Page 1 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

p. 503.417.7777; f. 503.417.4250

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UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MEDFORD DIVISION 

THE UNITED STATES OF AMERICA FOR 

THE USE AND BENEFIT OF ASHLAND 

MEDFORD PLUMBING, INC., an Oregon 

corporation; and ASHLAND MEDFORD 

PLUMPING, INC., an Oregon Corporation, 

 Plaintiff, 

v. 

KEVCON, INC., a California corporation; 

and SAFECO INSURANCE COMPANY 

OF AMERICA, a Massachusetts 

corporation, 

 Defendant. 

CASE NO: 

COMPLAINT FOR: 

(1) RECOVERY ON MILLER ACT 

PAYMENT BOND; 

(2) BREACH OF CONTRACT; and 

(3) REASONABLE VALUE. 

DEMAND FOR JURY TRAIL 

GENERAL ALLEGATIONS 

1. This action is brought pursuant to, and jurisdiction is conferred by the contract 

between the parties, 40 U.S.C. §§ 3131-34 and 28 U.S.C. §§ 1331 and 1367(a). Also, this Cour t 

has subject matter jurisdiction over the m atter as the m atter in controversy exceeds $75,000.00 

and is between citizens of different states. 28 U.S.C. § 1332. 

2. Venue in this Court is proper as the subcontract, which forms the basis of this 

dispute, specifically identifies this Court as the proper Court for this dispute. 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 1 of 8
Page 2 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

p. 503.417.7777; f. 503.417.4250

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3. Plaintiff, Ashland Medford Plumbing, Inc. ("AMP") is, and at all relevant tim es 

was, a business entity duly organized and existing under and by virtue of the laws of the State of 

Oregon, and properly licensed to perform the work described below. 

4. AMP is informed and believes Defendant Kevcon, Inc. ("K evcon") is, and at all 

relevant times, was a corporation duly organized and existing under and by virtue of the laws of 

the State of California. 

5. AMP is informed and believes Defendant Safeco Insurance Company of America 

("Safeco") is, and at all relevant tim es was, a Massachusetts corporation authorized and/or 

licensed to do business and doing business in California as a surety issuing bonds pursuant to the 

Miller Act within the jurisdiction of this Court. 

6. Based on information and belief, on or before May 14, 2012, Kevcon entered into 

a written prim e contract agreem ent with the United States Government, by and through the 

Department of Veterans Affairs National Cem etery Administration (the "VA"), and logged as 

Contract No. VA 786-A-I2- C0002, to construct the work of improvement known as RAMB — 

Eagle Point National Cemetery located in Eagle Point, Oregon ("Project"). 

7. Pursuant to 40 U.S.C. §§ 3131-34, Kevcon, as principal, and Safeco, as surety, 

executed and delivered to the Un ited States Government a payment bond identified as Bond No. 

024042632 (the "Safeco Bond"), securing paym ent for labor and m aterials supplied to the 

Project. Pursuant to the Safeco Bond, Kevcon and Safeco are jointly and severally bound for the 

purpose of allowing a joint action against any or all of them under the Safeco Bond. 

8. On May 14, 2012, Kevcon entered into a written subcontract ("Subcontract") with 

AMP pursuant to which AMP agreed to furnis h plumbing labor, equipment and appurtenances 

per divisions 1, 22 and 23 as required per the c ontract documents, specifications, plans, and 

amendments. A true and correct copy of the Subcontract is attached as Exhibit "1" and 

incorporated by reference as though set forth in full at this point. Th e Subcontract price was 

$509,745.00 and later amended via change orders and increased to $543,440.40. 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 2 of 8
Page 3 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

p. 503.417.7777; f. 503.417.4250

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FIRST CLAIM FOR RELIEF 

(Recovery On Miller Act Payment Bond — Against Safeco & Kevcon) 

9. AMP realleges and incorporates by re ference paragraphs 1 through 8 above as 

though set forth in full at this point. 

