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United States of America for the Use and Benefit of Gurtz Electric Co. v. Gilbane Building Co.

October 10, 2008

THE UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF GURTZ ELECTRIC COMPANY, PLAINTIFF,
v.
GILBANE BUILDING COMPANY; AND TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, DEFENDANT.



The opinion of the court was delivered by: Judge Joan H. Lefkow

MEMORANDUM OPINION AND ORDER

Plaintiff, Gurtz Electric Company ("Gurtz"), has filed a three-count complaint against Gilbane Building Company ("Gilbane") and Travelers Casualty & Surety Company of America ("Travelers") (collectively, "Defendants"), asserting claims under the Miller Act,*fn1 for breach of contract, and, alternatively, for recovery in quantum meruit. Defendants move pursuant to Fed. R. Civ. P 12(f) and 12(b)(6) to strike and dismiss certain allegations set forth in Gurtz's complaint, arguing that the contract between Gurtz and Gilbane bars recovery by Gurtz based on those allegations. Defendants also move to dismiss Gurtz's unjust enrichment claim in its entirety because Gurtz admits that a valid contract governs its claims. For the following reasons, Defendants' motion [#43] is granted in part and denied in part.

BACKGROUND*fn2

This case arises from the alleged breach of a contract executed between a construction manager, Gilbane, and one of its subcontractors, Gurtz. The United States Government Services Agency ("GSA") executed a contract with Gilbane ("Prime Contract") to perform alteration and modernization work on a federal building located in Chicago. Gilbane then entered into a subcontract with Gurtz to complete certain electrical, security, and fire alarm work ("Subcontract"). Gilbane agreed to pay Gurtz $7,825,262,*fn3 and Gurtz agreed to substantially complete its work by January 3, 2006.*fn4 Gurtz's materials and labor were also covered by the payment bond between Gilbane and its surety, Travelers, which was executed pursuant to the requirements of the Miller Act.

Three contractual provisions concerning the remedies available to Gurtz for delay are at issue in the instant motion. First, the Prime Contract contains an exculpatory clause which limits the availability of damages for delay to subcontractors ("Limitations Clause"). The Limitations Clause provides:

26.3.8 Neither the Owner [GSA] nor the Architect nor the Construction Manager [Gilbane] shall have liability to the Trade Contractor [Gurtz]. . . for delay, hindrance, or interference in the performance of the Work, however caused, except for delay or hindrance resulting from active interference of Owner [GSA] or its representatives in such Trade Contractor's [Gurtz's] execution of the Work, and except for delay or hindrance resulting from defective plans and specifications. (See Ex. A to Defs.' Mem. at 26.3.8).*fn5 Second, the Subcontract contains a provision which obligates Gilbane to work with GSA to extend the period of time for Gurtz to complete its work if Gurtz is delayed by "any act or neglect" on the part of Gilbane or GSA, by changes ordered in the work, or by "any causes beyond [its] control." (See Ex. 2 to Am. Complt. at 9.16). Third, the Subcontract contains a provision prohibiting Gurtz from bringing claims against Gilbane for delays caused by other subcontractors. (See id. at 20.1.7).

Gurtz argues that it was unable to substantially complete the work Gilbane assigned it by January 3, 2006, the adjusted substantial completion date. Gurtz alleges that Gilbane caused its delay by furnishing defective plans and specifications; demanding that Gurtz perform work different from, or in addition to, the work required under the subcontract; interfering with Gurtz's reasonable access to the Project and otherwise delaying and disrupting Gurtz's ability to work on the Project; failing to cooperate with Gurtz; and failing to properly schedule or coordinate its other subcontractors and suppliers in a manner which would permit Gurtz to perform its work in a timely and efficient manner. (See First Am. Compl. at ¶¶ 10-19, 35.) As a result of these delays and disruptions caused by Gilbane, Gurtz asserts that it was denied the ability to perform work in an organized and efficient manner and was instead forced to work in areas congested with other subcontractors. Furthermore, Gurtz contends that Gilbane's acts entitled Gurtz to time extensions under the subcontract but that Gilbane refused to provide them.

Gurtz filed this lawsuit against Gilbane and Travelers to recover over $2 million in additional labor and supervision costs, and premium time expenses, incurred as a result of Gilbane's alleged breaches of the subcontract. Gurtz's Amended Complaint asserts claims under the Miller Act (Count I), for breach of contract (Count II), and for recovery in quantum meruit (Count III).

STANDARDS

"A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint for failure to state a claim upon which relief may be granted." General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). For the purposes of a Rule 12(b)(6) motion, the court takes as true all well-pleaded allegations in the plaintiff's complaint and draws all reasonable inferences in favor of the plaintiff. Dixon v. Page, 291 F.3d 485, 486 (7th Cir. 2002). In order to survive a Rule 12(b)(6) motion, the complaint must provide the defendant with "fair notice of what the . . . claim is and the grounds upon which it rests." EEOC v. Concentra Health Servs., Inc., 496 F.3d 773, 776-77 (7th Cir. 2007) (citing Bell Atl. Corp. v. Twombly, --- U.S. ----, 127 S.Ct. 1955, 1964, 167 L.E.2d 929 (2007)). The allegations in the complaint must also be "enough to raise a right to relief above a speculative level." Twombly, 127 S.Ct. at 1965.

A motion made pursuant to Rule 12(f) asks the court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). Motions to strike are generally disfavored because of the likelihood that they may serve only to delay proceedings. Heller Financial, Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989). Nevertheless, a motion to strike may sometimes be "a useful means of removing 'unnecessary clutter' from a case, which will in effect expedite the proceedings." Reis Robotics USA, Inc. v. Concept Indus., Inc., 462 F. Supp. 2d 897, 904 (N.D. Ill. 2006) (quoting Heller, 883 F.2d at 1294).

DISCUSSION*fn6

Defendants move to strike and dismiss those portions of Counts I and II which support recovery from Gilbane for actions not specified in the Limitations Clause. Defendants also move to dismiss Gurtz's quantum meruit claim because they contend the parties' agree that an ...


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