United States of America v. Berkley Insurance Company et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
UNITED STATES OF AMERICA
for the use and benefit of
Philip J. Freeman,
)
)
)
)
Plaintiff, 	)
)
v. 	) 	Case No. 4:25-cv-00643-SRC
)
BERKLEY INSURANCE
COMPANY et al.,
Defendants.
)
)
)
)
Memorandum and Order
Someone owes Philip Freeman money. The issue in this case is who. For now—not
Berkley and North Wind. The United States, for the use and benefit of Freeman, sued
(i) Berkley, (ii) North Wind, (iii) Elite Trucking, and (iv) Michael Null. Freeman asserts a Miller
Act claim against Berkley and North Wind, and breach-of-contract and unjust-enrichment claims
against Elite Trucking and Null. Berkley and North Wind moved to dismiss Freeman’s Miller
Act claim. And for the reasons stated below, the Court grants Berkley and North Wind’s motion.
I. 	Background
A. 	Factual background
The Court accepts the following well-pleaded facts as true for purposes of this
Memorandum and Order. The U.S. Army Corps of Engineers awarded North Wind with a
contract to close a landfill around Fort Leonard Wood, Missouri. Doc. 1 at ¶¶ 13–14. So, as
required by the Miller Act, see 40 U.S.C. § 3131(b), North Wind obtained a payment bond from
Berkley to secure payment for all materials and services provided by those in a direct
relationship with North Wind or a subcontractor of the principal. See doc. 1 at ¶ 31; see also
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doc. 1-2 at 1 (The Court cites to page numbers as assigned by CM/ECF.). North Wind then
contracted with Arrowhead as the “primary subcontractor” to close the landfill. Doc. 1 at ¶ 15.
But to close a landfill, you need, predictably, “dirt—a lot of dirt.” Doc. 26 at 2; see also
doc. 1 at ¶ 17. So Arrowhead contracted with Elite Trucking and Null to provide the dirt. Id. at
¶ 18. Elite Trucking and Null in turn orally contracted with Freeman to harvest dirt from his dirt
farm. Id. at ¶¶ 19–22. For every 10-yard load of dirt that Elite Trucking and Null harvested,
they agreed to pay Freeman $85.00. Id. at ¶ 21. After harvesting 29,078 yards of dirt, Elite
Trucking and Null owed Freeman $247,163.00. Id. at ¶ 24. But Elite Trucking and Null never
paid Freeman for the harvested dirt. Id. at ¶ 25.
At some point Arrowhead realized that Elite Trucking was not providing the dirt
necessary to finish closing the landfill. Id. at ¶ 27. So, Arrowhead directly contracted with
Freeman to provide the remaining dirt and paid accordingly. Id. at ¶¶ 27–28. But Freeman
remained unpaid for the original 29,078 yards of dirt harvested from his land by Elite Trucking
and Null. Id. at ¶ 37.
On November 6, 2024, Freeman sent a written demand to Northwinds Engineering, LLC
(not North Wind), and to Arrowhead, seeking payment. See id. at ¶ 38; see also doc. 1-3; Fed. R.
Civ. Proc. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the
pleading for all purposes.”). A week later, Freeman sent another demand letter, this time to
North Wind. See doc. 1 at ¶ 39; see also doc. 1-4. But Freeman remains unpaid. Doc. 1 at ¶ 47.
Freeman therefore seeks compensation under the payment bond Berkley issued to North
Wind. Id.
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B. 	Procedural background
Freeman filed his complaint on May 6, 2025. See doc. 1. He asserts one Miller Act
claim against Berkley and North Wind. See doc. 1 at ¶¶ 33–34. And he alleges
breach-of-contract and unjust-enrichment claims against Elite Trucking and Null. See id. at
¶¶ 50–59, 60–65. Each of Freeman’s claims seek, at a minimum, payment for the $247,163.00
owed to him for the dirt harvested from his land. See id. at 8, 10, and 11. Berkley and North
Wind moved to dismiss Freeman’s Miller Act claim. Doc. 14. Freeman filed his response, doc.
26, and Berkley and North Wind filed their reply, doc. 33. In between the response and reply,
Freeman filed a motion for a default judgment against Elite Trucking and Null. Doc. 31. But
having reviewed the parties’ briefing, and to avoid any risk of inconsistent judgments, the Court
first rules on Berkley and North Wind’s motion to dismiss.
II. 	Legal standard
Under Rule 12(b)(6), a party may move to dismiss a claim for “failure to state a claim
upon which relief can be granted.” The notice pleading standard of Rule 8(a)(2) requires a
plaintiff to give “a short and plain statement . . . showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2). To meet this standard and to survive a Rule 12(b)(6) motion to dismiss,
“a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This requirement of facial plausibility means the
factual content of the plaintiff’s allegations must “allow[] the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Whitney v. Guys, Inc., 700
F.3d 1118, 1128 (8th Cir. 2012) (quoting Iqbal, 556 U.S. at 678). The Court must grant all
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reasonable inferences in favor of the nonmoving party. Lustgraaf v. Behrens, 619 F.3d 867,
872–73 (8th Cir. 2010).
