Cubilete v. United States

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

BRYANT CUBILETE,

Plaintiff, MEMORANDUM & ORDER

18-cv-6431 (NGG) (SJB)

-against-

THE UNITED STATES OF AMERICA, and GMD

SHIPYARD CORP.,

Defendants.

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Bryant Cubilete brings this personal injury action against

Defendants GMD Shipyard Corp. (“GMD”) and the United States

based on injuries he suffered when he fell at a work site at the

Brooklyn Navy Yard. (See Second Am. Compl. (“SAC”) (Dkt.

14).) Currently before the court is the United States’s motion to

dismiss GMD’s crossclaims pursuant to Federal Rules of Civil Pro-

cedure 12(b)(1) and 12(c). (See Mot. to Dismiss (“Mot.”) (Dkt.

24).) For the following reasons, the United States’s motion is

GRANTED.

BACKGROUND

Cubilete alleges that he was injured when he fell at a work site

at the Brooklyn Navy Yard. (SAC ¶ 12.) At the time, Cubilete was

engaged by his employer, Jen-Mar Electric Service Corp., to per-

form construction work on a vessel owned by the United States

Army. (Id. ¶¶ 4, 8, 11.) Though the vessel—U.S. Army BD-

6801—was owned by the Army, the United States had awarded

a contract to Defendant GMD to perform maintenance work on

it in February 2016. (GMD Contract Cover (Dkt. 24-1).) On July

19, 2017, Cubilete was engaged in repair work aboard the vessel.

(SAC ¶ 11.) While he was working, Cubilete stepped on an unse-

cured piece of plywood which gave way and caused him to fall

through an opening in the floor. (Id. ¶ 14). Cubilete plummeted

approximately twelve to fifteen feet and suffered various injuries

as a result. (Id. ¶ 14, 16.) He claims his injuries were caused by

negligence on the part of the United States and GMD and that

both Defendants violated §§ 200, 240(1), and 241(6) of the New

York Labor Law. (See id. ¶¶ 15, 22.)

Cubilete filed his complaint in this court on November 12, 2018.

(Compl. (Dkt. 1).) He subsequently amended his complaint

twice: first on December 15, 2018 (see First Am. Compl. (Dkt.

4)), and again on July 29, 2019. (SAC.) The United States an-

swered the SAC on August 9, 2019. (United States Answer (Dkt.

15).) On August 19, GMD also answered the SAC and asserted

crossclaims against the United States. (GMD Answer & Cross-

claims (Dkt. 17).) GMD’s crossclaims assert that, should GMD be

found liable to Cubilete, the United States is liable to indemnify

GMD. (Id.) Currently pending before the court is the United

States’s motion to dismiss GMD’s crossclaims for lack of subject

matter jurisdiction under Rule 12(b)(1), or, in the alternative, for

judgment on the pleadings under Rule 12(c). (See Mot.; Mem. in

Supp. of Mot. to Dismiss (“Mem.”) (Dkt 24-1); Mem. in Opp. to

Mot. to Dismiss (“Opp.”) (Dkt. 25); Reply (Dkt. 26).)

LEGAL STANDARD

A. Rule 12(b)(1)

Under Rule 12(b)(1), a district court must dismiss a case when it

“lacks the statutory or constitutional power to adjudicate it.”

Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)1; see

also Banks-Gervais v. Bd. of Elections, No. 18-cv-5252 (RJD), 2018

WL 10070504, at *2 (E.D.N.Y. Sept. 28, 2018) (“Federal courts

are of limited jurisdiction and may not hear a case absent subject-

matter jurisdiction.”). In reviewing a motion to dismiss under

1 When quoting cases, unless otherwise noted, all citations and quotation

marks are omitted and all alterations are adopted.

Rule 12(b)(1), the court must accept all material factual allega-

tions in the complaint as true, see Shipping Fin. Servs. Corp. v.

Drakos, 140 F.3d 129, 131 (2d Cir. 1998), but should not draw

“argumentative inferences favorable to the party asserting juris-

diction.” Atl. Mut. Ins. Co. v. Balfour Maclaine Int’l Ltd., 968 F.2d

196, 198 (2d Cir. 1992) (citing Norton v. Larney, 266 U.S. 511,

515 (1925)). The court may refer to evidence outside the plead-

ings. See Makarova, 201 F.3d at 113 (citing Kamen v. American

Tel. & Tel. Co., 791 F. 2d 1006, 1011 (2d Cir. 1986) (stating that

“evidentiary matter may be presented by affidavit or otherwise”

under a Rule 12(b)(1) motion)). The non-moving party bears the

burden of showing, by a preponderance of the evidence, that the

court has subject matter jurisdiction over its claims. See id.

