Dennis Stubbs Plumbing, Inc. v. Travelers Casualty & Surety Co. of America

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
DENNIS STUBBS PLUMBING, 
INCORPORATED,
Plaintiff-Appellant,
v.  No. 02-2050
TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Gerald Bruce Lee, District Judge.
(CA-02-381-A)
Argued: May 8, 2003
Decided: June 5, 2003
Before LUTTIG and MICHAEL, Circuit Judges, and
Joseph Robert GOODWIN, United States District Judge
for the Southern District of West Virginia,
sitting by designation.
Vacated and remanded by unpublished per curiam opinion.
COUNSEL
ARGUED: William H. Moore, ITTIG & ITTIG, P.C., Washington,
D.C., for Appellant. Tamara Marie McNulty, VENABLE, BAETJER
& HOWARD, L.L.P., Vienna, Virginia, for Appellee.
2 DENNIS STUBBS PLUMBING v. TRAVELERS CASUALTY
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
The plaintiff in this matter, Dennis Stubbs Plumbing, Inc.
("Stubbs"), appeals from the dismissal of its claim below. The district
court concluded that Stubbs’ claim did not satisfy the amount-in-
controversy requirement of 28 U.S.C. § 1332, and dismissed Stubbs’
case without prejudice. Because we conclude that Stubbs may in fact
have claims exceeding the $75,000 amount-in-controversy require-
ment, we vacate the district court’s decision and remand for further
proceedings.
I.
This action arises out of a failed construction project. MDC Build-
ers, LLC ("MDC") was the prime contractor for a public construction
contract with the Northern Virginia Community College System
("NVCC"). NVCC contracted with MDC for the construction of a
new classroom building (the "Project"). In accordance with the
requirements of Virginia law, MDC, as principal, and Travelers Casu-
alty and Surety Company of America ("Travelers"), as surety, issued
a payment bond for the protection of those supplying labor and mate-
rials on the project.
MDC subcontracted with Stubbs to furnish all labor, materials,
equipment, supervision, and services for the plumbing work for the
subcontract price of $210,000 (the "Subcontract"). The Subcontract
contained what is generally referred to as a "no damages for delay"
clause. This clause provided, in relevant part:
EXTENSIONS OF TIME — If Subcontractor shall be
materially delayed by the wrongful act or omission of the
Contractor, the time for completion of the Work shall be
extended for a period equal to the reasonably estimated
DENNIS STUBBS PLUMBING v. TRAVELERS CASUALTY 3
period of delay as determined by Contractor. . . . The exten-
sion of time herein provided shall be Subcontractor’s sole
and exclusive remedy for any delay, and Subcontractor shall
have no claim for damages against Contractor by reason
thereof.
J.A. 32. The provision for delay reflected some prescience on the part
of the contracting parties, for numerous delays ensued in the course
of construction. Ultimately, MDC’s contract was default terminated
by Virginia for gross mismanagement of the Project.
Stubbs brought suit against Travelers in federal district court in an
effort to recover $153,064.83 in damages incurred in its performance
of the Subcontract. Stubbs itemized its damages as follows:
Item #1 Contract Balance & Retainage $14,910
Item #2 Additional & Extended Field $10,799.25
Supervision
Item #3 Additional Labor Costs Due to $88,799.29
Interferences, Poor Scheduling,
Acceleration & Disruptions
Item #4 Extended Home Office Overhead $38,556.29
S.J.A. 4-5 (hereinafter "Itemized Damages"). Travelers, Stubbs
alleged, was liable for these damages because it had failed to make
payment pursuant to the payment bond. Stubbs also alleged that the
district court had diversity jurisdiction over the action as the parties
were diverse and the amount in controversy exceeded $75,000.
Travelers filed a Motion for Partial Summary Judgment based upon
the "no damages for delay" clause. In response to that motion, Stubbs
introduced an affidavit by Dennis Stubbs, the president of Stubbs
Plumbing, which stated, among other things, that "MDC ordered
Stubbs to perform work in areas that were not ready for installation
of plumbing work," and that "Stubbs incurred additional costs and
damages as a direct result of MDC’s gross mismanagement of the
Project and its active interference with Stubbs’ work." J.A. 73.
4 DENNIS STUBBS PLUMBING v. TRAVELERS CASUALTY
The district court granted Travelers’ motion, holding that the "no
damages for delay" clause prohibited Stubbs from recovering dam-
ages due to delays, including those delays caused by MDC. The dis-
trict court construed Itemized Damages 2-4 as delay damages. Since
such damages were not recoverable under the contract, and since the
remaining amount in controversy was only $14,910 for "Contract Bal-
ance & Retainage," the district court concluded that it lacked subject
matter jurisdiction over the case and dismissed it without prejudice.
