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KO Pipeline, LLC v. Moorhead Brothers, Inc.

United States District Court, S.D. Ohio, Eastern Division

May 10, 2018

KO PIPELINE, LLC, Plaintiff,

          Deavers Judge.



         This matter is before the Court upon Plaintiff KO Pipeline, LLC's Motion for Summary Judgment (“KO's Motion”) (Doc. 13). The Motion is fully briefed and ripe for disposition. For the following reasons, KO's Motion is DENIED.

         I. BACKGROUND

         Defendant Moorhead Brothers, Inc., a South Carolina corporation, was the general contractor on a project based in Belmont, Ohio known as the Clark 12” LP Gas Project (the “Project”). (Doc. 1, Compl. ¶ 6-7). Plaintiff KO Pipeline, LLC, organized under the laws of Ohio, performed pipeline construction services for Moorhead on the Project pursuant to a Subcontract. (Id.; Doc. 1-1, Subcontract). As provided by the Subcontract, Moorhead retained 10% of all payment requests by KO until the work was 100% complete. (Doc. 1-1, § 3.1(C)). It is undisputed that KO and its subcontractors completed the substantive pipeline work contemplated by the Subcontract no later than September 26, 2015. (Doc. 13-2, Moorhead's Resp. to Req. for Admission No. 4). At that point, the final 10% retainage amount was $86, 593.50. (Id., Admission No. 10).

         The Subcontract required KO to provide lien waivers for each of the subcontractors hired by KO. (Doc. 1-1, § 3.1(C)). Moorhead was also permitted to withhold from Subcontract payments an amount necessary to protect Moorhead from “any claim or lien against [Moorhead] or the premises arising out of [KO's] performance of this Subcontract” asserted by other parties “until the situation has been satisfactorily remedied or adjusted by [KO] to the sole acceptance of [Moorhead].” (Id., § 3.1(B)). Of the subcontractors that KO hired to work on the Project, KO was able to obtain lien waivers for all but two: B&N Construction, Inc. and 7K Construction, Inc. (Doc. 13-1, Ozalas Aff. ¶ 5).

         B&N and 7K contended they had supplied additional services on the Project for which they had not been paid. (Id.). After discussing the situation with Moorhead, KO provided documentation to B&N and 7K that allegedly demonstrated that any amounts owing to B&N and 7K were more than offset by amounts that B&N and 7K owed to KO. (Id.). However, KO did not provide the Court with the documentation provided to B&N and 7K, nor does KO specify whether the amounts B&N and 7K owed KO were related to the Project, or even the amount that B&N and 7K claimed remained outstanding from the Project. B&N and 7K continued to refuse to provide lien waivers for the Project. (Id. ¶ 6).

         In December 2015, KO and Moorhead exchanged a string of emails regarding release by Moorhead to KO of certain funds related to the Project. (Doc. 13-1, Emails, PAGEID #51-55). On December 11, 2015, Moorhead's representative stated, “once I receive all the final lien waivers from the list below (with the exception of B&N and 7K) completely filled out I will be able to release payment to you.” (Id., PAGEID #53). On December 12, 2015 (a Saturday), another representative of Moorhead stated, “[t]he wire paperwork was turned in and wire will go out Monday.” (Id., PAGEID #51). However, the parties are now in agreement that Moorhead continues to withhold $86, 593.50 in retainage. (Doc. 13-2, Admission No. 10). It is not clear from the record whether the wire transfer did not proceed on Monday, December 14, 2015, as anticipated, or whether this email string was in fact referring to the release of funds other than the 10% retainage amount.

         On December 15, 2015, MarkWest, the owner of the Project, paid Moorhead its final retainage payment. (Doc. 13-1, MarkWest Payment Remittance Advice, PAGEID #50). Although not in the record, Moorhead apparently sent a letter to KO on January 19, 2016, suggesting that the only reason Moorhead had not released the retainage was that KO had not been able to provide a lien waiver for B&N Construction, with whom KO may have a dispute. (Doc. 13-2, Letter from KO's counsel, PAGEID #70). KO made a demand through its counsel for payment of the retainage on June 8, 2016, in which it noted that the time for any subcontractor to file a lien on the Project had expired, and that therefore “B&N Construction no longer has any conceivable claim against the owner (or Moorhead with whom it had no contract).” (Id.).

         Moorhead did not release the retainage funds, and KO commenced this action on October 10, 2016, in order to recover the $86, 593.50 withheld from the subcontract payments, as well as interest under Ohio's Prompt Payment Act, R.C. § 4113.61, and attorney's fees and costs. KO now moves for summary judgment on its contract and Prompt Payment Act claims.


         KO moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Berryman v. SuperValu Holdings, Inc., 669 F.3d 714, 716-17 (6th Cir. 2012). The Court's purpose in considering a summary judgment motion is not “to weigh the evidence and determine the truth of the matter” but to “determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). A genuine issue for trial exists if the Court finds a jury could return a verdict, based on “sufficient evidence, ” in favor of the nonmoving party; evidence that is “merely colorable” or “not significantly probative, ” however, is not enough to defeat summary judgment. Id. at 249-50.

         The party seeking summary judgment shoulders the initial burden of presenting the Court with law and argument in support of its motion as well as identifying the relevant portions of “‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.R.Civ.P. 56). If this initial burden is satisfied, the burden then shifts to the nonmoving party to set forth specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(e); see also Cox v. Kentucky Dep't of Transp., 53 F.3d 146, 150 (6th Cir. 1995) (after burden shifts, nonmovant must “produce evidence that results in a conflict of material fact to be resolved by a jury”).

         In considering the factual allegations and evidence presented in a motion for summary judgment, the Court “views factual evidence in the light most favorable to the non-moving party and draws all reasonable inferences in that party's favor.” Barrett v. Whirlpool Corp., 556 F.3d 502, 511 (6th Cir. 2009). But self-serving affidavits alone are not enough to create an issue of fact sufficient to survive summary judgment. Johnson v. Washington Cty. Career Ctr., 982 F.Supp.2d 779, 788 (S.D. Ohio 2013) (Marbley, J.). “The mere existence of a scintilla of evidence to support [the non-moving party's] position will be insufficient; there must ...

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