B. Rule 12(c)

In deciding a Rule 12(c) motion for judgment on the pleadings,

the court employs “the same standard as that applicable to a mo-

tion under Rule 12(b)(6), accepting the allegations contained in

the [nonmovant’s pleading] as true and drawing all reasonable

inferences in favor of the nonmoving party.” Burnette v. Caroth-

ers, 192 F.3d 52, 56 (2d Cir. 1999). Thus, to withstand a motion

to dismiss or for judgment on the pleadings, a complaint “must

contain sufficient factual matter, accepted as true, to ‘state a

claim to relief that is plausible on its face.’’” Aschroft v. Iqbal, 556

U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007)). As with a Rule 12(b)(6) motion, the court

assumes facts alleged in the complaint are true and draws all rea-

sonable inferences in the nonmovant’s favor. See Harris v. Mills,

572 F.3d 66, 71 (2d Cir. 2009).

DISCUSSION

A. Motion to Dismiss for Lack of Subject Matter

Jurisdiction

The United States first argues that this court does not have juris-

diction over GMD’s crossclaims because those crossclaims are

governed by the Contract Dispute Act (“CDA”).

1. The Contract Dispute Act

“The CDA creates a remedial scheme whereby persons wishing

to bring a contract-based claim against the federal government

must first submit their claim in writing to a contracting officer.”

Cohen v. Postal Holdings, LLC, 873 F.3d 394, 401 (2d Cir. 2017)

(citing 41 U.S.C. §§ 7103(a)(1-2)). The CDA “applies to any ex-

press or implied contract . . . made by an executive agency for

(1) the procurement of property, other than real property in be-

ing; (2) the procurement of services; (3) the procurement of

construction, alteration, repair, or maintenance of real property;

or (4) the disposal of personal property.” 41 U.S.C. § 7102(a).

Once a claim has been submitted to the contracting officer, the

officer must “issue a decision in writing and shall mail or other-

wise furnish a copy of the decision to the contractor.” Id.

§ 7103(d).

A “contracting officer’s decision on a claim is conclusive and is

not subject to review by any forum, tribunal, or Government

agency, unless an appeal or action is timely commenced as au-

thorized by this chapter.” Id. § 7103(g). “The CDA provides that,

within 90 days of receipt of a contracting officer’s decision, an

aggrieved contractor may either appeal a decision by a contract-

ing officer to the relevant board of contract appeals, or bring an

action directly on the claim in the United States Court of Federal

Claims.” Cohen, 873 F.3d at 401.

“In order to determine whether the CDA applies, federal courts

generally look to whether the issue at issue is one of contract.”

United States v. J & E Salvage Co., 55 F.3d 985, 987 (4th Cir.

1995); see also RMI Titanium Co. v. Westinghouse Elec. Corp., 78

F.3d 1125, 1136 (6th Cir. 1996) (“[F]or the CDA to apply, it must

first be determined that the claims asserted are ‘essentially con-

tractual’ in nature.”). The CDA “encompasses more than causes

of action that arise under contract law; rather, the language en-

compasses any disputes that relate to a contract.” Rich Marine

Sales, Inc. v. United States, 384 F. Supp. 3d 373, 378 (W.D.N.Y.

2019). The Second Circuit has “held that the question of whether

an action is ‘at its essence’ a contract action . . . depends both on

the source of the rights upon which the plaintiff bases its claims,

and upon the type of relief sought.” Cohen, 873 F.3d at 403.

Courts must therefore make “rational distinctions between ac-

tions sounding genuinely in contract and those based on truly

independent legal grounds.” Megapulse, Inc. v. Lewis, 672 F.2d

959, 969-70 (D.C. Cir. 1982).

At the same time, however, “the mere fact that a court has to

decide some contract issues in the course of resolving a tort ac-

tion does not automatically convert the claim into one sounding

in contract if there is some independent basis for the tort claim.”

J & E Salvage Co., 55 F.3d at 989. “The relevant question is

whether, despite the presence of an underlying contract between

the parties, the rights asserted that form the basis of the claims

are founded on contract or on another ground.” Contango Oper-

ators, Inc. v. United States, No. H-11-cv-0532, 2011 WL

13130834, at *3 (S.D. Tex. Oct. 26, 2011) (quoting B&B Truck-

ing, Inc. v. U.S. Postal Serv., 406 F.3d 766, 774 (6th Cir. 2005)).

2. GMD’s Crossclaims Do Not Fall Within the Scope of

the CDA

Here, GMD’s crossclaims are not governed by the CDA because

the “rights asserted that form the basis of [GMD’s] claims” are

not founded on the contract between GMD and the United

States.

