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United States v. Team Construction, LLC

United States District Court, E.D. North Carolina, Western Division

September 21, 2017

THE UNITED STATES OF AMERICA, for the use of GRAYBAR ELECTRIC COMPANY, INC., Plaintiff,
v.
TEAM CONSTRUCTION, LLC, JARROD CLINE, individually and d/b/a CLINE ELECTRIC, and WESTERN SURETY COMPANY, Defendants.

          ORDER

          JAMES C. DEVER, III, Chief United States District Judge

         Defendants TEAM Construction, LLC ("TEAM') and Western Surety Company's ("Western") moved for partial summary judgment [D.E. 48], and plaintiff Jarrod Cline's ("Cline") moved to withdraw admissions under Rule 36(b) of the Federal Rules of Civil Procedure [D.E. 53]. As explained below, the court grants Cline's motion to withdraw his admissions and grants in part and denies in part TEAM and Western's motion for partial summary judgment.

         I.

         TEAM is a general contractor in Jacksonville, North Carolina. TEAM's Stmt. Material Facts [D.E. 50] ¶ 1; Cline's Stmt. Material Facts [D.E. 54] ¶ 1. The Department of the Navy contracted with TEAM to serve as the general contractor to perform renovations, construction, and improvements on a project. TEAM'S Stmt. Material Facts ¶¶ 5-6; Cline's Stmt. Material Facts ¶¶ 5-6. In turn, TEAM contracted with Jarrod Cline ("Cline") to act as a subcontractor for TEAM. TEAM'S Stmt. Material Facts ¶¶ 7-8; Cline's Stmt. Material Facts ¶¶ 7-8. Cline conducts business under the name of Cline Electric and provides electrical-related services as an electrical contractor. TEAM'S Stmt. Material Facts ¶¶ 3-4; Cline's Stmt. Material Facts ¶¶ 3-4. For the electrical supplies, TEAM and Cline contracted with Graybar Electric Company, Inc. ("Graybar"). Compl. [D.E. 1] ¶¶ 8, 10, 20; Cline's Ans. [D.E. 14] ¶¶ 8, 10, 20; TEAM'S Ans. [D.E. 16] ¶¶ 8, 10, 20. Western Surely Company ("Western") issued a bond ensuring payment by TEAM and its subcontractors of claims by persons furnishing labor and materials for the project. Compl. ¶ 7; Cline's Ans. ¶ 7; TEAM'S Ans. ¶ 7.

         On November 12, 2014, Graybar sued TEAM, Western, and Cline to recover money owed for electrical-related materials it provided for the project. See [D.E. 1]. TEAM answered the complaint and asserted crossclaims against Cline for breach of contract, fraud, breach of express warranty, breach of implied warranty, and contractual indemnification. See[D.E. 14] 12-26. Cline answered the complaint, [D .E. 12], answered TEAM's crossclaim, and asserted his own crossclaims against TEAM for breach of contract, fraud, and quantum meruit and against both TEAM and Western for violations of the Miller Act. See [D.E. 16].

         On August 28, 2015, Graybar, TEAM, and Western jointly moved to dismiss Graybar's claims against TEAM, Western, and Cline [D.E. 27]. On September 3, 2015, the court granted the motion, leaving just TEAM'S and Cline's crossclaims. See [D.E. 29].

         On March 31, 2015, the court entered a scheduling order requiring the parties to complete discovery by December 30, 2015, and file dispositive motions by January 29, 2016 [D.E. 21]. On July 21, 2015, Cline's attorney moved to withdraw [D.E. 24]. On August 24, 2015, the court granted the motion [D.E. 26]. In the order, the court stated:

All pleadings and correspondence for Defendant Jarrod Cline, individually and d/b/a Cline Electric shall be addressed as 214 Cedar Lane, Newport, NC 28570, unless another address is provided by Defendant Jarrod Cline, individually and d/b/a Cline Electric.

Id at 2.

         On November 25, 2015-with a little more than a month remaining in the discovery period-TEAM served interrogatories and requests for production of documents on Cline at the address listed in the court's order. See 2d Stanfield Aff. [D.E. 55-1] ¶ 3. On November 30, 2015, TEAM served request for admissions on Cline at the address listed in the court's order. See id.; TEAM'S Reqs. for Admis. [D.E. 51-2]. The request for admissions stated, in part, "The Admissions are to be fully answered, under oath, in writing within thirty (30) days afer service in accordance with Rules 26 and 36 of the Federal Rules of Civil Procedure." TEAM'S Reqs. for Admis. at 2.

