Edmund C. Scarborough vs Carotex Construction, Inc.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-12256 ELEVENTH CIRCUIT
Non-Argument Calendar MARCH 15, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 0:09-cv-60156-DLG
EDMUND C. SCARBOROUGH,
lllllllllllllllllllllPlaintiff-Counter-Defendant-
lllllllllllllllllllllThird Party Plaintiff-Cross-
lllllllllllllllllllllDefendant-Appellant,
versus
CAROTEX CONSTRUCTION, INC.,
VICTOR BLACKMON,
JOYCE BLACKMON,
RICHARD FLANDERS ENTERPRISES, INC.,
lllllllllllllllllllllDefendants-Cross-
lllllllllllllllllllllDefendants-Appellees,
WESCO DISTRIBUTIONS, INC.,
llllllllllllllllllllll
llllllllllllllllllllllDefendant-Counter-Claimant,
G. PROULX, LLC, et al.,
lllllllllllllllllllllDefendants-Cross-Claimants
lllllllllllllllllllllCounter-Claimants,
HSBC REALTY CREDIT CORPORATION (USA), et al.,
llllllllllllllllllllDefendants,
FIRST MOUNTAIN BANCORP, et al.,
lllllllllllllllllllllThird Party Defendants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 15, 2011)
Before CARNES, HULL and KRAVITCH, Circuit Judges.
PER CURIAM:
Plaintiff-Appellant Edmund C. Scarborough (“Scarborough”) appeals the
district court’s dismissal of his Amended Complaint for lack of subject matter
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jurisdiction. After review, we affirm.
I. BACKGROUND
A. The Amended Complaint
On January 28, 2009, plaintiff Scarborough filed a declaratory action in
district court against the defendants and on May 11, 2009 filed an Amended
Complaint. The district court later permitted Scarborough to supplement the
Amended Complaint to join additional defendants. In his Amended Complaint,
Scarborough pled only diversity jurisdiction under 28 U.S.C. § 1332 and did not
plead federal question jurisdiction under 28 U.S.C. § 1331.
Plaintiff’s Amended Complaint, as later supplemented, alleged these facts.
The defendant Carotex Construction, Inc. (“Carotex”) is a Texas corporation that
is licensed as a Certified General Contractor in Florida. Joyce and Victor
Blackmon own Carotex. Joyce Blackmon is the President; Victor Blackmon is the
Vice President.
On November 10, 2006, defendant Carotex, as the contractor, entered into a
construction contract with the defendant Sunrise VA Medical, LLC (“SVAM”), as
the owner, to construct a clinic, known as the VA Outpatient Clinic (the
“Project”). SVAM is a foreign company authorized to conduct business in
Florida. SVAM owns the real property in Broward County, Florida on which the
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Project was to be constructed (the “Property”). SVAM is managed by Seavest,
Inc. (“Seavest”), a foreign corporation that is not authorized to do business in
Florida.
On December 14, 2006, defendant Carotex, as principal, and plaintiff
Scarborough, as individual surety, furnished a payment bond (the “Payment
Bond”) and performance bond (the “Performance Bond”). Both the Payment
Bond and the Performance Bond are attached as Exhibit A to the Amended
Complaint.
Beginning in May 2008, the defendant claimants (the “Claimants”)1 began
furnishing labor, services or materials for the Project at the request of the
defendant SVAM (the owner), as opposed to Carotex (the contractor). Defendant
SVAM began making payments directly to certain of the Claimants for the labor,
services or materials allegedly furnished.
1
The “Claimants” listed in the Amended Complaint (as supplemented) are as follows: G.