To determine whether GMD’s crossclaims are in essense contract

claims, the court must analyze both “the source of the rights upon

which the plaintiff bases its claims, and . . . the type of relief

sought.” Up State Federal Credit Union v. Walker, 198 F.3d 372,

375 (2d Cir. 1999) (quoting Megapulse, 672 F.2d at 968). Here,

GMD’s crossclaims allege that “[i]f the Plaintiff sustained any of

the injuries as alleged, other than through its own negligence,

and [GMD] is held liable for any portion of those damages, . . .

those damages were caused by the negligent acts and/or omis-

sions of the [United States],” and that if “[P]laintiff recovers

against [GMD] . . . then the [United States] shall be liable to in-

demnify [GMD] for all of such judgment.” (GMD Answer &

Counterclaims at ECF 7.) Both the source of the rights asserted

by GMD and the type of relief sought by GMD sound in common

law and do not derive from or invoke the contract between the

United States and GMD. Cf. J.& E Salvage Co., 55 F.3d at 985 (4th

Cir. 1995) (finding exclusive Court of Claims jurisdiction where

plaintiff’s claim arose from an alleged failure to comply with a

bill of sale and where the principal remedy sought—rescission of

sale—sounded wholly in contract); North Star Alaska v. United

States, 14 F.3d 36 (9th Cir. 1994) (finding exclusive Court of

Claims jurisdiction where the action involved a determination of

the original intent of the contracting parties).

The United States relies heavily on Rich Marine Sales to argue to

the contrary, but that case is distinguishable. There, the United

States entered into a contract with third-party Luedtke Engineer-

ing Company (“Luedtke”) to conduct a dredging project of a

channel along the Niagra River in Buffalo, New York. Rich Marine

Sales, Inc., 384 F. Supp. 3d at 375-76. Plaintiff alleged it was in-

jured as a result of Luedtke’s negligent drilling; in particular,

plaintiff asserted that Luetdke performed dredging outside of the

channel even though the contract between the United States and

Luedtke required dredging to be conducted soley within the con-

fines of the channel. Id. at 376. Luedtke asserted crossclaims

against the United States for indemnifcation and contribution. Id.

In finding that Luedtke’s crossclaims were governed by the CDA,

the court reasoned that “Luedtke’s cross-claims only become rel-

evant if [p]laintiff successfully establishes Luedtke’s liability, and

[p]laintiff’s theory of liability against Luedtke is based on its al-

leged dredging activity in contravention of its contract with the

United States.” Id. at 379. Because any liability would spring

from a breach of the contract between the United States and

Luedtke, the court held that “any indemnification or contribution

claim by Luedtke against the United States is necessarily rooted

in contract.” Id.

Here, by contrast, Cubilete’s theory of liability against GMD is not

based on GMD’s “contravention of its contract with the United

States,” but rather on common-law negligence, (see SAC ¶¶ 15,

16, 22, 23) and any liability owed to GMD by the United States

would not arise from the United States breaching the underling

contract between the parties. Cf. Contango Operators Inc., 2011

WL 13130834, at *4 (finding that claim was “essentially contrac-

tual” where liability between crossclaimaints turned on

interpretation of underlying contract between the parties). The

United States’s argument that GMD’s claims are “rooted in the

contract” because it was GMD’s “negligent performance under

the contract” that led to Cubilete’s injury seeks to elide this dis-

tinction, but fails to point to any facts to support that claim or

reconcile this case with Rich Marine Sales and Contango Opera-

tors. (Opp. at 8.) Furthermore, the United States’s neat syllogism

as to why the CDA must apply—Cubilete was on the ship doing

repair work only because of the contract between the United

States and GMD, so any duty owed to GMD by the United States

must be governed by the terms of the contract—ignores the mo-

tivating inquiry behind the CDA’s applicability which is not mere

presence of a contract between the parties, but whether or not

the claims asserted sound in contract. Here, they do not.

The Second Circuit’s decision in Atterbury v. U.S. Marshals Serv.,

805 F.3d 398 (2d Cir. 2015) is instructive. In that case, the

United States Marshals Service (“USMS”) contracted with Akal

Security, Inc. (“Akal”) to provide security services for United

States courts and judicial officers. Id. at 402. Plaintiff was an em-

ployee of Akal and, pursuant to a contract between the USMS

and Akal, worked as a security officer in a federal building in

Rochester, New York. Id. Plaintiff was terminated from his posi-

tion by USMS and subsequently brought suit, asserting a claim

under the Administrative Procedures Act (“APA”) that USMS vi-

olated his rights under the Due Process Clause and acted

arbitrarily and capriciously by terminating his employment. Id.

