Accurate Controls, Inc. v. Cerro Gordo County Board of Supervisors (627 F. Supp. 2d 976, 2009)

Citations

627 F. Supp. 2d 976

Full opinion text

MEMORANDUM OPINION AND ORDER REGARDING THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

MARK W. BENNETT, District Judge.

TABLE OF CONTENTS

I. INTRODUCTION 979

A. Factual Background...................................................979

1. The parties, the project, and the bids................................980

2. Payment applications..............................................980

3. Certifications of acceptance of the project............................981

B. Procedural Background................................................981

1. Accurate’s first lawsuit ............................................981

2. Accurate’s second lawsuit..........................................981

3. Accurate’s third lawsuit............................................981

4. The cross-motions for summary judgment............................982

5. The proposal to certify questions....................................984

II.LEGAL ANALYSIS........................................................984

A. Standards For Summary Judgment.....................................984

B. The Cross-Motions For Summary Judgment.............................985

1. Subject matter jurisdiction.........................................985

a. Arguments of the parties.......................................985

b. Analysis......................................................986

2. Timeliness........................................................989

a. Arguments of the parties.......................................989

b. Analysis......................................................989

3. Section 573.15’s requirements.......................................990

a. Applicability..................................................990

i. Arguments of the parties...................................990

ii. Analysis..................................................992

b. Satisfaction of § 573.15’s requirements .........................1000

i. Arguments of the parties..................................1000

ii. Analysis.................................................1001

4. Accurate’s permissible recovery....................................1006

a. Arguments of the parties......................................1006

b. Analysis.....................................................1006

5. Continued viability of a Chapter 573 claim against the County Board .........................................................1007

a. Arguments of the parties......................................1007

b. Analysis.....................................................1007

III.CONCLUSION ...........................................................1008

A sub-subcontractor for electronic security systems for a new county jail has brought three actions, now consolidated, pursuant to Iowa Code Ch. 573 to recover payment from the general contractor, the contractor’s surety, and the county board of supervisors after the electrical subcontractor that directly employed the sub-subcontractor walked off the job and closed its doors without paying the sub-subcontractor. The county sheriff intervened and joined with the county board of supervisors to assert various fraud and other claims against the sub-subcontractor and to seek a temporary restraining order and preliminary injunction to compel the sub-subcontractor to provide and install the permanent operating licenses for the jail’s electronic security system. Presently before the court are the original parties’ cross-motions for summary judgment on various aspects of the sub-subcontractor’s Chapter 573 claim.

/. INTRODUCTION

A. Factual Background

The court will not attempt here an exhaustive dissertation on the undisputed and disputed facts in this case, despite the extensive Statements of Facts submitted by the parties in support of and resistance to the cross-motions for summary judgment. Rather, the court will set forth sufficient of the facts, both undisputed and disputed, to put in context the parties’ arguments concerning their cross-motions for summary judgment. Indeed, the facts necessary to explain the context of the parties’ cross-motions for summary judgment in this case are a relatively small subset of the facts that might otherwise be relevant to the disposition of all of the parties’ claims and defenses, where the issues presented in the cross-motions are primarily legal issues. Additional factual allegations — and the extent to which they are or are not disputed or material — will be discussed, if necessary, in the court’s legal analysis.

1. The parties, the project, and the bids

In 2006, the defendant Cerro Gordo County Board of Supervisors (the County Board) let for public bids a public improvement project identified as the Cerro Gordo County Law Enforcement Center Project (the Jail Project), for construction of a new county jail located in Cerro Gordo County, Iowa. The Jail Project was let as a design-bid-build delivery system using a single prime contractor. The successful bidder for the Jail Project was defendant Dean Snyder Construction (DSC). As required by law, DSC furnished a bond for the Jail Project through defendant Merchants Bonding Company (Merchants).

Prior to DSC’s bid on the Jail Project, DSC received a lump-sum bid for electrical subcontractor work from Wubbens Electric, and prior to that, Wubbens Electric had received a lump-sum bid on electronic security systems from plaintiff Accurate Controls, Inc. (Accurate). Accurate had also submitted its bid to other electrical subcontractors who were bidding on the Jail Project. Accurate was one of the approved controls contractors listed in the contract specifications for the Jail Project from the County Board. After the County Board accepted DSC’s bid, DSC entered into a subcontract for electrical work with Wubbens Electric. The parties agree that, before DSC accepted Wubbens Electric’s bid, Wubbens Electric had informed DSC that it was going to use Accurate for the work under Division 17 of the specifications, which pertained to the electronic security systems. Indeed, the subcontract between DSC and Wubbens expressly provided “Accurate controls [sic] to be subcontracted for all Division 17 work by Wubbens and included in this contract.” Defendants’ Appendix at 171. Wubbens Electric, in turn, entered into a Purchase Order contract with Accurate for the security systems part of the Jail Project for the lump-sum amount of $525,950.00, which included labor and materials for the electronic security systems for the Jail Project.

2. Payment applications

DSC, Wubbens Electric, and Accurate all engaged in work on the Jail Project. Accurate submitted payment applications to Wubbens Electric, inter alia, in December 2007 for $242,587.15, which, with a 5% retainage, resulted in a current payment due of $230,457.78, and in January 2008 for $64,333.55, with a current amount due of $61,116.86. Wubbens Electric, itself, submitted monthly payment applications to DSC in those same months. DSC used information from Wubbens Electric and its other subcontractors and suppliers to prepare DSC’s pay applications to the County Board. DSC verified the accuracy of the mathematical calculations and the percentage of work claimed as completed in Wubbens Electric’s pay applications. However, Accurate contends that it was never paid for either the December 2007 or January 2008 pay applications, even though the parties agree that its work on the Jail Project was complete and satisfactory. The parties also agree that Wubbens Electrie ceased operations in 2008 and is now defunct.