From that ruling, Stubbs appeals.
II.
We review the district court’s grant of summary judgment de novo.
See Bass v. E.I. DuPont de Nemours & Co., 324 F.3d 761, 766 (4th
Cir. 2003). In doing so, we view the facts proffered in the light most
favorable to the non-moving party — in this case Stubbs — and deter-
mine whether such proffer is sufficient to create a genuine issue of
material fact. See Fed. R. Civ. P. 56(c).
The issue presented is whether the "no damages for delay" clause
prohibits Stubbs from recovering the types of damages asserted in
Itemized Damages 2-4. Once again, the relevant language from the
Subcontract provides that "[t]he extension of time herein provided
shall be Subcontractor’s sole and exclusive remedy for any delay, and
Subcontractor shall have no claim for damages against Contractor by
reason thereof." J.A. 32. By stating that extension of time shall be the
sole and exclusive remedy "for any delay," the Subcontract makes
clear that delay damages resulting from a material delay by MDC are
not recoverable.
Stubbs claims, however, that the types of damages listed in Item-
ized Damages 2-4 are not delay damages. The Stubbs affidavit avers
that "Stubbs incurred additional costs and damages as a direct result
of MDC’s gross mismanagement of the Project and its active interfer-
ence with Stubbs’ work." J.A. 73. As stated in Stubbs’ brief, "Stubbs’
claims for damages include excess labor and material and supervision
costs relating to the increased difficulty of performing its work and
the additional time it took to complete." Appellant Br. at 6. The latter
type of damage — additional time necessary for completion — might
amount simply to delay damages, but the former type of damage —
DENNIS STUBBS PLUMBING v. TRAVELERS CASUALTY 5
increased difficulty in performing its work — is not itself necessarily
a request for damages resulting from delay. Claims of the former type
of damage, which can generally be referred to as claims of active
interference by MDC, seek recompense for increased costs imposed
by MDC’s wrongful acts. While some such costs may result from
delay, others may not (e.g., the costs associated with having to redo
a project because the plans initially provided were incorrect).
The distinction between delay damages and active interference
damages has long been recognized in the law. See American Bridge
Co. v. New York, 245 A.D. 535, 538-39 (N.Y. App. Div. 1935); id.at 540 (citing cases). While there is no authority from Virginia
directly on point, we think Virginia would recognize an independent
claim for damages resulting from active interference that were not
themselves delay damages. Virginia has recognized a difference
between mere delay and delay caused by active interference. See Al-
gernon Blair, Inc. v. Norfolk Redevelopment and Housing Authority,
108 S.E. 2d. 259, 263 (Va. 1959). The types of damages alleged by
Stubbs are merely another type of damages resulting from active
interference.
As damages for active interference or additional and extra work
caused by the wrongful acts of the contractor are not themselves delay
damages, they do not fall within the ambit of the "no damages for
delay" clause, which by its terms precludes only those damages that
result "from any delay."
The only remaining question then is whether Stubbs has proffered
sufficient evidence as to non-delay damages to overcome a motion for
summary judgment. Though the only evidence Stubbs proffered of
active interference was a somewhat self-serving and conclusory affi-
davit by Dennis Stubbs, that affidavit did include Mr. Stubbs’ asser-
tions that "MDC ordered Stubbs to perform work in areas that were
not ready for installation of plumbing work." J.A. 73. That allegation
is sufficiently particular (though barely so) to support an active inter-
ference claim given that similar circumstances historically have been
the gravamen of triable active interference claims. See American
Bridge Co., 245 A.D. at 538-39 (concluding that the state was liable
for the damages caused by its premature directing of its contractor to
begin work, despite the parties’ adoption of a general "no damages for
6 DENNIS STUBBS PLUMBING v. TRAVELERS CASUALTY
delay" agreement). Additionally, in its itemized list of damages,
Stubbs claims that it suffered $88,799.29 in damages from "Addi-
tional Labor Costs Due to Interferences, Poor Scheduling, Accelera-
tion & Disruptions." S.J.A. 4. While some of these categories might
encompass delay damages, others, like "Acceleration," clearly do not.
While Stubbs’ complaint and the affidavit are far from pellucid as
to the nature of damages incurred, we think it is clear that Stubbs
could possibly be claiming non-delay damages in excess of $75,000,
in which case it is entitled to have its case tried in federal court. If,
upon further proceedings, it becomes clear that Stubbs is not actually
claiming more than the requisite jurisdictional amount in non-delay
damages, then dismissal for lack of subject matter jurisdiction would
be appropriate at that time. But because, based on the record before
us now, Stubbs may well have claims for non-delay damages in
excess of $75,000, we vacate the district court’s dismissal and
remand.
VACATED AND REMANDED