Proulx, LLC; Wesco Distributions, Inc.; Stanley Access Technologies, LLC; ASA Carlton, Inc.;
M&M Concrete Pumping, Inc.; Ferguson Fire & Fabrication, Inc.; American Cutting and Drilling
Company; Specialties Source, Inc.; Construction Industry Associates, Inc.; Richard Flanders
Enterprises, Inc.; City Electric Supply Company; Banner Supply Company Pompano; B&R Glass
and Glazing, Inc.; Coral Construction of South Florida, Inc.; Coral Contracting LLC; Tri-County
Building Specialties; Rauland-Borg Corporation of Florida; Sunbelt Rentals, Inc.; Windmill
Sprinkler Co., Inc.; Allied Barton Security Services LLC; Continental Florida Materials, Inc.;
Decon Environmental & Engineering, Inc.; Florida Designer Cabinetry; Randall Rents of Florida,
Inc.; Elan Landscape, Inc.; American Equipment Rental, Inc.; All Construction Fastening
Systems, Inc.; Tampco Group, Inc.; Kelly Refrigeration Services, Inc.; and Mac-Products, Inc.
4
The Claimants served notices of nonpayment to plaintiff Scarborough (the
surety), alleging that they had furnished labor, services, or materials for the
improvement of the Property but had not been fully paid. Scarborough’s
Amended Complaint alleged that each defendant Claimant seeks payment solely
for labor, services or materials it had furnished at SVAM’s behest. None of the
Claimants sought payment for labor, services, or materials furnished at Carotex’s
behest.
In Count I, plaintiff Scarborough sought a declaratory judgment against the
defendant Claimants that Scarborough was not liable under the Payment Bond to
any of the Claimants for labor, services or materials furnished after the Claimants
began furnishing labor, services, or materials at SVAM’s direction and behest. In
Count II, plaintiff Scarborough sought a declaratory judgment against defendants
HSBC Realty Credit Corporation (USA) (“HSBC”) and SVAM, obligees on the
Performance Bond (the “Obligees”), as well as Seavest, that Scarborough was not
liable to the Obligees or Seavest under the Performance Bond because the
Obligees failed to declare Carotex to be in default, to terminate the contract, or to
give Scarborough an opportunity to perform under the Performance Bond.
Plaintiff Scarborough also brought claims against the defendants Carotex,
Joyce Blackmon, and Victor Blackmon for breach of a General Agreement of
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Indemnity (Count III), for specific performance (Count IV), and for preliminary
injunctive relief (Count V).
C. Defendant SVAM’s Motion to Dismiss
On October 19, 2009, defendant SVAM filed a motion to dismiss
Scarborough’s Amended Complaint for lack of subject matter jurisdiction due to
the absence of complete diversity between the parties, arguing that plaintiff
Scarborough is a citizen of Florida, as are fifteen of the defendants listed in
Scarborough’s Amended Complaint. In response, Scarborough did not argue
diversity jurisdiction. Instead, Scarborough’s response raised federal question
jurisdiction, arguing that (1) the Project was a “public work of the Federal
Government” under 40 U.S.C. § 3131(b), and (2) that therefore the claims against
Scarborough under the Payment and Performance Bonds arose under the Miller
Act, 40 U.S.C. § 3133(b), pursuant to which federal courts have exclusive
jurisdiction. See 40 U.S.C. § 3133(b)(3)(B).2
2
The Miller Act requires a person awarded a contract for the construction, alteration or
repair of “any public building or public work of the Federal Government” to post performance
and payment bonds for the protection of the United States and persons furnishing labor or
material. 40 U.S.C. § 3131(b) (emphasis added). In the event of the contractor’s nonpayment for
such work or material, “[e]very person that has furnished labor or material in carrying out work
provided for in a contract for which a payment bond is furnished under [§] 3131 of this title . . .
may bring a civil action on the payment bond for the amount unpaid at the time the civil action is
brought . . . .” 40 U.S.C. § 3133(b)(1). Federal courts have exclusive jurisdiction over claims
brought under the Miller Act. 40 U.S.C. § 3133(b)(3)(B).
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The district court concluded that there was no diversity jurisdiction or
federal question jurisdiction. The district court dismissed the Amended Complaint
without prejudice for lack of subject matter jurisdiction. As to federal question
jurisdiction, the district court noted that “Scarborough failed to plead a federal
question as the basis for this Court’s jurisdiction in its Amended Complaint . . . .”