3. Certifications of acceptance of the project

On March 11, 2008, the Chairman of the County Board signed a “Certificate Of Substantial Completion,” which stated, in pertinent part, “The Owner accepts the Work or designated portion thereof as substantially complete and will assume full possession thereof at 8:00 AM February 14, 2008.” Plaintiffs Appendix at 270. The parties agree that this Certificate accepted the Jail Project except for mechanical systems. The parties also agree that, on May 6, 2008, the County Board approved the final change order submitted by DSC. Furthermore, the parties agree that the County Board released the retainage except for an amount related to the mechanical systems on May 27, 2008. Finally, on November 3, 2008, the County Board passed a resolution entitled “a resolution accepting the law enforcement center project and releasing final retainage.”

B. Procedural Background

1.Accurate’s first lawsuit

On April 18, 2008, thirty-eight days after the Chairman of the County Board signed the “Certificate Of Substantial Completion” on March 11, 2008, Accurate filed the first Complaint in these actions initiating Case No. C 08-3021-MWB. That Complaint invoked this federal court’s diversity jurisdiction, named the County Board, DSC, and Merchants as defendants, and asserted a claim for non-payment pursuant to Iowa Code Ch. 573 seeking judgment against the defendants on the retainage and Chapter 573 Bond relating to the Jail Project in the amount of not less than $328,441.95, plus reasonable attorney fees as authorized by Iowa Code § 573.21, costs, interest, and such other relief as the court determines to be appropriate. Defendants DSC and Merchants filed a joint Answer And Affirmative Defenses (docket no. 9) denying Accurate’s claim on May 12, 2008, and defendant County Board filed a separate Answer And Affirmative Defenses (docket no. 10) on May 14, 2008.

2. Accurate’s second lawsuit

On July 3, 2008, thirty-seven days after the County Board released the retainage except for an amount related to the mechanical systems on May 27, 2008, Accurate filed its second Complaint in these actions initiating Case No. C 08-3035-MWB, naming the same defendants, making essentially the same allegations, and asserting the same claim. However, in this second Complaint, Accurate asserted that it was filing the second action “to perfect its Iowa Code chapter 573 claim” in the absence of a stipulation that its Complaint in Case No. C 08-3021-MWB was timely and in fear that the defendants would assert that either May 6, 2008, or May 27, 2008, was the final acceptance date that triggered the time for the filing of a Chapter 573 claim. The County Board filed an Answer And Affirmative Defenses (docket no. 5) in that case on July 21, 2008. Before the other defendants answered, however, the court entered an Order (docket no. 8 in Case No. C 08-3035-MWB, and docket no. 13 in Case No. C 08-3021-MWB) on August 11, 2008, consolidating Accurate’s two actions with Case No. C 08-3021-MWB as the lead case in which all filings were to be made. All defendants then filed a joint First Amended And Substituted Answer And Affirmative Defenses (docket no. 18) in Case No. C 08-3021-MWB responding to the allegations of the Complaint actually filed in Case No. C 08-3035-MWB.

3. Accurate’s third lawsuit

On January 2, 2009, sixty days after the County Board passed a resolution entitled “a resolution accepting the law enforcement center project and releasing final retainage” on November 3, 2008, Accurate filed its third Complaint in these actions initiating Case No. C 09-3001-MWB, naming the same defendants, making essentially the same allegations, and asserting the same claim. Although Accurate made no allegations explaining why it was filing the third action, it did allege that it “filed a Complaint after the expiration of thirty days and no later than sixty days following the completion and final acceptance of the Project,” apparently running the days from the date of the County Board’s November 3, 2008, resolution. All three defendants filed a joint Answer And Affirmative Defenses (docket no. 4) in that action on January 9, 2009. On January 29, 2009, the court entered an Order (docket no. 5 in Case No. C 09-3001-MWB and docket no. 23 in Case No. C 08-3021-MWB) consolidating Accurate’s third action with its previous two, again with Case No. C 08-3021-MWB as the lead case in which all further filings were to be made, although all filings were to show all three case numbers in the caption.

A bench trial in the consolidated actions is scheduled to begin on or during the two-week period beginning July 6, 2009.

4. The cross-motions for summary judgment

On February 12, 2009, the defendants filed a Motion For Summary Judgment (docket no. 27), asserting the following grounds: (1) that Accurate has failed to comply with Iowa Code § 573.16’s filing requirements and statute of limitations, so that the entire ease should be dismissed; (2) that Iowa Code § 573.16 deprives this court of the ability to grant Accurate’s requested relief and/or deprives this court of subject matter jurisdiction, so that the entire case should be dismissed; (3) that Accurate failed to comply with Iowa Code § 573.15’s notice requirements, so that its claim for payment for materials is barred; and (4) that the County Board has properly paid to DSC all retainage that it was holding under Iowa Code Ch. 573, so that the County Board is no longer a proper party. Accurate filed a Resistance (docket no. 37) on March 6, 2009, and the defendants filed a Reply (docket no. 42) on March 16, 2009. Accurate filed a Second Supplemental Response To Defendants’ Statement Of Material Facts (docket no. 47) on March 27, 2009. The defendants filed an Objection To Use Of Affidavit Of Jason Loewe (docket no. 48), challenging Accurate’s use of the affidavit in question, which was attached to Accurate’s Second Supplemental Response To Defendants’ Statement Of Material Facts (docket no. 47).

On February 12, 2009, Accurate also filed a Motion For Summary Judgment (docket no. 29), asserting that there were no genuine issues of material fact that would preclude summary judgment on its Chapter 573 claim and asserting, more specifically, (1) that it timely filed a claim under Iowa Code § 573.7 and timely filed the instant civil actions in this court; (2) that Iowa law provides that it may recover its unpaid contract price; and (3) that it was not a material supplier, so that it was not required to comply with the notice requirements of Iowa Code § 573.15. The defendants filed a Resistance (docket no. 40) to Accurate’s motion on March 9, 2009, and Accurate filed a Reply (docket no. 44) in further support of its motion on March 16, 2009. On March 17, 2009, the defendants filed a Supplemental Statement Of Additional Facts In Support Of Their Resistance To Plaintiffs Motion For Summary Judgment (docket no. 46), to which Accurate responded with its Second Supplemental Response To Defendants’ Statement Of Material Facts (docket no. 47). On May 14, 2009, the defendants filed a Supplement To Their Statement Of Facts And Responses To Statement Of Facts In Respect To Pending Motions For Summary Judgment (docket no. 66). On May 28, 2009, the defendants also filed a Notice Of New Authority In Respect To Pending Motions For Summary Judgment (docket no. 67). On June 15, 2009, however, the defendants filed a Withdrawal of Their Supplement To Their Statement Of Facts And Responses To Statement Of Facts In Respect To Pending Motions For Summary Judgment (docket no. 73).

