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Readiness Management Support L.C v. Jesco Construction Corp.; and County of Henderson

January 14, 2011

READINESS MANAGEMENT SUPPORT L.C., PLAINTIFF
v.
JESCO CONSTRUCTION CORP.; AND COUNTY OF HENDERSON, ILLINOIS; AND VILLAGE OF GULFPORT, ILLINOIS, DEFENDANTS



The opinion of the court was delivered by: John A. Gorman United States Magistrate Judge

E-FILED

Friday, 14 January, 2011 03:13:26 PM

Clerk, U.S. District Court,

ORDER

The parties have consented to have this case heard to judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c), and the District Judge has referred the case to me. Now before the Court are the following related motions: Joint Motion to Amend Consent Judgment and Dismiss Count V by Readiness Management Support L.C. (herein, "RMS") and Henderson County (#118); Joint Motion for Entry of Judgment under Rule 54(b) by RMS and Henderson County (#121); Motion for Emergency Determination by JESCO (#124); and Motion for Leave to File Reply by JESCO (#130).

MOTION FOR LEAVE TO FILE REPLY #130

The Motion for Leave to file a reply is GRANTED. The Court notes that JESCO has already filed its reply rather than waiting for leave of court. In the interests of efficiency, the Court will not require refiling of the reply but will deem it to be filed as of the date of this Order. In the future, pleadings requiring leave of court should be filed as exhibits to motions.

REMAINING MOTIONS

Background

This litigation arose from the severe flooding of Henderson County and the Village of Gulfport in 2008. The County entered into a dewatering contract with JESCO that, unfortunately, was not bonded. JESCO subcontracted with, inter alia, RMS. The County has applied for FEMA funds with which to pay for the services it received. The pending motions center around FEMA funds that are referred to as PW1524 Funds. Although not dispositive, there was an earlier disbursement of FEMA funds, referred to as PW 1523 Funds, that plays into the events.

PW1523 Funds

In March 2010, the County received FEMA funds related to construction of a temporary levee in the amount of $309,038.40. Henderson County contributed its own funds, bring the total amount to $343,376.02. These funds are referred to as PW 1523 funds.

Because the County's contract was with JESCO, the PW 1523 Funds were released by the County to JESCO, with a written agreement between the two parties that the amount of this payment check would operate as a set-off against any award ultimately entered in this litigation on the claims of JESCO against the County.

In the fall of 2010, the County learned of allegations by one Leon Roy in a lawsuit filed in the Southern District of Mississippi against JESCO president John Shavers. In that lawsuit, it was alleged that the PW1523 funds were not distributed to PW1523 subcontractors who performed the work but were instead mis-used for Shavers' own personal benefit. That case was settled, and the County also believes that some of the PW1523 Funds were used to pay that settlement. During this same time frame, the County also began to receive reports that JESCO had not paid subcontractors for the PW1523 work.

The County has asked JESCO for documentation of how the PW1523 funds were disbursed. Although JESCO never provided those documents to the County, JESCO has filed ...


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