In evaluating plaintiff’s APA claim under the two-prong test an-

nounced in Up State, the district court held that “the source of

the rights at issue . . . is related to and dervies from the USMS-

Akal contract.” Atterbury v. U.S. Marshall Serv., No. 12-cv-502,

2014 WL 3392725, at *12 (W.D.N.Y. July 10, 2014). The Second

Circuit reversed, finding that “[t]he right asserted by [plaintiff]

is not USMS’s right to dismiss [plaintiff], but instead [plaintiff’s]

right to continued employment as” an officer. Atterbury, 805 F.3d

at 402. The court emphasized that plaintiff did “not ground his

claim in any provision of Akal’s contract with USMS,” but rather

in an “independent source of rights”—the Due Process Clause of

the Fifth Amendment. Id.

Here, too, GMD has not “grounded” its claim in a provision of its

contract with the United States, but rather asserts an independ-

ent source of rights for its claim; namely, common law

indemnification. Furthermore, Atterbury’s holding directly rebuts

the United States’s repeated assertion that GMD’s claim must

arise from the contract between the parties because, absent the

contract, Cubilete would not have been working on the ship and

would not have been injured. So too in Atterbury: had USMS not

entered into a contract with Akal, the plaintiff would not have

been working in the Rochester federal building and would not

have been terminated. Nonetheless, Atterbury makes clear that

this fact alone—that a contract is a but-for cause of a harm—is

not sufficient on its own to make the claim at issue “essentially

contractual.”

Accordingly, the court finds that it has jurisdiction over GMD’s

crossclaims as they are not goverened by the CDA.

B. Motion to Dismiss Pursuant to Rule 12(c)

The United States argues that it is entitled to judgment on the

pleadings due to GMD’s failure to state a claim. (See Mem. at 8;

Reply at 5.) While it is true that the pleading standards may be

“lessened somewhat for third-party claims, which may be read in

conjunction with the original pleadings . . . third-parties seeking

indemnification or contribution must still set forth enough facts

to state a claim to relief that is plausible on its face.” Sands Harbor

Marina Corp. v. Wells Fargo Ins. Servs. of Oregon, Inc., 156 F. Supp.

3d 348, 361 (E.D.N.Y. 2016); see also Energy Brands, Inc. v.

Jorgensen, No. 09-cv-591A, 2011 WL 282354, at *7 (W.D.N.Y.

Jan. 25, 2011) (dismissing crossclaims that contained only “con-

clusory allegations” that if movants were “found liable to

plaintiff, [co-defendants] [would be] liable to [movants] under

a theory of contribution or indemnification”); Gabriel Captial, L.P.

v. Natweset Fin., Inc., 137 F. Supp. 2d 251, 269-70 (S.D.N.Y.

2000) (dismissing crossclaim that defendant was entitled to in-

demnification and/or contribution from co-defendants without a

cause of action or supporting facts).

Applying these standards, GMD’s crossclaims fall short of what

Rule 8 requires, as they do not “provide more than boilerplate

language” to give adequate notice to the United States of the

claims asserted against them. GMD asserts the following cross-

claims:

If the Plaintiff sustained any of the alleged damages other

than through the negligence of the Plaintiff, and if answering

Defendant is held liable for any portion of those damages,

which it denies, those damages were caused in whole or in

part by the negligent acts and/or omission of the Defendant

above named and not by any negligence on the part of the

answering Defendant.

In the event the Plaintiff should recover against answering

Defendant for any of the damages alleged in the complaint,

then the Defendant above named, shall be liable to indem-

nify the answer Defendant on the basis of apportionment of

responsibility.

(GMD Answer & Counterclaims at ECF 7.) While GMD’s “cross-

claim[s] d[o] reference the [c]omplaint, [they] d[o] not contain

a single independent fact indicating why [the United States] is

obligated to indemnify [GMD] in the event [GMD] is ultimately

found liable to [Cubilete].” Sands Harbor, 156 F. Supp. 3d at 361.

GMD admits as much, explaining that its crossclaims are “simply

reiterating [Cubilete]’s allegation.” (Opp. at 7.) That is insuffi-

cient, however, to meet the pleading requirements of Rule 8.

Accordingly, the United States’s motion to dismiss is granted.

CONCLUSION

For the reasons stated above, the United States’s (Dkt. 24) mo-

tion to dismiss is granted.

SO ORDERED.

Dated: Brooklyn, New York

June 29, 2020

_/s/ Nicholas G. Garaufis_

NICHOLAS G. GARAUFIS

United States District Judge