The parties requested oral arguments on their cross-motions for summary judgment, but the court’s crowded schedule and the short time now remaining until the scheduled bench trial have not allowed the timely scheduling of oral arguments. Therefore, the cross-motions for summary judgment are deemed fully submitted on the parties’ written submissions.

5. The proposal to certify questions

Upon its review of the record in this matter and the parties’ cross-motions for summary judgment, the court determined that it should consider whether or not certain questions raised in the parties’ motions for summary judgment should be certified to the Iowa Supreme Court pursuant to N.D. Ia. L.R. 83 and Iowa Code § 684A.1. See N.D. Ia. L.R. 83 (providing that a party may move to certify to the state Supreme Court or the court may, on its motion, certify to the state Supreme Court a question of state law, if the question “may be determinative of a cause pending in this court and it appears there may be no controlling precedent in the decisions of the appellate courts of the state”); Iowa Code § 684A.1 (authorizing the Iowa Supreme Court to answer questions of law certified to it by a federal court or an appellate court of another state, if the question “may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the appellate courts of this state”). Therefore, by Order (docket no. 71) dated June 9, 2009, the court directed the parties to file by June 16, 2009, responses to the court’s proposal to certify questions to the Iowa Supreme Court stating their positions on whether or not to certify any question or questions to the Iowa Supreme Court, and, without regard to whether they favored or opposed certification of any question or questions, their formulations of any question or questions to be certified.

On June 16, 2009, the defendants filed their Notice Of Filing Response To Court’s Proposal To Certify Questions (docket no. 77), objecting to certification of any questions, but, in the alternative, proposing modified versions of some of the court’s proposed questions, and posing additional questions. Also on June 16, 2009, Accurate filed its Notice Of Filing Response To Court’s Proposal To Certify Questions (docket no. 79), also objecting to certification of any questions, but also proposing alternative formulations of two of the questions proposed by the court.

Therefore, rather than certify questions to the Iowa Supreme Court over the parties’ objections, this court will, in this memorandum opinion and order, resolve all of the questions presented in the cross-motions for summary judgment that it might otherwise have certified to the Iowa Supreme Court, resolving to the best of its ability questions on which this court believes that Iowa law is unsettled.

II. LEGAL ANALYSIS

A. Standards For Summary Judgment

As this court has noted on a number of occasions, motions for summary judgment essentially “define disputed facts and issues and ... dispose of unmeritorious claims [or defenses].” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1982, 167 L.Ed.2d 929 (2007); see Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (“One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses.... ”). Any party may move for summary judgment regarding “all or any part” of the claims asserted in a case. Fed R. Crv. P. 56(a) (allowing a claimant to move for summary judgment “at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party”) & (b) (allowing a defending party to move for summary judgment “at any time”). Summary judgment is only appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c) (emphasis added); see Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir.2005) (“Summary judgment is appropriate if viewing the record in the light most favorable to the nonmoving party, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.”). “[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Moreover, summary judgement is particularly appropriate “where the unresolved issues are primarily legal rather than factual.” Aucutt v. Six Flags Over Mid-America, Inc., 85 F.3d 1311, 1315 (8th Cir.1996).

B. The Cross-Motions For Summary Judgment

Because there is some overlap of the issues in the parties’ cross-motions for summary judgment, the court finds it appropriate to address the issues topically, rather than to address each motion in turn. Where there is such overlap of the issues in the motions, the court’s summary of the parties’ arguments will take into account arguments made in support of or resistance to both pending motions.

1. Subject matter jurisdiction

Logically, the first issue that the court must address is the defendants’ challenge to this court’s subject matter jurisdiction to hear Accurate’s Iowa Code Ch. 573 claim at all. This is so, because federal courts are courts of limited jurisdiction and must assure themselves that they have subject matter jurisdiction over claims before them at all stages of the proceedings, even if the parties do not raise the question of subject matter jurisdiction themselves. See Crawford v. F. Hoffman-La Roche, Ltd., 267 F.3d 760, 764 n. 2 (8th Cir.2001) (“[Fjederal courts are obligated to raise the issue of subject-matter jurisdiction sua sponte.”) (citing Andrus v. Charlestone Stone Products Co., 436 U.S. 604, 608 n. 6, 98 S.Ct. 2002, 56 L.Ed.2d 570 (1978)); see also Morris v. Winnebago Indus., Inc., 936 F.Supp. 1509, 1530 n. 8 (N.D.Iowa 1996); McCorkindale v. American Home Assur. Co., 909 F.Supp. 646, 649 n. 4 (N.D.Iowa 1995); Laird v. Ramirez, 884 F.Supp. 1265, 1269-70 (N.D.Iowa 1995).

a. Arguments of the parties

The defendants assert that Iowa Code § 573.16 states that the court in the county where the public improvement is located is the exclusive source from which any remedy can be given under Iowa Code Ch. 573, so that the statute deprives this federal court of subject matter jurisdiction. The defendants acknowledge that the Eighth Circuit Court of Appeals may have rejected this subject matter jurisdiction argument in Cincinnati Indem. Co v. A & K Constr. Co., 542 F.3d 623 (8th Cir.2008), but they nevertheless assert it to preserve the issue for appeal, because there is a split in authority among the federal Circuit Courts of Appeals on the issue. They argue that federal courts addressing similar jurisdictional issues in workers’ compensation cases have dismissed or abstained from hearing such cases, or determined that they could grant no remedy, because state law vested other tribunals with the exclusive power to grant the requested relief.

Accurate argues that the restriction on the county in which an action pursuant to Iowa Code Ch. 573 can be brought in Iowa Code § 573.16 has no application to a federal court. Accurate argues that a state statute simply cannot deprive a federal court of diversity subject matter jurisdiction that the federal court may otherwise properly exercise pursuant to 28 U.S.C. § 1332. Instead, Accurate asserts that federal courts look to the federal venue statutes to determine where a diversity action may be heard, and need not follow a contrary state venue statute. Accurate also argues that an Iowa Code Ch. 573 action is a “transitory” action, not a “local” action involving real property, so that it need not be brought in the county where the property is located. Finally, Accurate argues that, if Iowa Code § 573.16’s restriction on the county in which the action can be brought is applicable, the proper remedy is for the court to transfer this action to Iowa District Court.

