court, D. Kansas
DecidedJanuary 6, 2015
DocketCase No. 14-1224-JTM
StatusPublished
Cited by14 cases

This text of 83 F. Supp. 3d 1185 (Bowen Engineering, Corp. v. Pacific Indemnity Co.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bowen Engineering, Corp. v. Pacific Indemnity Co., 83 F. Supp. 3d 1185, 2015 U.S. Dist. LEXIS 781, 2015 WL 73759 (D. Kan. 2015).

Opinion

MEMORANDUM AND ORDER

J. THOMAS MARTEN, Judge.

This is a dispute involving a biofuels construction project located in Kansas, owned or operated by two entities, Aben-goa Bioenergy Biomass of Kansas, and Abener Teyma Hugoton GP. Plaintiff Bowen Engineering, an Indiana corporation, brought the original breach of contract and unjust enrichment action against defendant Walters Metal Fabrication, an Illinois corporation, seeking sums due in exchange for Bowen’s work. It also sued defendants Pacific Indemnity Company and Scott Process Systems, Inc., based on lien surety bonds issued in connection with the project. (Dkt. 1-1). Pacific and Scott removed the action to this court.

Following the removal, Bowen settled its claim against Walters, which was judgment in the amount of $718,781.92. Further, in addition to a direct payment of $200,000 to Bowen, Walters assigned to Bowen its claims against Scott and Pacific.

Bowen’s First Amended Complaint, filed December 9, 2014, advances claims of breach of contract and unjust enrichment against Scott for failing to pay Walters. Bowen also seeks to foreclose on the mechanics lien it filed against the project under K.S.A. 60-1101.

This matter is before the court on the Motion for Judgment on the Pleadings under Fed.R.Civ.PR. 12(c), as well as a Motion to Transfer Case, both filed by [1187]*1187defendants Pacific and Scott.1 In the former, the defendants argue that Bowen is not entitled to proceed against the bond filed in Stevens County, Kansas. In the latter, the defendants argue that the case should be transferred to a United States District Court in Missouri2 in light of the forum selection clause in the underlying Assembly Services Agreement (ASA) between Bowen and Walters. The defendants also note the Supreme Court’s recent decision in Atlantic Marine Construction Co. v. United States Dist. Ct., — U.S. -, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013), which altered the rules relating to transfers under 42 U.S.C. § 1404(a), including its determination that a plaintiffs choice of forum is entitled to no weight when it contravenes an otherwise applicable forum selection clause.

The Amended Complaint filed by Bowen on December 9, 2014, alters the relationship among the parties by removing Walters and adding contract claims against the defendants,3 but does not alter the two essential questions presented to the court — whether Bowen is close enough to the project to invoke the lien provision in the state construction fairness act, and, if so, if this requires vitiating the agreement to litigate all disputes in Missouri. The court finds that the answers to both questions is no.

Motion for Judgment on the Pleadings

The defendants’ Motion to Dismiss is grounded on the limitation on potential claimants to a statutory bond under Kansas law. Such claimants may proceed against the bond only if the claimant could have enforced and perfected a lien. K.S.A. 60-1103(a) provides:

Any supplier, subcontractor or other person furnishing labor, equipment, material or supplies, used or consumed at the site of the property subject to the lien, under an agreement with the contractor, subcontractor or oumer contractor may obtain a lien for the amount due in the same manner and to the same extent as the original contractor....

(Emphasis added.) The statute does not apply to remote suppliers, such as those that supply labor or materials to sub-subcontractors. See Wichita Sheet Metal Supply Inc. v. Dahlstrom and Ferrell Construction, 246 Kan. 557, 792 P.2d 1043, 1048 (1990); J.W. Thompson Co. v. Welles Products, 243 Kan. 503, 758 P.2d 738, Syl. ¶¶ 2-4 (1988); BRB Contractors v. Akkerman Equipment, 935 F.Supp. 1156, 1158-59 (D.Kan.1996) (suppliers to sub-subcontractors are not afforded statutory protection).

The defendants thus argue, and Bowen does not dispute, that under Kansas law suppliers to second-tier subcontractors or suppliers do not have lien rights.

But the parties differ as to the identity of the parties to the construction contract. Bowen characterizes Scott as the contractor, and suggests Abener Teyma Hugoton [1188]*1188GP (one of the parties contracting with Scott) was simply an agent of the owner, and not a true contractor. Thus, Bowen contends, it was a supplier to a subcontractor (Walters), and not a supplier to a sub-subcontractor. (Dkt. 37, at 2).

Bowen acknowledges that Abener held itself out as the contractor, but argues this is not binding on the court. It relies in part on the decision of the Missouri Court of Appeals in Tharp v. Keeter/Schaefer Investments, 943 S.W.2d 811 (Mo.Ct.App.1997) (finding under the facts of the case that a putative general contractor was actually an agent of the owner rather than a true contractor). Bowen further argues that Kansas law implicitly recognizes the concept of an owner’s agent in K.S.A. 60-1101, which provides that

Any person furnishing labor, equipment, material, or supplies used or consumed for the improvement of real property, under a contract with the owner or with the trustee, agent or spouse of the owner, shall have a lien upon the property for the labor, equipment, material or supplies furnished at the site of the property subject to the lien, and for the cost of transporting the same.

(Emphasis added). Since K.S.A. 60-1103 does not include such language, Bowen argues, it means such owner’s agents are not included.

Paragraph 3 of the state court Petition asserts that “Abener is either the owner of the Biomass Project or is the owner’s agent.” (Dkt. 1-1, at ¶ 3). In their separate Answers, Scott and Pacific each admitted Paragraph 3. (Dkt. 8, 9 at ¶ 3). But, as defendants note, their Answers cannot be fairly read to indicate that Abener’s “only role was as the owner’s agent.” (Dkt. 42, at 4, defendant’s emphasis). The defendants proceed to state specifically in their Answers that “Bowen is not entitled to any mechanic’s lien under Kansas law as it contracted with a supplier or sub-subcontractor to a subcontractor for the Project” (Dkt. 8, 9, at ¶ 41 (emphasis added)). Bowen cites no authority for the proposition that the roles of owner’s agent and contractor are exclusive.

The court concludes that even if Abener was an agent of the owner, this would not exclude it from acting as a contractor. K.S.A. 60-1103

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Bluebook (online)
83 F. Supp. 3d 1185, 2015 U.S. Dist. LEXIS 781, 2015 WL 73759, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bowen-engineering-corp-v-pacific-indemnity-co-ksd-2015.