10. The Safeco Bond inured to the benefit of AMP. 

11. AMP has fully performed all obligations required to be performed by it under the 

Subcontract and under the Safeco Bond, and all of the conditions p recedent to performance on 

the part of Safeco and Kevcon have either occurred or been excused. 

12. Safeco and Kevcon have failed and refuse d to perform their obligations under the 

Subcontract and under the Safeco Bond in that AMP ha s not been paid in full and is still owed at 

least $249,733.50 for the value of labor, services, m aterials, equipment and supplies furnished to 

the Project. 

13. In addition, Kevcon failed to, among other things: 

 (a) Provide AMP with site access when promised; 

 (b) Properly coordinate the execution of the work among AMP and others; 

 (c) Provide non-defective plans and specifications; 

 (d) Timely process and respond to AMP submittals; 

 (e) Timely process and respond to requests for information; 

 (f) Timely pay for work performed and invoiced by AMP; 

 (g) Timely process change orders; 

 (h) Adhere to the construction schedule of the Project; and 

 (i) Treat AMP fairly and equitably. 

14. The aforementioned failures and br eaches of contract by Kevcon caused 

numerous construction delays on the Project. 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 3 of 8
Page 4 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

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15. During the course of the Project, K evcon directed AMP to perform work at an 

inadequately prepared and maintained site, to suspend work, to perform out of sequence work, 

and to perform accelerated work. 

16. Kevcon also ordered AMP to perform extra work outside the scope of its 

Subcontract causing further delay. 

17. Based on inform ation and belief, AMP' s accepted bid for the Project 

contemplated a set duration. 

18. The aforementioned schedule im pacts by Kevcon caused AMP to rem ain on the 

Project for many days beyond the as planned schedule. 

19. As a result of these Kevcon caused dela ys, AMP incurred out-of-pocket costs for 

labor inefficiency costs, extra mobilization and demobilization costs, extended supervision costs, 

extended home and field office overhead and ge neral conditions, extended rental equipm ent 

charges, and extra material costs to protect work. 

20. These costs and expenses were incurred in AMP's prosecution of the work of the 

Project. 

21. AMP is entitled to payment of these costs under the Miller Act in an amount to be 

proven at trial. 

22. Kevcon and Safeco' s failure to tim ely pay AMP is in violation of the Federal 

Prompt Payment Act, 31 U.S.C. § 3905(b), entitli ng AMP to prompt payment penalty interest at 

the rates set forth in 31 U.S. C. § 3902(a). 

23. AMP last furnished labor, services, m aterials, equipment or supplies to the 

Project, within one year preceding the date this complaint was filed. 

24. A period of 90 days ha s now elapsed since AMP last furnished labor, services, 

materials, equipment or supplies for the Project. 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 4 of 8
Page 5 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

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25. As AMP had a direct contractual rela tionship with Kevcon by virtue of the 

Subcontract, AMP was not required to provide a 90-day no tice pursuant to 40 U.S.C. § 

3133(b)(1). 

26. As a result of Kevcon' s breaches of the Subcontract and Safeco Bond, AMP has 

been damaged in the amount of at least $249,733.50, together with interest at the maximum legal 

rates from dates according to proof. 

SECOND CLAIM FOR RELIEF 

(Breach Of Contract — Against Kevcon) 

27. AMP realleges and incorporates by re ference paragraphs 1 through 26 above as 

though set forth in full at this point. 

28. AMP has performed all conditions, covenants and promises required on its part to 

be performed in accord ance with the term s and conditions of the Su bcontract or has been 

excused from performance. 