The district court concluded that in any event, the Project is not a public work for
the purposes of the Miller Act and as a result, it could not exercise federal
question jurisdiction.3
Plaintiff Scarborough now appeals the district court’s dismissal of the
Amended Complaint. Scarborough concedes lack of diversity jurisdiction and
argues only federal question jurisdiction under 28 U.S.C. § 1331.4III. DISCUSSION
3
Prior to this case, the district court had another case involving this same Project and one
Claimant, Wesco Distribution, Inc. (“Wesco”). Wesco sued Scarborough in state court for, inter
alia, breach of the Payment Bond, and Scarborough removed the case to federal court. The
district court granted Wesco’s motion to remand the case to state court, finding no diversity or
federal question jurisdiction. The district court found that the Project was not a “public work of
the Federal Government” under the Miller Act because the government (1) is not a party to the
construction contract between SVAM and Carotex, (2) does not own the Property, and (3) did not
provide funding for the Project.
In its order in this case, the district court cited its holding in the earlier case, stating that
both cases involved “the identical project, identical surety and the identical owner of the
property, all factors considered in the Court’s determination.”
4
We review de novo a district court’s decision to grant a motion to dismiss for lack of
subject matter jurisdiction pursuant to Rule 12(b)(1). Sinaltrainal v. Coca-Cola Co., 578 F.3d
1252, 1260 (11th Cir. 2009).
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Pursuant to 28 U.S.C. § 1331, district courts have jurisdiction over “all civil
actions arising under the Constitution, laws, or treaties of the United States.” 28
U.S.C. § 1331. “The well-pleaded-complaint rule has long governed whether a
case ‘arises under’ federal law for the purposes of § 1331.” Holmes Grp., Inc. v.
Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830, 122 S. Ct. 1889, 1893
(2002). Under the “well-pleaded-complaint” rule, the Supreme Court has stated
that “[a] suit arises under the Constitution and laws of the United States only when
the plaintiff’s statement of his own cause of action shows that it is based upon
those laws or that Constitution.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1,
6, 123 S. Ct. 2058, 2062 (2003) (quotation marks omitted and emphasis added).
For federal question jurisdiction to exist, a plaintiff’s complaint must “claim a
right to recover under the Constitution and laws of the United States.” Bell v.
Hood, 327 U.S. 678, 681, 66 S. Ct. 773, 775 (1946).
In addition, Federal Rule of Civil Procedure 8(a)(1) provides that a pleading
must contain “a short and plain statement of the grounds for the court’s
jurisdiction.” Fed. R. Civ. P. 8(a)(1). A court may find a basis for federal
question jurisdiction even if a complaint lacks such a jurisdictional statement, so
long as the complaint makes “references to federal law sufficient to permit the
court to find § 1331 jurisdiction.” Miccosukee Tribe of Indians v. Kraus-
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Anderson Constr. Co., 607 F.3d 1268, 1275-76 (11th Cir. 2010) (“Rule 8(a)(1) is
satisfied if the complaint says enough about jurisdiction to create some reasonable
likelihood that the court is not about to hear a case that it is not supposed to have
the power to hear.” (quotation marks and brackets omitted)), petition for cert.
filed, 79 U.S.L.W. 3361 (U.S. Nov. 29, 2010) (No. 10-717). However, where a
complaint is “devoid of a single citation to a Constitutional provision, a federal
statute, or a recognized theory of common law as the basis for the allegation that
the [plaintiff’s] cause of action arises under federal law,” we have held that the
allegations are insufficient to establish jurisdiction under § 1331. See id. at 1276.
Regardless of whether the Project at issue in this case is in fact a “public
work,” we conclude that the allegations in the Amended Complaint are insufficient
to establish federal question jurisdiction under the Miller Act. Scarborough’s
Amended Complaint does not mention or cite the Miller Act, nor does it allege
that the Project was a public work of the federal government. It contains no
allegations that the federal government provided funding for the Project, is a party
to the construction contract between SVAM or Carotex, has any ownership
interest in the Property, or had any involvement whatsoever in the Project. The
only reference to the federal government is not in the Amended Complaint but in
the language in Exhibit A (the Bonds) binding Carotex and Scarborough to “the
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United States of America, acting through the Secretary of the Department of
Veterans Affairs.” Nowhere in the factual allegations of the Amended Complaint
is there an allegation supporting the notion that the Claimants’ claims under the
Bonds fall within the purview of the Miller Act.