In reply, in an argument not entirely consistent with their lack of subject matter jurisdiction argument in their opening brief, the defendants argue that they are not asserting that Iowa Code Ch. 573 actions can only be brought in state court, but that this federal court is not located in Cerro Gordo County; they assert that if the public improvement in question were located in Woodbury County or Linn County, where this federal court has courthouses, Accurate’s action could proceed in federal court. The defendants also argue that Accurate agreed to the requirements of Iowa Code Ch. 573, including its requirement that any lawsuit be brought in the “county where the improvement is located,” by entering into a contract pursuant to or referencing Iowa Code Ch. 573.

b. Analysis

The statutory provision on which the defendants’ subject matter jurisdiction argument relies provides as follows, with the part pertinent here highlighted:

The public corporation, the principal contractor, any claimant for labor or material who has filed a claim, or the surety on any bond given for the performance of the contract, may, at any time after the expiration of thirty days, and not later than sixty days, following the completion and final acceptance of said improvement, bring action in equity in the county where the improvement is located to adjudicate all rights to said fund, or to enforce liability on said bond.

Iowa Code § 573.16 (emphasis added). Thus, by its plain terms, the statute lays venue for an Iowa Code Ch. 573 action in a particular county; it says nothing about the state courts or any particular state court having exclusive jurisdiction over Iowa Code Ch. 573 actions or providing the exclusive remedy for such actions. The question is whether this state venue statute also deprives a federal court of diversity subject matter jurisdiction.

More than a century ago, the United States Supreme Court rejected the notion that a state legislature can insulate a county from federal jurisdiction by providing that the county could only be sued in county courts. See Chicot County v. Sherwood, 148 U.S. 529, 533-34, 13 S.Ct. 695, 37 L.Ed. 546 (1893); see also Cowles v. Mercer County, 74 U.S. 118, 122, 7 Wall. 118, 19 L.Ed. 86 (1868); Penn General Cas. Co. v. Commonwealth of Pennsylvania ex rel. Schnader, 294 U.S. 189, 197, 55 S.Ct. 386, 79 L.Ed. 850 (1935) (“The jurisdiction conferred on the District Courts by the Constitution and laws of the United States cannot be affected by state legislation.”). Since that time, various courts have rejected the notion that a state venue statute, laying venue for certain actions only in a certain county, or even a state statute granting state courts exclusive jurisdiction over certain actions, could deprive a federal court of diversity subject matter jurisdiction that would otherwise be proper.

Specifically, the Eighth Circuit Court of Appeals held some thirty years ago that a Nebraska statute placing exclusive jurisdiction in county courts over tort claims against Nebraska decedents did not act as a restriction or abrogation of a federal court’s diversity jurisdiction over such claims. Greyhound Lines, Inc. v. Lexington State Bank and Trust Co., 604 F.2d 1151, 1154-55 (8th Cir.1979). The court held that the only requirements for federal diversity jurisdiction are those stated in 28 U.S.C. § 1332(a). Id. at 1155. More recently, the Eighth Circuit Court of Appeals has held that a state statute giving a certain state tribunal exclusive jurisdiction, at least in the first instance, does not deprive the federal courts of diversity jurisdiction over declaratory actions, although it may be appropriate for the federal court to stay or abstain in the federal action while a parallel state action is pending. See Cincinnati Indem. Co. v. A & K Constr. Co., 542 F.3d 623, 624-25 (8th Cir.2008) (dismissal of federal declaratory action concerning workers compensation coverage was not appropriate, because the federal court did not lack subject matter jurisdiction, and could try an original action concerning a state workers compensation claim, if the requisites of diversity jurisdiction were met, but the court should have abstained from exercising jurisdiction in a declaratory case where a parallel state lawsuit was pending).

Similarly, the Fourth Circuit Court of Appeals recognized some time ago that “a state venue statute can have no application to courts of the United States,” because federal venue depends on the federal venue statute, and “[a] statute limiting the right to entertain the suit [only in a certain state court] no more ousts the jurisdiction of the federal court than does a statute limiting the right to entertain a suit against a municipal corporation to a designated court of the county in which the corporation is situated.” Popp v. Archbell, 203 F.2d 287, 288-90 (4th Cir.1953) (also explaining that such a state statute is “intended to regulate procedure and practice in the courts of the state” and is “not intended to limit, as indeed it could not limit, the jurisdiction of courts of the United States”); see also Miller v. Davis, 507 F.2d 308, 316 (6th Cir.1974) (“State law does not control the venue of federal courts.”); Missouri Pac. R. Co. v. 55 Acres of Land Located In Crittenden County, Ark., 947 F.Supp. 1301, 1308-09 (E.D.Ark.1996) (a state statute requiring a condemning party to file suit in the circuit court in the county in which the land is located is merely a venue statute that cannot defeat diversity jurisdiction in federal court, citing, inter alia, Greyhound Lines). To put it another way, where a “transitory” action, such as this one, not involving real property, is in federal court solely on the basis of diversity jurisdiction, venue is determined by the federal venue statute, 28 U.S.C. § 1391(a), “and State venue statutes are not applicable.” Cobb v. National Lead Co., 215 F.Supp. 48, 51 (D.C.Ark.1963).