29. Kevcon breached the Subcontract by, among other things: 

 (a) Failing to timely pay AMP in accordance with the Subcontract for the 

 labor, services, materials, equipment and supplies AMP furnished to 

 the Project; 

 (b) Failing to provide AMP with site access when promised; 

 (c) Failing to properly coordinate the execution of work among AMP and 

 others; 

 (d) Failing to timely and properly process and respond to AMP submittals; 

 (e) Failing to provide non-defective plans and specifications; 

 (f) Failing to timely and properly process and respond to requests for 

 inf ormation; 

 (g) Failing to timely process and approve change orders; 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 5 of 8
Page 6 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

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 (h) Adhere to the construction schedule of the Project; 

 (i) Failing to approve and pay for Kevcon directed changes to AMP's 

 subcontract scope of work; and 

 (j) Failing to act in good faith in its dealings with AMP. 

30. As a direct and proxim ate result of Kevcon's breaches of the Subcontract, AMP 

has been damaged in the amount of at least $249,733.50, together with interest at the m aximum 

legal rates from dates according to proof. 

THIRD CLAIM FOR RELIEF 

(Reasonable Value — Against Kevcon) 

31. AMP realleges and incorporates by re ference paragraphs 1 through 30 above as 

though set forth in full at this point. 

32. Within the last two years, AMP furnishe d labor, services and m aterials to the 

Project at the special request of Kevcon. AMP enriched and conferred benefits upon Kevcon by 

furnishing such labor, services and materials. AMP did not intend or e xpect to confer those 

benefits gratuitously and did not confer those benefits officiously. 

33. AMP has been im poverished by furnishing such labor, services and materials to 

the Project and by not being paid in full. 

34. Kevcon's unjust enrich ment and AMP' s impoverishment are connected because 

Kevcon engaged AMP to furnish labor, services and m aterials to the Project based on the 

Subcontract. 

35. Kevcon retained such labor, services and materials at AMP' s expense without 

justification. Because Kevcon requested AMP f urnish such labor, services and materials, the 

circumstances are such that it would be unjust not to pay AMP. 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 6 of 8
Page 7 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

p. 503.417.7777; f. 503.417.4250

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36. The total and reasonable value of the be nefits conferred by AMP to Kevcon is 

$249,733.50. Should the Court determ ine that AMP has no rem edy at law, equity should allow 

recovery for AMP's benefit. 

PRAYER FOR RELIEF 

WHEREFORE, AMP prays for judgment as follows: 

ON THE FIRST CLAIM FOR RELIEF (AGAINST KEVCON AND SAFECO): 

1. For general, special and consequential damages in the amount of at least $249,733.50 

and according to proof at trial; 

2. For a charge of interest at the m aximum rate allowed by 31 U.S.C. § 3902(a) on 

the amount due, until paid; and 

3. For reasonable attorneys' fees and costs as allowed by the Subcontract and Safeco 

Bond. 

ON THE SECOND CLAIM FOR RELIEF (AGAINST KEVCON): 

1. For general, special and consequential da mages in the approxim ate amount of at 

least $249,733.50 and according to proof at trial; and 

2. For reasonable attorneys' fees and costs as allowed by the Subcontract. 

ON THE THIRD CLAIM FOR RELIEF (AGAINST KEVCON): 

1. For the reasonable value of the benefits conf erred by A MP to Kevcon at its 

insistence, in the approximate amount of at least $249,733.50 and according to proof at trial. 

ON ALL CLAIMS FOR RELIEF: 

1. For interest at the maximum legal rates from dates according to proof; 

2. For costs of suit incurred herein; and 

3. For such other relief the Court deems just. 

DATED this 26th day of January, 2015. 

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 7 of 8
Page 8 - COMPLAINT

SLINDE NELSON LLC 

111 SW Fifth Avenue, Suite 1940 

Portland, Oregon 97204 

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SLINDE & NELSON LLC 

By: /s/ R. Hunter Bitner, II 

R. Hunter Bitner, II, OSB No. 011146 

Nicholas J. Slinde, OSB No. 003900 

Of Attorneys for Plaintiff

Case 1:15-cv-00132-MC Document 1 Filed 01/26/15 Page 8 of 8