United States District Court, E.D. Wisconsin
BELONGER CORPORATION, INC., and UNITED STATES OF AMERICA for the use and benefit of BELONGER CORPORATION, INC., Plaintiffs,
BW CONTRACTING SERVICES, INC., et al., Defendants.
DECISION AND ORDER
WILLIAM E. DUFFIN, U.S. Magistrate Judge
United States Department of Veterans Affairs hired BW
Contracting Services, Inc. to construct a medical center in
Milwaukee. (ECF No. 32, ¶ 1.) BW obtained a performance
bond and payment bond from Liberty Mutual Insurance Company.
(ECF Nos. 29, ¶ 3; 32, ¶ 2.) By way of two
subcontracts, BW hired Belonger Corporation, Inc. to perform
certain heating, ventilation, and air conditioning (HVAC),
plumbing, and medical gas work on the project. (ECF Nos. 29,
¶ 2; 32, ¶¶ 3-4.)
performed work under the subcontracts, and on February 29,
2016, it issued two invoices, one under each subcontract,
seeking payment. (ECF No. 29, ¶¶ 5, 12.) On each
invoice the “balance to finish” was
“$0.” (ECF No. 29, ¶¶ 7, 12 see
also ECF Nos. 21-1 at 3, 21-2 at 3.) These invoices were
neither paid nor approved by BW. (ECF No. 32, ¶ 14.)
14, 2016, BW learned that a plumbing line installed by
Belonger had become clogged by another subcontractor and
needed to be replaced. (ECF No. 29, ¶ 18.) That same day
Belonger's president sent an email to, among others,
Daniel Scharf, BW's project manager for the project,
Ed contacted me stating that at Sims lab there is another
back up in the sewer located in the 4” stack. My
understanding is the VA already cut open the pipe and at
first glance appears it is concrete/grout from other
contractor. We will make the repair and inform you of the
findings - however we need email acknowledgement that this
additional work is authorized and a change order will be
forthcoming between BW and Belonger.
(ECF No. 32, ¶ 15.) Scharf responded: “That is my
understanding as well. Yes, please proceed with repair work
on a T&M basis, and have your plumber get a sign-off from
Dan Nelson as we go. A change order will be issued to
compensate you for this time.” (ECF No. 32, ¶ 16.)
Belonger performed this work on May 19 and 20, 2016, and
charged $3, 708 for labor and $506.36 for materials. (ECF No.
29, ¶ 27.)
months later, on October 4, 2016, the Veterans Administration
issued a “Warranty and Installation Defect
Notification” to BW. (ECF No. 29, ¶ 45.) In it the
Veterans Administration reported that Belonger had
cross-connected the hot water and chilled water returns in
certain rooms, “contaminating the low temperature hot
water system with glycol and the chilled water system for the
entire hospital.” (ECF No. 29, ¶ 46.) On October
10 and 11, 2016, Belonger fixed the problem (ECF No. 29,
¶ 49) and did not charge BW for its work (ECF No. 29,
¶ 52). As a result of the defective cross-connection,
the Veterans Administration asserted a claim against BW of
$297, 286.40 for alleged damage to the building and its
mechanical systems resulting from glycol contamination. (ECF
No. 29, ¶ 51.)
February 13, 2017, Belonger submitted a “Notice of
Payment Bond Claim” to Liberty Mutual for payment under
the payment bond for work performed under the subcontract for
which it had not been paid. (ECF No. 29, ¶ 28.) On April
5, 2017, Belonger submitted a “Proof of Claim -
Construction Contract” to Liberty Mutual. (ECF No. 29,
filed this lawsuit against BW on May 19, 2017, alleging that
BW (and Liberty Mutual pursuant to the payment bond) owed it
$25, 059.56 for plumbing and $54, 177.50 for the HVAC work,
for a total of $79, 237.06. (ECF No. 1, ¶ 27.) Belonger
also seeks $7, 864.35 relating to unpaid change orders. (ECF
No. 1, ¶ 32.) Diversity of citizenship does not exist
under 18 U.S.C. § 1332. (ECF No. 1, ¶¶ 5, 6.)
Rather, this action is before the court pursuant to 18 U.S.C.
§ 1331 because, in addition to state law claims for
breach of contract and unjust enrichment, Belonger seeks
payment pursuant to a bond under the Miller Act, 40 U.S.C.
§ 3131, et seq.
defendants answered the complaint and alleged a counterclaim
regarding damages they suffered as a result of Belonger
having cross-connected the hot and chilled water returns.
(ECF No. 14 at 6-9.) On November 2, 2017, the defendants
moved for summary judgment on Belonger's claim under the
Miller Act. They argue the court should dismiss the Miller
Act claim and then decline to exercise supplemental
jurisdiction over the remaining state law claims,
see 28 U.S.C. § 1367(c)(3).
defendants argue that Belonger's claim under the Miller
Act is untimely because this action was not filed within one
year of Belonger's last work under the subcontracts.
See 40 U.S.C. § 3133(b)(4). According to the
defendants, Belonger's work under the subcontracts was
completed in February 2016. The work fixing the clogged pipe
was repair work and did not extend the Miller Act's
one-year statute of limitations. Therefore, the defendants
ask that the court dismiss the Miller Act claim, decline to
exercise supplemental jurisdiction over the remaining state
law claims, and dismiss the case with leave for Belonger to
file the action in state court.
contends that its work fixing the clogged pipe was
work under the subcontracts. As a ...