Moreover, the Tenth Circuit Court of Appeals held more than half a century ago that a federal court in a district that encompasses the county in which a state venue statute would lay venue is a court in that county, and venue in the federal court is thus proper. Erwin v. Barrow, 217 F.2d 522, 525 (10th Cir.1954) (recognizing that state statutes providing that suits concerning recovery of real estate and suits involving land in more than one county “must be brought in the county in which the subject of the action is situated” were statutes that “relate to venue and not to jurisdiction,” in that “[tjhey are concerned with the place of the maintenance of the suit, not the jurisdiction of the court to entertain them,” and noting that a federal court “is merely another court of the state where it sits,” so that a federal court in a district that included the counties in which the state statute would lay venue was a proper court to hear the action); accord Arrington Dev., L.L.C. v. Alonto, 2009 WL 257037, *1 (D.Utah Feb. 3, 2009) (slip op.) (rejecting the argument that a Utah statute that requires a mechanic’s lien enforcement action to be filed in the county where the property is located established that the state court could provide the exclusive remedy, depriving the federal court of diversity jurisdiction, noting that venue in the federal court was proper pursuant to 28 U.S.C. § 1391(a), that the federal judicial district encompassed the county in which the state statute would lay venue, and that the defendant had provided no authority that indicated that a state venue statute trumps a federal venue statute).

The defendants’ revised argument, in their reply brief, that the federal court can exercise jurisdiction under the Iowa statute only if the federal courthouse is located in the county specified in the state statute, and thus, the state statute does not attempt to deprive the federal courts of jurisdiction, is untimely. The court does not have to consider the defendants’ revised argument at all, because it is a substantially different argument raised for the first time in the defendants’ reply brief. See Transamerica Life Ins. Co. v. Lincoln Nat’l Life Ins. Co., 255 F.R.D. 645, 650 n. 1 (N.D.Iowa 2009) (neither this court nor the Eighth Circuit Court of Appeals will ordinarily consider an argument raised for the first time in a reply brief). Nevertheless, if that argument had been timely asserted, it might stand on better ground if the selection of the forum in a particular county were in a contractual forum selection clause rather than in a state venue statute. See Alliance Health Group, L.L.C. v. Bridging Health Options, L.L.C., 553 F.3d 397, 399-400 (5th Cir.2008) (a contractual forum selection clause providing that “exclusive venue for any litigation related hereto shall occur in Harrison County, Mississippi,” limited the available forum to the state court or a federal court sitting in the specified county, and did not include the federal court in a district that merely encompassed that county). However, the court rejects the defendants’ argument that, simply by entering into a contract pursuant to or referencing Iowa Code Ch. 573, Accurate somehow explicitly or implicitly agreed that a court sitting in Cerro Gordo County could provide the exclusive remedy in this case. The court sees no reason why merely referencing in an agreement a statute that does not have the effect the defendants desire would give the supposed implicit agreement to the terms of the statute greater effect than the statute could have by itself. Again, the situation might be different if the parties explicitly agreed to an “exclusive venue” clause in their agreement, but they did not do so here.

That part of the defendants’ motion for summary judgment asserting that this court lacks subject matter jurisdiction, or that the Iowa District Court of Cerro Gordo County can provide the exclusive remedy on Accurate’s Iowa Code Ch. 573 claim, will be denied.

2. Timeliness

a. Arguments of the parties

As a companion to their contention that Iowa Code § 573.16 deprives this court of subject matter jurisdiction, the defendants argue in their motion for summary judgment that § 573.16 also makes Accurate’s various actions untimely. They contend that § 573.16 is a “special statute of limitations” that the Iowa courts have strictly enforced and that this federal court is bound to follow. The defendants contend that, because Accurate did not file any action in a state court in Cerro Gordo County within the 30-day time frame imposed by § 573.16, Accurate has not and cannot now file a timely action. They contend that, if Accurate wished to pursue its action in federal court, Accurate could have filed a timely action in the Iowa District Court for Cerro Gordo County, then asked that the state action be stayed in light of the pending federal action. The defendants assert that such parallel filings are common in the arbitration context to preserve a mechanic’s lien claimant’s rights.

In its cross-motion for summary judgment, Accurate raises a somewhat different “timeliness” argument, arguing that § 573.16 requires a claimant to file suit “at any time after the expiration of thirty days, and not later than sixty days, following the completion and final acceptance of said improvement.” Accurate argues that its first and second lawsuits were “protective” filings, to ensure timeliness, but that final acceptance of the Jail Project ultimately occurred on November 3, 2008; thus, Accurate contends that its third suit was timely filed on January 2, 2009, sixty days later.

b. Analysis

Iowa Code § 573.16 includes a timeliness requirement, highlighted in the following quotation, as well as the venue requirement previously discussed:

Iowa Code § 573.16 (emphasis added). Thus, the statute provides a 30-day “window” for the filing of an action on a Chapter 573 claim, opening thirty days after the “completion and final acceptance of said project,” and closing sixty days after that “completion and final acceptance” date.

The defendants do not make the “timeliness” argument that Accurate apparently feared; that none of the three actions Accurate filed was timely in relation to the completion and final acceptance of the Jail Project improvement. Rather, in both their own motion for summary judgment and in their resistance to Accurate’s motion for summary judgment, the defendants argue that no timely action was filed in an appropriate court in Cerro Gordo County. Moreover, the court finds that any argument by the defendants that Accurate’s action, if filed in the right court, was untimely under Iowa Code § 573.16 would be foreclosed by the defendants’ affirmative assertions that, “for purposes of this case, completion and final acceptance of the project occurred on March 11, 2008,” and that “under any scenario, completion and final acceptance occurred no later than November 3, 2008.” Defendants’ Response To Plaintiffs Statement Of Facts In Support Of Their Resistance To Plaintiffs Motion For Summary Judgment (docket no. 40-3), ¶ 59. The defendants do not dispute that Accurate’s Complaint in Case No. C 08-3021-MWB was filed on April 18, 2008, thirty-eight days after the March 11, 2008, “completion and final acceptance” date that they acknowledge and advocate. Nor do they dispute that Accurate’s Complaint in Case No. C 09-3001-MWB was filed on January 2, 2009, sixty days after the November 3, 2008, date that they concede is the last date for “completion and final acceptance.”

The “timeliness” argument that the defendants actually make — that no timely action was filed in the right court — also fails in light of the court’s conclusion, above, that Accurate filed its Complaints in the right court. Thus, the court finds that at least one of Accurate’s Complaints was timely; the court need not determine which one until and unless the parties demonstrate that the determination of a substantive issue turns on which date is, as a matter of law, the “completion and final acceptance” date of the Jail Project.

Therefore, that part of Accurate’s motion for summary judgment asserting that its federal action is timely will be granted, and that part of the defendants’ motion for summary judgment asserting that no timely action was filed in the correct court will be denied.

