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R&O Construction Co. v. MBA General Contracting, LLC

United States District Court, D. Utah

March 21, 2019

R&O CONSTRUCTION COMPANY, Plaintiff,
v.
MBA GENERAL CONTRACTING, LLC and CORY MARTIN, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS ATTORNEY FEE CLAIM AND GRANTING REQUEST FOR AN ENLARGEMENT OF TIME TO FILE ANSWER

          Jill N. Parrish, United States District Court Judge.

         Before the court is a motion brought by defendants MBA General Contracting, LLC and Cory Martin (collectively, MBA) to dismiss plaintiff R&O Construction Company's (R &O 's) fourth cause of action for an award of attorney fees. [Docket 8]. The court GRANTS the motion and dismisses the fourth cause of action with prejudice.

         BACKGROUND

         R&O, a general contractor, entered into a construction contract with Utah State University Research Foundation. Under the construction contract, R&O agreed to act as the general contractor for a construction project on Utah State University's campus in Logan, Utah.

         R&O entered into two contracts with a subcontractor, MBA. The first was entitled the Master Subcontract Agreement (Master Agreement), which outlined the general duties and obligations between the parties. The second was entitled the Work Authorization Document, which delineated the specific duties and obligations of the parties related to the Utah State University project. Under the Work Authorization Document, MBA agreed to perform concrete work as a subcontractor for the construction project.

         R&O alleges that MBA breached the contracts by failing to meet required quality standards and by failing to complete the work on time. As a result of the alleged failures to perform under the contracts, R&O gave MBA a notice to cure the deficiencies. R&O alleges that M B A's response did not adequately address its demands. As a result, R&O withheld payments. M B A then notified R&O that it would cease work on the construction project until payments were made in full. R&O hired replacement subcontractors to complete the work.

         R&O sued MBA. In its complaint, R&O asserts various causes of action arising from MBA's alleged failure to perform under the contracts. R &O 's fourth cause of action is for an award of attorney f ees allegedly provided for under t h e M as t er A gr eem en t . M BA filed a motion to dismiss the attorney fee claim, arguing that the Master Agreement does not permit an attorney fee award under the facts of this case.

         LEGAL STANDARD

         Dismissal of a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure is appropriate where the plaintiff fails to state a claim upon which relief can be granted. In this case, MBA argues that R&O cannot state a contractual claim for attorney fees because the language of the Master Agreement does allow for an award of fees. The Master Agreement provides that it shall be interpreted under the laws of the State of Utah. Because the interpretation of this contract does not involve extrinsic evidence, it is a legal question for the court. See Peterson v. Sunrider Corp., 48 P.3d 918, 924 (Utah 2002).

         ANALYSIS

         R&O argues that two separate provisions of the Master Agreement permit an award of attorney fees in its favor: (1) the indemnification provision (Section 3.D) and (2) the failure-to-perform provision (Section 2.E). The court addresses each of these provisions in turn.

         I.THE INDEMNIFICATION PROVISION

         The Master Agreement contains an indemnification provision, which states:

Indemnification. . . . To the fullest extent permitted by law, Subcontractor [MBA] shall indemnify, defend and hold harmless Contractor [R&O] and Owner, and their agents and employees against any and all claims, demands, damages, liabilities, expenses and reasonable attorney fees incurred by Contractor and/or Owner and arising out of or in any way related to the performance of ...

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