Court Opinion

ID: 9498655
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:24:07.548866+00
Date Added: 2024-06-11T17:58:59.018961
License: Public Domain

GRIFFIN, Circuit Judge,
concurring in part and dissenting in part.
I concur in the result of the majority opinion, which reverses in part the grant of summary judgment in favor of defendant Safeco Insurance Company (“Safe-co”). I write separately to express my differences with both the remedy and portions of the majority’s analysis.
I.
At the outset, I am not persuaded that Kentucky common law recognizes “delay and impact” claims as a separate form of contract recovery. To resolve this issue, I would not use Miller Act cases in my analysis. (Opinion at 668 n. 3.) Given that the Miller Act provides a federal cause of action,1 see United States v. Fidelity & Deposit Co. of Md., 813 F.2d 697, 700 (5th *674Cir.1987) (“The Miller Act provides a federal cause of action, and the extent of the limitation period must be determined in accordance with federal law.” (citation omitted)), I would decline to apply the logic of the Miller Act in the context of a private common law payment bond, e.g., Mai Steel Serv., Inc. v. Blake Const. Co., 981 F.2d 414, 420 (9th Cir.1992) (“Claims arising under its common law payment bond are therefore governed by state, rather than federal, law.” (citation omitted)); United States ex rel. Doten’s Const., Inc. v. JMG Excavating & Constr. Co., 223 F.R.D. 17, 18 (D.Me.2004) (dismissing claim for lack of federal question jurisdiction because bond under which litigant sought recovery was a common law bond rather than a Miller Act bond). On this point, although Safeco dedicates several pages to a detailed discussion of Miller Act caselaw, it nonetheless agrees that Miller Act cases are of limited value. Accordingly, I would not rely on Miller Act cases in the context of a private common law payment bond.
More pointedly, although the parties submitted a variety of documents reflecting the parties’ and district court’s considerable discussion of delay and impact claims, the issue appears illusory. The cases cited by the parties and the majority do not demonstrate that “delay and impact damages” arise from a pre-existing legal construct. Instead, they are but words utilized by Lexicon to describe the alleged damages that arose from Project delays. The district court’s opinion tacitly acknowledges this reality in its opinion when, after reviewing the varied cases supplied by the parties, it merely surmises that “recovering delay or acceleration damages under a payment bond turns on the language of the bond and the nature of the recovery sought.”
The majority also appears to acknowledge that delay and impact claims are not a separate form of contractual recovery. Indeed, the majority notes that Lexicon seeks recovery of “self-styled” delay and impact claims, (Opinion at 1), then concedes that the term “delay and impact” “does not appear to be a term of common usage,” (Opinion at 8). Thus, I would conclude that there is no need to separately examine whether Kentucky common law provides for the recovery of “delay and impact” damages. Instead, I would simply analyze the issue as one of ordinary contract interpretation: whether Lexicon’s March 8, 2002, claims for payment are encompassed by the language of the Bond.
Moreover, I respectfully disagree with the majority’s statement that “[w]e are sympathetic with the district court’s apparent frustration” that Lexicon is “reluctant to spell out exactly what monies it claims are still due for labor and material costs under the bond.” (Opinion at 6.) The record evidence wholly contradicts that statement.2 Indeed, the record reflects that Lexicon submitted a written *675claim on January 18, 2002, pursuant to the Subcontract’s claim procedure, advising Icon of the problems caused by project delays and seeking an equitable adjustment to the contract. Lexicon followed up on March 8, 2002, by providing Icon with a more detailed explanation of the “actual man-hours and cost[s] expended” as a result of the Project delays. In pertinent part, the March 8 report detailed Lexicon’s claims for “delay and impact” costs, which Lexicon defined as “extra out-of-pocket costs for labor and material expended in completing the work in the Subcontract, caused by inefficiencies, hindrances, and related impacts.” Lexicon later submitted a more detailed analysis, which further analyzed the delay costs attributable to extra man-hours, equipment costs, and overhead.
It is undisputed that Safeco received these materials. Icon forwarded Lexicon’s detailed March 8, 2002, report to Safeco for its review on April 10, 2002. Icon even marked up the $2,962,274 damages sum detailed in the March 8 analysis when it “passed through” Lexicon’s claim and presented it against SMS during its arbitration with SMS. Moreover, it is further undisputed that the district court possessed these materials when ruling on Safeco’s summary judgment motion. Accordingly, I conclude that the district court had sufficient evidence regarding Lexicon’s delay and impact claims. Again, however, the question is whether that evidence demonstrates that Lexicon’s March 8 analysis sets forth recoverable sums pursuant to the Bond. Because a genuine issue of material fact exists on this question, I would remand for trial.
II.
I also respectfully disagree with the majority’s analysis of the parties’ Settlement Agreement. First, I note that the majority declines to address Lexicon’s argument that whether the Settlement prevented it from pursuing its delay claims was not an issue that was properly preserved.3 Significantly, Safeco, in proffering its motion for summary judgment, did not argue that the language of the parties’ Settlement barred Lexicon from pursuing its delay claims against Safeco. Instead, a review of the “argument” section of Safeco’s summary judgment brief reveals that it primarily argued that delay and impact claims are not covered by the language of the Bond. Nowhere, however, did Safeco assert that the Settlement prohibits Lexicon’s delay claims. To the contrary, Safe-co spent a full paragraph explaining that such claims are all that remain after the parties’ Settlement. Only after Lexicon filed its response did Safeco argue, in its reply brief, that the terms of the Settlement preclude Lexicon from asserting delay claims against Safeco. In doing so, it *676termed Lexicon’s characterization of its claims as “contract-based” and argued that, if indeed the claims are based on the parties Subcontract, then such claims were resolved by the Settlement. Given that “[i]t is impermissible to mention an issue for the first time in a reply brief because the appellee then has no opportunity to respond,” United States v. Jerkins, 871 F.2d 598, 602 (6th Cir.1989) (internal citation and quotation marks omitted), I would not address the issue because it was not properly preserved.
Second, I respectfully disagree with the majority’s analysis governing who drafted the parties’ Settlement Agreement.4 As discussed above, the import of who drafted the Settlement Agreement is insignificant because the issue was not properly before the district court. Even if it were properly raised and preserved for appellate review, I would decline to reach the issue because it does not impact the fundamental inquiry necessary for resolution in this case: whether Lexicon’s March 8, 2002, claims for payment are encompassed by the language of the Bond.
III.
Finally, I am concerned that the majority fails to mention or discuss the existence of two significant issues of material fact: (1) the date upon which Lexicon reached substantial completion of its role in the Project; and (2) whether Lexicon complied with the notice provision of the Bond.
On these points, I note that the Subcontract provides a contractual completion date of March 23, 2001, but likewise provides a mechanism by which the parties could alter the completion date. For example, the Subcontract provides that “[t]he time for performing the Work is established by the requirements and milestone dates set out in the Master Project Schedule with mutually agreed durations.” The district court made no finding with regard to (1) whether the parties’ “mutually agreed durations” altered Lexicon’s time for substantial completion, or (2) when Lexicon actually completed its work on the project. Significantly, the parties dispute when Lexicon fulfilled its obligations pursuant to the Subcontract. Thus, the existence of these material fact issues prevents us from determining when Lexicon was obligated to provide the notice required by the Bond.5
For the foregoing reasons, I would reverse the district court’s entry of summary judgment because of its failure to first rule on Lexicon’s motion to strike Safeco’s privilege log before resolving the parties’ summary judgment motions. See Brainard v. Am. Skandia Life Assurance Corp., 432 F.3d 655, 667 (6th Cir.2005) (“Generally, a district court should dispose of motions *677that affect the record on summary judgment before ruling on the parties’ summary judgment motions.” (citation omitted)). I would likewise reverse the district court’s entry of summary judgment and remand for trial because genuine issues of material fact remain concerning: (1) the date upon which Lexicon reached substantial completion of its role in the Project; (2)whether Lexicon complied with the notice provision of the Bond; and (3) if so, whether the Bond would allow Lexicon to recover the sums detailed by Lexicon’s March 8, 2002, report.