3. Section 573.15’s requirements

Both parties have moved for summary judgment on whether or not Iowa Code § 573.15’s “material supplier’s exception” — which bars a Chapter 573 claim “for material furnished” to a subcontractor, unless certain requirements for notice to a general contractor were met — bars Accurate’s claims in this case. The defendants assert that the provision is applicable and that there is no genuine issue of material fact that its “notice” requirements were not met. Accurate asserts that the provision is simply inapplicable. The court will begin with the “applicability” issue, then turn to other arguments concerning the effect of the provision here, if the court finds that it is applicable.

a. Applicability

i. Arguments of the parties. The defendants assert that § 573.15 does not state that it applies only to those who supply materials, but to “claims for material furnished.” The defendants contend that, because Accurate furnished materials, even if it also supplied labor, the provision applies to Accurate, or at least to that part of Accurate’s claim for materials. The defendants argue that the Iowa legislature knew how to draft statutory language that applies only to those who only furnish material, because in Iowa Code § 573.7, the legislature carved out an exception — for persons “furnishing only materials to a subcontractor who is furnishing only materials” — from a provision otherwise applicable to persons “who performed labor, or furnished material, service, or transportation, in the construction of a public improvement.” The defendants also point out that, in Lumberman’s Wholesale Co. v. Ohio Farmers Ins. Co., 402 N.W.2d 413, 415 (Iowa 1987), the court stated that failure to require “subcontractors and material suppliers who do not have contracts with the general contractor ... to comply with the notice requirement of section 573.15 would serve to extend liability of the general contractor beyond that established by either the statutory scheme or the contractor’s contractual liability.” The defendants argue that this statement indicates that both subcontractors and material suppliers are subject to § 573.15’s notice requirements with respect to any claims for material, where a “subcontractor” is one who furnishes labor and material.

In resistance to the defendants’ motion for summary judgment and in support of its own motion for summary judgment, Accurate argues that, while other provisions of Chapter 573 must be construed liberally, § 573.15, as an exception, must be construed narrowly, meaning that it should not be interpreted in a way that imposed limitations that are not apparent in the plain language of § 573.15. Accurate contends that none of the three principal cases interpreting § 573.15, including Lumberman’s Wholesale Co., on which the defendants rely, actually involved a person who provided labor as well as material. Accurate argues that, in Lumberman’s Wholesale Co., the Iowa Supreme Court nevertheless distinguished between a subcontractor and a material supplier, then held that material suppliers must comply with § 573.15, thereby indicating, at least in dicta, that subcontractors need not comply with the notice requirements of § 573.15. Accurate also argues that the defendants misread Lumberman’s Wholesale Co., which Accurate reads to limit the discussion of the negative effects of failure to require notice to the general contractor as relating only to material suppliers, not to subcontractors who also provide labor. Accurate argues that the notice requirement of § 573.15 would be redundant in the case of a subcontractor (or sub-subcontractor) that also performs labor, because the general contractor is aware of the presence of the subcontractor on the site, but may have no knowledge of the identity of a material supplier to a subcontractor. Accurate also points out that, in a fourth— and earlier — case not cited by the defendants, First Federal State Bank v. Town of Malvern, 270 N.W.2d 818, 822 (Iowa 1978), the Iowa Supreme Court expressly held that § 573.15 “refers only to the claims of materialmen.”

Accurate also argues that § 573.15 applies only to “claims for material furnished,” while § 573.6 identifies the types of claims as “all just claims due [to claimants] for labor performed and materials furnished,” and § 573.7 applies to “the claim for such labor, or material, service, or transportation.” Thus, Accurate argues that, unlike the other two provisions, § 573.15 is limited to claims for materials and, hence, Accurate’s reasoning apparently runs, is limited to claims by entities that only furnish materials. Accurate argues that an amendment to § 573.7 in 1983, which added the second paragraph pertaining to “[a] person furnishing only materials to a subcontractor who is furnishing only materials,” was not intended to and never affected § 573.15, and that no simultaneous amendment to § 573.15 was necessary, because § 573.15 had already been construed to apply only to claims of material suppliers.

In support of its own motion for summary judgment, Accurate adds an alternative argument that DSC did order materials for Division 17 work, so that § 573.15 is inapplicable to its claim for material furnished. Accurate argues that this is so, because DSC required Wubbens Electric to hire Accurate in its subcontract with Wubbens Electric and incorporated Accurate’s quote to Wubbens Electric by reference in that subcontract. Accurate also asserts that DSC knew that Division 17 included both labor and material, knew that Accurate was performing Division 17 work, and observed Accurate’s employees on the site performing labor and furnishing material.

In resistance to Accurate’s alternative argument that DSC ordered materials furnished by Accurate, the defendants assert that Accurate’s argument is illogical, without factual support, and, if accepted, would render § 573.15 meaningless. The defendants assert that “order,” as in “ordered materials,” is used in the statute in a specific sense, not in a general or colloquial one, and that the statute requires specific forms of notice, not merely “notice” from observation of a subcontractor providing materials.

ii. Analysis. This court’s determination of whether or not § 573.15 is applicable here depends, in large part, on the proper interpretation of that provision. This court recently summarized Iowa’s rules of statutory interpretation, as follows:

As the Iowa Supreme Court has recently explained,

When confronted with the task of determining the meaning of a statute, we have stated:

The goal of statutory construction is to determine legislative intent. We determine legislative intent from the words chosen by the legislature, not what it should or might have said. Absent a statutory definition or an established meaning in the law, words in the statute are given their ordinary and common meaning by considering the context within which they are used. Under the guise of construction, an interpreting body may not extend, enlarge or otherwise change the meaning of a statute.

