United States District Court, W.D. Virginia, Charlottesville Division
AMERICAN DEMOLITION AND NUCLEAR DECOMMISSIONING, INC., Plaintiff,
THE IBCS GROUP, INC., EDMUND C. SCARBOROUGH, and STEVEN A. GOLIA, Defendants
For American Demolition and Nuclear Decommissioning, Inc., Plaintiff: Daniel C. Wennogle, LEAD ATTORNEY, PRO HAC VICE, Stinson Leonard Street LLP, Greenwood Village, CO; Seth Adam Robbins, Stinson Leonard Street LLP, Washington, DC.
For The IBCS Group, Inc., Edmund C. Scarborough, Steven A. Golia, Defendants: David W. Thomas, LEAD ATTORNEY, MICHIE HAMLETT LOWRY RASMUSSEN & TWEEL PC, CHARLOTTESVILLE, VA; David Martin Buoncristiani, PRO HAC VICE, Jones Day, San Francisco, CA.
Hon. Glen E. Conrad, Chief United States District Judge.
In this diversity action, American Demolition and Nuclear Decommissioning, Inc. (" ADND" ) asserts a claim for false advertising under Virginia law. The case is presently before the court on ADND's motion for summary judgment. For the reasons that follow, the motion will be granted.
ADND is a New York corporation that provides demolition, decommissioning, and environmental remediation services. In 2009, the company submitted a bid to perform demolition work at a nuclear facility in South Carolina known as the Savannah River Site (" SRS" ). Because the nuclear facility is owned by the United States Department of Energy, ADND was required to furnish a performance and payment bond that complied with the requirements of the Federal Acquisition Regulations (" FAR" ).
ADND had previously obtained bonds for construction projects from Edmund C. Scarborough, an individual surety, and his risk management company, The IBCS Group (" IBCS" ). Upon learning of ADND's plans to bid on the SRS project, IBCS's Executive Vice President, Steven A. Golia, expressed an interest in providing the necessary bond.
During the parties' discussions, William Schaab, the Vice President and Secretary of ADND, emphasized that ADND needed to procure a bond that would have a high chance of being approved by the federal government. Golia encouraged Schaab to review a brochure that IBCS had recently published and posted on its website, which might address Schaab's concerns. The
brochure includes the following representations:
. . . To back the bond dollar for dollar, some individual sureties, such as Scarborough, utilize Irrevocable Trust Receipts (" ITR" ), a financial instrument widely recognized in the financial world and used by the Government and private businesses for a variety of purposes, as their vehicle to pledge the assets to the particular bond.
. . .
Individual sureties are specifically recognized by the Federal Acquisition Regulation (" FAR" ). Properly issued bonds are fully compliant with the FAR. . . .Individual surety bonds have been accepted by, among others, the Department of Justice, Federal Bureau of Prisons, the General Services Administration, Department of the Air Force, Department of Veterans Affairs and Naval Facilities Engineering Command.
(Brochure at 3.) The brochure also contains a Question and Answer section, which provides, in pertinent part, as follows:
Q. Is your company T-Listed?
A. This means approved by the federal Treasury department on their document " Circular 570." For corporate sureties, this is an important part of their credentials -- the ability to show they are capable of gaining the acceptance of the federal government. We are proud of the fact that our bonds have been repeatedly accepted by the federal government in multi-million dollar amounts. However, since Circular 570 only lists corporate sureties, the fact that we are accepted is not ...