Scarborough argues that, because defendant SVAM made a “factual attack,”
rather than a “facial attack,” on the district court’s subject matter jurisdiction by
arguing that the Project is not a “public work” under the Miller Act, the district
court should have applied a Rule 56 summary judgment standard to assess whether
the work at issue is a “public work” under the Miller Act. Scarborough argues the
issue of whether the Payment Bond and Performance Bond were issued pursuant
to the Miller Act is “core to the issues which Scarborough requested the trial court
to determine” in the Amended Complaint.
This argument is without merit. Scarborough’s Amended Complaint seeks a
declaratory judgment that he is not liable under the Payment and Performance
Bonds because the Claimants sought payment for labor and supplies furnished at
the request of the owner SVAM, not the contractor Carotex, and because HSBC
and SVAM failed to declare Carotex to be in default on the construction contract
or take steps that would allow Scarborough to perform. Nowhere in
Scarborough’s Amended Complaint does he make any reference to the federal
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government’s involvement in the Project, the Miller Act, or the status of the
Project as a “public work.”5 Importantly, after the motion to dismiss was filed,
Scarborough never sought leave from the district court to amend the Amended
Complaint in the district court to make any such allegations. Under these
particular circumstances, we conclude that the Amended Complaint’s allegations
are insufficient to establish a federal question under § 1331. See Miccosukee
Tribe of Indians, 607 F.3d at 1276.
Because the Amended Complaint fails to satisfy the well-pleaded complaint
rule as to federal question jurisdiction, and because Scarborough never sought
leave to amend the Amended Complaint to correct its deficiencies, the district
court did not err in concluding it had no jurisdiction.6 The parties agree that there
5
This Court has not yet defined what makes a construction project a “public work” within
the meaning of the Miller Act, nor does the Miller Act itself provide a definition. In a case
involving a project authorized under the National Industrial Recovery Act, the Supreme Court
concluded that a library constructed on the campus of Howard University was a “public work”
within the meaning of the Miller Act because it was constructed with funds from the federal
government and was established to serve the interest of the general public, despite the fact that
Howard University was a private institution and held title to the land and the buildings. United
States ex rel. Noland Co. v. Irwin, 316 U.S. 23, 28-30, 62 S. Ct. 899, 902 (1942); see also
Operating Eng’rs Health & Welfare Trust Fund v. JWJ Contracting Co., 135 F.3d 671, 675 (9th
Cir. 1998) (“Although there is no clear test for designating a project a ‘public work of the United
States,’ courts often look to the following as indicia: whether the United States is a contracting
party, an obligee to the bond, an initiator or ultimate operator of the project; whether the work is
done on property belonging to the United States; or whether the bonds are issued under the
Miller Act.”).
6
Scarborough also contends that the district court erred because it based its dismissal of
the Amended Complaint in part on its earlier order in the Wesco case, in which it found that the
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is no diversity jurisdiction under § 1332, and there is no other basis for subject
matter jurisdiction asserted. Therefore, the district court did not err in dismissing
the Amended Complaint without prejudice for lack of subject matter jurisdiction.7
AFFIRMED.
Project at issue was not a “public work” within the meaning of the Miller Act. Scarborough
contends that the district court’s finding in the Wesco action was based solely on the factual
allegations in Wesco’s complaint and cannot apply here.
Because we conclude that Scarborough’s Amended Complaint failed, on its face, to
present sufficient factual allegations of a federal question such that it satisfied the “well pleaded
complaint” rule, we decline to address whether the district court erred in basing its dismissal on a
finding that the Project was not a “public work” within the meaning of the Miller Act.
7
Plaintiff Scarborough's August 2, 2010 motion to supplement the record is DENIED.
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