         On December 8, 2015, TEAM'S attorney received a voicemail from Jeffrey S. Jonap, an attorney who said Cline had contacted him and that he intended to represent Cline in this action. 2d Stanfield Aff. ¶ 4. Although TEAM does not elaborate on the voicemail, TEAM does say that Jonap did not inquire about any written discovery requests sent to Cline. Id.

         On December 30, 2015, TEAM'S counsel and Jonap-who had not yet filed a notice of appearance as Cline's attorney-discussed changes to a consent order. See Id. ¶ 6. Among the changes, Jonap inserted an address for Cline in Kentucky. IcL Upon seeing the change, TEAM'S counsel called Jonap and informed him that Cline's address of record with the court listed a mailing address in Newport, North Carolina. Id. TEAM'S counsel also told Jonap that the court's earlier order required all filings to be served on Cline at the Newport, North Carolina address. Id. Neither Cline nor Jonap contacted the court to change Cline's address. Id. Moreover, TEAM'S attorney did not mention that TEAM had sent discovery requests to Cline's North Carolina address.

         Cline did not timely respond to the interrogatories, requests for documents, or the request for admissions. TEAM never moved to compel responses. On January 29, 2016, TEAM and Western moved for partial summary judgment based largely on the facts deemed admitted due to Cline's failure to respond to the request for admissions. See [D.E. 37].

         On April 27, 2016, the parties attended a court-ordered mediation. See Stanfield Aff. ¶ 9. Jonap and another attorney, neither of whom had filed a notice of appearance, accompanied Cline and presented his case. Id. The attorneys did not discuss any outstanding discovery requests. See id On May 9, 2016, the court docketed a letter from Jonap dated May 5, 2016, "to serve as an address change" for Cline. [D.E. 42]. The letter changed Cline's address to one in Kentucky. Id.

         On June 2, 2016, attorney Davies filed a notice of appearance for Cline [D.E. 43], That same day, Cline (through Davies) moved for leave to file an opposition to TEAM and Western's motion for summary judgment and to withdraw Cline's deemed admissions under Federal Rule of Civil Procedure 36(b) [D.E. 44]. TEAM had sent the summary-judgment motion to Cline's North Carolina address, as required by the court's earlier order, but Cline had moved and not updated his address with the court. See Id. ¶ 4. Although other items sent from TEAM to Cline had been forwarded to Cline's new address, the summary-judgment motion and request for admissions were not. See Id. ¶ 5. Cline was unaware of the existence of the summary-judgment motion and request for admissions until approximately May 12, 2016. See Id. ¶¶ 5, 7.[1] TEAM and Western would not consent to Cline filing a response to the motion. See Id. ¶ 6. Cline requested leave to file a response to the summary-judgment motion and for 14 days within which to respond to the request for admissions. See id. ¶¶ 6-7.

         On September 20, 2016, the court dismissed TEAM and Western's motion for summary judgment without prejudice for failure to conform with Local Civil Rule 56.1 [D.E. 47]. The court denied as moot Cline's motion for leave to file a response in opposition, but did not separately address his request to withdraw his admissions. Id.

         On October 3, 2016, TEAM and Western refiled their motion for summary judgment [D.E. 48], along with a supporting memorandum [D.E. 49], a statement of material facts [D.E. 50], and an appendix [D.E. 51]. On October 27, 2016, Cline moved under Rule 36(b) to withdraw his admissions [D.E. 53]. Cline asks the court to allow him withdraw his admissions and to give him 14 days to respond to TEAM'S request for admissions. Cline's motion also responds in opposition to TEAM and Western's summary-judgment motion. See id.

         II.

         Because Cline's admissions feature prominently in TEAM and Western's summary-judgment motion, the court first considers Cline's motion to withdraw his admissions. When a party receives a request for admissions, a matter is admitted "unless, within 30 days after being served, " that party "serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney." Fed.R.Civ.P. 36(a)(3). "The purpose of such admissions is to narrow the array of issues before the court, and thus expedite both the discovery process and the resolution of the litigation." Adventis. Inc. v. Consol. Prop. Holdings. Inc., 124 Fed.Appx. 169, 172 (4th Cir. 2005) (unpublished).

         Once admitted under Rule 36(a), the matter "is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended" under Rule 36(b). Fed.R.Civ.P. 3 6(b). Rule 3 6(b) contains a two-part test concerning the withdrawal or amendment of an admission. It states:

[T]he court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in ...

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