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JDS Construction, LLC v. Jacobsen Construction Co., Inc.

United States District Court, D. Hawaii

December 5, 2018

JDS CONSTRUCTION, LLC, Plaintiff,
v.
JACOBSEN CONSTRUCTION COMPANY, INC.; FIDELITY & DEPOSIT COMPANY OF MARYLAND, INC.; LIBERTY MUTUAL INSURANCE COMPANY, INC.; JOHN and JANE DOES 1-50; DOE CORPORATIONS 1-50; and DOE ENTITIES 1-50, Defendants. JACOBSEN CONSTRUCTION COMPANY, INC., Third-Party Plaintiff,
v.
JAMES D. ARTHUR, Third-Party Defendant.

          ORDER GRANTING DEFENDANT JACOBSEN CONSTRUCTION COMPANY, INC.'S MOTION TO DISMISS THIRD-PARTY DEFENDANT JAMES D. ARTHUR'S COUNTERCLAIM

          SUSAN OKI MOLLWAY, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION.

         Before this court is a motion filed by Defendant Jacobsen Construction Company, Inc. (“Jacobsen”), seeking dismissal of the Counterclaim filed by Third-Party Defendant James D. Arthur (“Arthur”). Jacobsen contends that the Counterclaim fails to state a claim upon which relief can be granted. ECF No. 30. In the alternative, Jacobsen seeks a more definite statement. See Id. Finding that Arthur fails to allege a viable claim, the court grants Jacobsen's motion and dismisses Arthur's Counterclaim with leave to amend.

         II. BACKGROUND.

         This case arises out of a construction project (“Project”) for the Culinary Institute of the Pacific at Kapiolani Community College. See ECF No. 5-1, PageID # 29. Jacobsen was the general contractor for the Project and hired JDS Construction, LCC (“JDS”), as a subcontractor. Id. Arthur is JDS's CEO. ECF No. 5-2, PageID # 33. The Project appears to have been completed in April 2017. See ECF No. 5-1, PageID # 31.

         On March 13, 2018, JDS filed a Complaint in state court against Jacobsen, asserting breach of contract and quantum meruit claims.[1] See Id. at 29-32. The Complaint alleges that Jacobsen breached a Master Subcontract Agreement dated April 28, 2015, by unreasonably withholding payments to JDS despite JDS's completion of all required work on the Project. See Id. at 29-30. The Complaint also alleges that JDS “repeatedly received notice of [delays in the work schedule] in an untimely manner, only after labor, materials and equipment had already been ordered and could not be canceled” and that Jacobsen should pay for the expenses incurred as a result of the delays. See Id. at 31. On April 20, 2018, the case was removed to federal court on the basis of diversity jurisdiction. ECF No. 1.

         On July 20, 2018, Jacobson filed a Third-Party Complaint against Arthur.[2] ECF No. 15. The Third-Party Complaint alleges that Arthur executed the Master Subcontract Agreement[3] “as the CEO of JDS and also as a personal Guarantor, ” and that Arthur represented to Jacobsen that both JDS and Arthur were “properly licensed as contractors in the State of Hawaii to perform the work provided for under the Contract.” Id., PageID # 134. It argues that JDS breached the Master Subcontract Agreement in several ways, including by failing to maintain its contractor's license, and that “Arthur, as Guarantor under the Subcontract, is jointly and severally liable with JDS for all damages arising out of the Subcontract.” Id. at 137.

         Arthur filed an Answer and Counterclaim against Jacobsen on August 27, 2018. ECF No. 26. The Counterclaim states in full:

32. [Arthur] asserts that [Jacobsen] interfered with his contractual relations with [Arthur's] second-tier subcontractors and suppliers for the University of Hawaii, Kapiolani Community College, Culinary project (“Project”). [Jacobsen's] refusal to make timely payment and reliance on stalling tactics as evidenced by Attorney Ogawa's May 11, 2017 letter on behalf of [Jacobsen], served to interfere with [Arthur's] contractual relations with his second-tier subcontractors and suppliers for the Project.
33. [Arthur] asserts that [Jacobsen's] conduct in refusing to make timely payment and reliance on stalling tactics amounts to unfair competition as it adversely affected [Arthur's] ability to obtain services and supplies from his second-tier subcontractors and suppliers for work required on his other projects.
34. [Arthur] alleges he sustained damages to be proven at Trial due to [Jacobsen's] breach of the implied covenant of good faith in all its contractual dealings with all of its subcontractors, second-tier subcontractors and suppliers for the Project.
35. [Arthur] had no control over making payments to his second-tier contractors and suppliers after [Jacobsen] unilaterally stopped payments to [Arthur's] second-tier subcontractors and suppliers for the Project.

See id., PageID #s 228-29.

         On September 17, 2018, Jacobsen filed the present motion to dismiss. ECF No. 30. Jacobsen asks this court to dismiss Arthur's Counterclaim under Rule 12(b)(6) or, in the alternative, to order Arthur to provide a more definite statement under Rule 12(e). See ECF No. 30-1, PageID # 262.

         Arthur's opposition to Jacobsen's motion to dismiss was due on November 12, 2018. No timely opposition was filed, and the court informed the parties that it would decide the motion without a hearing. Several days later, on November 29, 2018, Arthur filed his opposition with no explanation for his tardiness. See ECF No. 37. The court disregards the opposition as untimely. See Local Rule 7.4 (“Any opposition or reply that is untimely filed may be disregarded by the court or stricken from the record.”).

         The court notes in any event that Arthur's opposition is primarily a declaration that seeks to add factual background to the challenged Counterclaim. While the declaration includes references to some material (such as a Certificate of Occupancy) that this court could, in its discretion, take judicial notice of, most of the allegations the declaration seeks to have the court consider go outside the issue of the sufficiency of Arthur's pleading and would require conversion of ...


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