. Notably, Lexicon did not seek to invoke the district court’s federal question jurisdiction. Instead, Lexicon commenced this litigation pursuant to 28 U.S.C. § 1332.

. This statement likewise appears to be contradicted by a later portion of the majority’s opinion itself. Specifically, the majority later notes:
If the court’s opinion intended to grant summary judgment to Safeco on the grounds that there was no evidence that Lexicon was making a claim for labor and materials under the bond, it is reversed. Lexicon points to several documents in the record including letters sent to Icon on March 8, 2002, which provided a breakdown of the then-disputed costs and extras; an exhibit Icon submitted in the SMS-NAS separate arbitration detailing Lexicon’s claims against it; and the affidavit of Lexicon's project manager.
(Opinion at 671-673.) Crediting Lexicon for submitting a “detailed” breakdown of costs and extras does not appear consistent with the majority's previous statement that Lexicon is "reluctant to spell out exactly what monies it claims are still due for labor and material costs under the bond.” Id. at 10.

. The majority instead notes that, because we review the grant of summary judgment de novo, "any error by the district court in granting Safeco’s summary judgment without giving Lexicon an opportunity to respond to Safeco's arguments is harmless." (Opinion at 675.) The error, however, is hardly harmless given that it provided the district court with a ground upon which to grant summary judgment. More importantly, the issue is not one of harmless error, but rather one of preservation. Assuming a district court properly declines to consider an issue raised for the first time in a reply brief, e.g., Sundberg v. Keller Ladder, 189 F.Supp.2d 671, 682-83 (E.D.Mich.2002) (noting, in the context of summary judgment, “it is not the office of a reply brief to raise issues for the first time” (citation omitted)), that issue remains unpreserved for appellate review, cf. Novosteel SA v. United States, 284 F.3d 1261, 1273-74 (Fed.Cir.2002) (holding that raising an issue for the first time in summary judgment reply brief does not suffice to preserve issue for appellate review). A de novo standard of review does not excuse a party’s obligation to fairly present each of its issues at every stage in the proceedings.

. Also, I do not understand what significance the Settlement Agreement has on the wholly separate question of whether the court improperly ruled on the parties’ summary judgment motions without first ruling on Lexicon’s pending motion to strike Safe-co's privilege log. Although I agree with the majority’s statement of the basic rule that a district court should not consider the parties' summary judgment motions before ruling on any pending discovery motions, I do not agree with the majority's subsequent suggestion that such a rule is somehow altered in this case "[i]f the settlement issue is not dis-positive of the case[.]” (Opinion at 673.) Such a statement is particularly confusing given that the majority appears to recognize that the Settlement Agreement preserved Lexicon's delay and impact claims. (Opinion at 671.)

. The Bond requires a claimant to provide notice of non-payment "within ninety (90) days after such claimant did or performed the last of the work or labor, or furnished the last of the materials for which said claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the materials were furnished, or for whom the work or labor was done or performed.”