Auen v. Alcoholic Beverages Div., 679 N.W.2d 586, 590 (Iowa 2004) (citations omitted). The interpretation of a statute requires an assessment of the statute in its entirety, not just isolated words or phrases. State v. Young, 686 N.W.2d 182, 184-85 (Iowa 2004). Indeed, “we avoid interpreting a statute in such a way that portions of it become redundant or irrelevant.” T & K Roofing Co. v. Iowa Dep’t of Educ., 593 N.W.2d 159, 162 (Iowa 1999) (citation omitted). We look for a reasonable interpretation that best achieves the statute’s purpose and avoids absurd results. Harden v. State, 434 N.W.2d 881, 884 (Iowa 1989). Thus, the court’s role is, first, to determine whether the meaning of the statute is plain, and if so, to give effect to that plain meaning. See State v. Public Employment Relations Bd., 744 N.W.2d 357, 360-61 (Iowa 2008) (“When we interpret a statute, our primary goal is to ascertain the legislature’s intent. State Pub. Defender v. Iowa Dist. Ct., 663 N.W.2d 413, 415 (Iowa 2003). To determine the legislature’s intent, we first examine the language of the statute. Id. ‘If the statutory language is plain and the meaning clear, we do not search for legislative intent beyond the express terms of the statute.’ Horsman v. Wahl, 551 N.W.2d 619, 620-21 (Iowa 1996).”); Birchansky Real Estate, L.C. v. Iowa Dep’t of Public Health, 737 N.W.2d 134, 139 (Iowa 2007) (“ ‘If the statute’s language is clear and unambiguous, we apply a plain and rational meaning consistent with the subject matter of the statute.’ ”) (quoting ABC Disposal Sys., Inc. v. Dep’t of Natural Res., 681 N.W.2d 596, 603 (Iowa 2004)).

Schadendorf v. Snap-On Tools Corp., 757 N.W.2d 330, 337-38 (Iowa 2008).

Farmers Coop. Co. v. Swift Pork Co., 602 F.Supp.2d 1095, 1107-08 (N.D.Iowa 2009).

The provision this court must interpret here, Iowa Code § 573.15, entitled “exception,” with the language that the court must interpret first highlighted, provides as follows:

No part of the unpaid fund due the contractor shall be retained as provided in this chapter on claims for material furnished, other than materials ordered by the general contractor or the general contractor’s authorized agent, unless such claims are supported by a certified statement that the general contractor had been notified within thirty days after the materials are furnished or by itemized invoices rendered to contractor during the progress of the work, of the amount, kind, and value of the material furnished for use upon the said public improvement, and no part of such unpaid fund due the contractor shall be retained as provided in this chapter because of the commencement of any action by the contractor against the state department of transportation under authority granted in section 613.11.

Iowa Code § 573.15 (emphasis added). The Iowa Supreme Court has observed that, at least as to other language in this provision, “the statutory language is not a model of clarity.” Lumberman’s Wholesale Co. v. Ohio Farmers Ins. Co., 402 N.W.2d 413, 416 (Iowa 1987) (interpreting the “during the progress of the work” language). This court might make the same observation about the phrase “on claims for material furnished” in this statute.

Nevertheless, the court does not conclude that this language is necessarily ambiguous, nor is the court wholly without guidance from Iowa courts on the meaning of this language. The Iowa Supreme Court has interpreted language in § 573.15 on more than one occasion, as well as other provisions of Chapter 573. In addition, the Iowa Supreme Court has noted, “In resolving questions under Iowa Code chapter 573, we have looked to the federal interpretation of the Miller Act, 40 U.S.C. sections 270(a)-(d) (1982), the federal counterpart of Iowa Code chapter 573.” Iowa Supply Co. v. Grooms & Co. Constr., Inc., 428 N.W.2d 662, 665 (Iowa 1988). The Iowa Supreme Court has noted, however, that federal cases interpreting comparable provisions of the Miller Act are not binding as to the interpretation of the Iowa statute. Id.

Accurate asserts that the Iowa Supreme Court settled the precise question of the meaning of the language at issue here in First Federal State Bank v. Town of Malvern, 270 N.W.2d 818 (Iowa 1978). In Town of Malvern, the Iowa Supreme Court interpreted the meaning of the phrase “on claims for material furnished” also at issue here, as follows:

Section 573.15, by the phrase just quoted, refers only to the claims of material-men. The claims of materialmen (as well as laborers) were, of course, the subject with which Sinclair [Refining Co. v. Burch, 235 Iowa 594, 16 N.W.2d 359 (1944),] dealt. The section simply has no application to a dispute between the town and the contractor over progress payments which are earned before the contractor’s default. Nothing in chapter 573 would apply to this dispute. This conclusion is not surprising, in light of chapter 573’s title: Labor and Material on Public Improvements.

Town of Malvern, 270 N.W.2d at 822. Thus, Town of Malvern appeared to distinguish among “materialmen,” “laborers,” “the town,” and “the contractor,” and expressly stated that the phrase “on claims for material furnished” in § 573.15 “refers only to the claims of materialmen.”

The defendants contend, however, that Town of Malvern does not stand for the proposition that § 573.15 applies only to claims of materialmen, that it is not even a Chapter 573 case, and that, in any event, it has been overruled by subsequent case law. The defendants assert that the court in Town of Malvern found that “[n]othing in chapter 573 would apply to this dispute,” so that, if there were no Chapter 573 claims at issue in the case, the question of whether § 573.15 applies only to materialmen was not before the court. Thus, in the defendants’ view, Town of Malvern stands only for the “unremarkable” proposition that § 573.15 is inapplicable to disputes between owners and prime contractors over progress payments, and any other comments are merely dicta.

The Iowa Supreme Court has recognized that language is not dicta if it is “material, relevant, necessary, and essential to the ... judgment” in question. See Westendorf v. Wehling, 611 N.W.2d 512, 514 (Iowa 2000). There can be little doubt that the determination of the scope of § 573.15 — to what it did apply — was material, relevant, necessary, and essential to the Iowa Supreme Court’s determination in Town of Malvern that the provision did not apply to a dispute between the town and the contractor over progress payments. Thus, contrary to the defendants’ contentions, Town of Malvern does stand for the proposition that the phrase “on claims for material furnished” in § 573.15 “refers only to the claims of materialmen.”

The defendants also assert that, even if the statement in Town of Malvern on which Accurate relies is not dicta, it has been overruled by the Iowa Supreme Court’s later decision in Lumberman’s. Accurate argues, to the contrary, that Lumberman’s actually supports its reading of the statute as applicable only to the claims of material suppliers. Thus, this court must determine just what Lumberman’s says.

