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Bowen Engineering, Corp. v. Pacific Indemnity Co.

United States District Court, D. Kansas

January 6, 2015

Bowen Engineering, Corporation, Plaintiff,
v.
Pacific Indemnity Co., and Scott Process Systems, Inc., Defendants

Decided: January 5, 2015.

For Bowen Engineering Corporation, an Indiana corporation, Plaintiff: Catherine R. Bell, G. Edgar James, Jeffrey D. Kleysteuber, LEAD ATTORNEYS, Kansas City, MO; Jean G. Wine, Joel J. Rhiner, LEAD ATTORNEYS, PRO HAC VICE, Stein Ray LLP, Chicago, IL.

For Pacific Indemnity Co., an Insurance company, Defendant, Cross Claimant: Jeremy P. Brummond, LEAD ATTORNEY, PRO HAC VICE, Lewis, Rice & Fingersh, LC - St. Louis, St. Louis, MO; Scott A. Wissel, LEAD ATTORNEY, Lewis, Rice & Fingersh, LC - Kansas City, Kansas City, MO.

For Scott Process Systems, Inc., an Ohio corporation, Defendant, Cross Claimant: Jeremy P. Brummond, LEAD ATTORNEY, PRO HAC VICE, Lewis, Rice & Fingersh, LC - St. Louis, St. Louis, MO; Joseph J. Trad, LEAD ATTORNEY, PRO HAC VICE, Lewis, Rice & Fingersh, LC - MO, St. Louis, MO; Scott A. Wissel, LEAD ATTORNEY, Lewis, Rice & Fingersh, LC - Kansas City, Kansas City, MO.

MEMORANDUM AND ORDER

J. THOMAS MARTEN, JUDGE.

This is a dispute involving a biofuels construction project located in Kansas, owned or operated by two entities, Abengoa Bioenergy Biomass of Kansas, and Abener Teyma Hugoton GP. Plaintiff Bowen Engineering, an Indiana corporation, brought the original breach of contract and unjust enrichment action against defendant Walters Metal Fabrication, an Illinois corporation, seeking sums due in exchange for Bowen's work. It also sued defendants Pacific Indemnity Company and Scott Process Systems, Inc., based on lien surety bonds issued in connection with the project. (Dkt. 1-1). Pacific and Scott removed the action to this court.

Following the removal, Bowen settled its claim against Walters, which was dismissed from the action. In the settlement, Walters agreed to execute a confession of judgment in the amount of $718,781.92. Further, in addition to a direct payment of $200,000 to Bowen, Walters assigned to Bowen its claims against Scott and Pacific.

Bowen's First Amended Complaint, filed December 9, 2014, advances claims of breach of contract and unjust enrichment against Scott for failing to pay Walters. Bowen also seeks to foreclose on the mechanics lien it filed against the project under K.S.A. 60-1101.

This matter is before the court on the Motion for Judgment on the Pleadings under Fed.R.Civ.Pr. 12(c), as well as a Motion to Transfer Case, both filed by defendants Pacific and Scott.[1] In the former, the defendants argue that Bowen is not entitled to proceed against the bond filed in Stevens County, Kansas. In the latter, the defendants argue that the case should be transferred to a United States District Court in Missouri[2] in light of the forum selection clause in the underlying Assembly Services Agreement (ASA) between Bowen and Walters. The defendants also note the Supreme Court's recent decision in Atlantic Marine Construction Co., v. United States Dist. Ct., 134 S.Ct. 568, 187 L.Ed.2d 487 (2013), which altered the rules relating to transfers under 28 U.S.C. § 1404(a), including its determination that a plaintiff's choice of forum is entitled to no weight when it contravenes an otherwise applicable forum selection clause.

The Amended Complaint filed by Bowen on December 9, 2014, alters the relationship among the parties by removing Walters and adding contract claims agains the defendants,[3] but does not alter the two essential questions presented to the court -- whether Bowen is close enough to the project to invoke the lien provision in the state construction fairness act, and, if so, if this requires vitiating the agreement to litigate all disputes in Missouri. The court finds that the answers to both questions is no.

Motion for Judgment on the Pleadings

The defendants' Motion to Dismiss is grounded on the limitation on potential claimants to a statutory bond under Kansas law. Such claimants may proceed against the bond only if the claimant could have enforced and perfected a lien. K.S.A. 60-1103(a) provides:

Any supplier, subcontractor or other person furnishing labor, equipment, material or supplies, used or consumed at the site of the property subject to the lien, under an agreement with the contractor, subcontractor or owner contractor may obtain a lien for the amount due in the same manner and to the same extent as the original contractor....

(Emphasis added.) The statute does not apply to remote suppliers, such as those that supply labor or materials to sub-subcontractors. See Wichita Steel Metal Supply Inc. v. Dahlstrom and Ferrell Construction, 246 Kan. 557, 792 P.2d 1043, 1048 (Kan. 1990); J.W. Thompson Co. v. Welles Products, 243 Kan. 503, 758 P.2d 738, Syl. ¶ ¶ 2-4 (Kan. 1988); BRB Contractors v. Akkerman Equipment, 935 F.Supp. ...


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