The pertinent part of the Lumberman’s decision, at least in the first instance, is the following:

Lumberman’s urges that we recognized in Cities Service Oil Co. v. Longerbone, 232 Iowa 850, 6 N.W.2d 325 (1942), that, if at least one claim triggers a retainage of funds under chapter 573, other claimants can thereafter participate in a suit to recover against that retainage or the general contractor’s surety, even though the other claimants did not file their claims within the statutory period or commence an action within the time provided by Iowa Code section 573.16 (1983). Lumberman’s refers to this principle as “piggybacking.”

Our review of the Longerbone decision suggests that the type of “piggybacking” which was permitted should be limited to claims of persons or entities who have contracted directly with the general contractor. As to such claims, it does not extend the general contractor’s liability to permit claims against funds owed the general contractor which have been retained by the public corporation as a result of claims filed by other parties. The general contractor is liable for such claims in any event under general principles of contract law. The timely filing claimants are not prejudiced because they will receive any deficiency from the general contractor’s surety.

A different situation prevails, however, with respect to claims on behalf of subcontractors or material suppliers who do not have contracts with the general contractor. Failure to require the latter type of claimant to file timely claims or to comply with the notice requirement of section 57S.15 would serve to extend the liability of the general contractor beyond that established by either the statutory scheme or the contractor’s contractual liability. We conclude the court of appeals was correct in holding that Lumberman’s should not be permitted to join in a claim against the retainage generated by claims filed by Riverview Products, Inc. or Parkview Company.

Lumberman’s Wholesale Co., 402 N.W.2d at 415 (emphasis added).

Accurate reads this part of the decision, especially the italicized portion in the third quoted paragraph, as distinguishing between “subcontractors,” on the one hand, and “material suppliers who do not have contracts with the general contractor” on the other, and, thus, requiring § 573.15 notice only from “material suppliers” as necessary to protect general contractors, but not requiring such notice from “subcontractors.” Accurate argues that, because it was a “subcontractor,” that is, an entity that provided both labor and material, Lumberman’s actually leaves it out of the set of entities that must provide § 573.15 notice. The defendants read the same language as identifying one group, “subcontractors or material suppliers who do not have contracts with the general contractor,” as the kinds of entities who must provide § 573.15 notice to protect general contractors.

The court agrees with the defendants that “the latter type of claimant” in the third paragraph quoted above is a single group of claimants identified in the third paragraph as “subcontractors or material suppliers who do not have contracts with the general contractor,” as distinguished from what would be the former type of claimant identified in the second paragraph quoted above as “persons or entities who have contracted directly with the general contractor.” Id. Thus, Lumberman’s holds that “persons or entities who have contracted directly with the general contractor” may “piggyback” their claims against the retainage onto the claims of any other such entities that made timely claims against the retainage, even if they did not file their claims within the statutory period or commence an action within the time provided by Iowa Code § 573.16, but “subcontractors or material suppliers who do not have contracts with the general contractor” may not “piggyback” their claims against the retainage onto timely claims of other entities against the retainage. See id.

It would require mental gymnastics too tortuous for the court to attempt to conclude that the determination of entities to which § 573.15 applies in Lumberman’s is not as material, relevant, necessary, and essential to the Iowa Supreme Court’s judgment in that case as the determination of the entities to which § 573.15 applies in Town of Malvern, such that the determination in Lumberman’s is merely dicta, but the determination in Town of Malvern is not. See Westendorf 611 N.W.2d at 514 (a determination is not dicta if it is material, relevant, necessary, and essential to the court’s judgment). It is, at best, lukewarm comfort to note, as Accurate does, that in Lumberman’s, it was not necessary for the court to determine whether § 573.15 applies to “subcontractors,” because the claimant in that case was only a supplier of materials to a subcontractor, not an entity that also or only provided labor, ie., what Accurate calls a “subcontractor.” See Lumberman’s Wholesale Co., 402 N.W.2d at 414 (describing the claimant as “an unpaid supplier of building materials to a subcontractor on a public improvement project”). There was, after all, also no “subcontractor,” and for that matter, no “material supplier,” in Town of Malvern. Town of Malvern, 270 N.W.2d at 819 (describing the action as “a contest between the surety of a contractor who defaulted in the performance of a public construction project and the bank to which the contractor assigned its contract rights”) & 822 (finding that § 573.15 “simply has no application to a dispute between the town and the contractor over progress payments”).

The court is then left with the problem that the determination in Lumberman’s that § 573.15 applies to “subcontractors ... who do not have contracts with the general contractor,” as well as to “material suppliers who do not have contracts with the general contractor,” appears to conflict with the prior determination of the same court in Town of Malvern that § 573.15 applies only to “materialmen,” apparently as distinguished from “laborers,” “the town,” and “the contractor.” The decision in Lumberman’s does not even mention its prior interpretation of the entities to which § 573.15 applies in Town of Malvern in its analysis of that question. See Lumberman’s Wholesale Co., 402 N.W.2d at 415. This omission seems particularly odd, where, in a later part of the decision in Lumberman’s interpreting the phrase “during the progress of the work,” the Iowa Supreme Court dismissed the relevance of another case interpreting § 573.15, Economy Forms Corp. v. City of Cedar Rapids, 340 N.W.2d 259, 264 (Iowa 1983), asserted by one of the parties, on the ground that “[t]he issue of interpretation of section 573.15 presented in the present case was not before the court in Economy Forms,” so that “the language utilized in referring to the statute in that case does not aid in the determination of its meaning in the present case.” Lumberman’s Wholesale Co., 402 N.W.2d at 415-16. The omission becomes even more strange, considering the very small pool of cases even mentioning § 573.15 (or its predecessors). This court is reluctant to conclude that, in Lumberman’s, the Iowa Supreme Court overruled sub silentio the interpretation of the pertinent part of § 573.15 in Town of Malvern. Far more likely explanations would be that the court in Lumberman’s simply overlooked its pri- or decision in Town of Malvern or did not perceive Town of Malvern to be contrary to its conclusion.

This court concludes that the apparent conflict between Town of Malvern and Lumberman’s disappears when the court considers that the decision in