When ruling on a motion to dismiss, a court “must liberally construe a complaint in favor
of the plaintiff.” Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853, 862 (8th Cir.
2010). But if a claim fails to allege one of the elements necessary to recover on a legal theory,
the Court must dismiss that claim for failure to state a claim upon which relief can be granted.
See Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011). “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal,
556 U.S. at 678 (citing Twombly, 550 U.S. at 555). Nor does a “pleading that merely pleads
‘labels and conclusions,’ or a ‘formulaic recitation’ of the elements of a cause of action, or
‘naked assertions’ devoid of factual enhancement” suffice. Hamilton v. Palm, 621 F.3d 816,
817–18 (8th Cir. 2010) (quoting Iqbal, 556 U.S. at 678). Although courts must accept all factual
allegations as true, they are not bound to take as true a legal conclusion couched as a factual
allegation. See Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 677–78.
Only a complaint that states a plausible claim for relief survives a motion to dismiss.
Iqbal, 556 U.S. at 678. Therefore, the Court must determine if the well-pleaded factual
allegations “plausibly give rise to an entitlement to relief.” Id. at 679. This “context-specific
task” requires the Court to “draw on its judicial experience and common sense.” Id.
III. 	Discussion
Berkley and North Wind moved to dismiss Freeman’s Miller Act claim for failure to state
a claim on which the Court can grant relief. See doc. 14; Fed. R. Civ. P. 12(b)(6). They argue
that (i) Freeman is an improper Miller Act claimant and (ii) he did not provide North Wind with
proper notice as the Miller Act requires. Id. at 1–2. But because the Court agrees that Freeman
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cannot obtain relief under the Miller Act, the Court need not address the notice issue. The Court
therefore grants Berkley and North Wind’s motion to dismiss.
A. 	Freeman fails to plausibly allege that he is a proper Miller Act claimant
Berkley and North Wind argue that Freeman improperly claims relief under the Miller
Act, because he’s too far removed from North Wind (the prime contractor) to collect on the
payment bond. See doc. 14-1 at 2. Freeman argues that text and precedent support a broader
reading of the Miller Act that includes him as a proper claimant. See doc. 26 at 5–7.
Alternatively, Freeman argues that the parties should flesh out the remoteness issue during
discovery. See doc. 26 at 9–10. But for the reasons stated below, Freeman’s complaint fails to
plausibly allege that he is a proper Miller Act claimant.
The Miller Act ensures that those who work on federal construction projects get paid for
their work. The Act requires that every government contractor, where the contract exceeds
$100,000, give a “payment bond” with a “surety . . . for the protection of all persons supplying
labor and material” under the contract. 40 U.S.C. § 3131(b)(2); see also Clifford F. MacEvoy
Co. v. United States ex rel. Calvin Tomkins Co., 322 U.S. 102, 106 (1944). The Act gives a right
to sue to:
Every person that has furnished labor or material in carrying out work provided for
in a contract for which a payment bond is furnished under section 3131 of this title
and that has not been paid in full within 90 days after the day on which the person
did or performed the last of the labor or furnished or supplied the material for which
the claim is made may bring a civil action on the payment bond for the amount
unpaid at the time the civil action is brought and may prosecute the action to final
execution and judgment for the amount due.
40 U.S.C. § 3133(b)(1). Though Congress drafted the Act to be broad and “highly remedial,” the
Act, by its plain terms, also significantly limits the right to sue. See Clifford F. MacEvoy Co.,
322 U.S. at 107. As relevant here, the Act limits the right to sue as follows:
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A person having a direct contractual relationship with a subcontractor but no
contractual relationship, express or implied, with the contractor furnishing the
payment bond may bring a civil action on the payment bond on giving written
notice to the contractor within 90 days from the date on which the person did or
performed the last of the labor or furnished or supplied the last of the material for
which the claim is made.
40 U.S.C. § 3133(b)(2). In sum, section 3133 clarifies that the right to sue is limited to:
(i) materialmen, laborers, and subcontractors that deal directly with the prime contractor and
(ii) those same individuals who—while not having any contractual relationship with the prime
contractor—have a direct contractual relationship with a subcontractor and gives notice of their
claim to the prime contractor. See 40 U.S.C. § 3133(b)(1)–(2); see also Clifford F. MacEvoy
Co., 322 U.S. at 107–08. The limitation serves to prevent those in “more remote relationships,”
that is, anyone beyond a sub-subcontractor (i.e., an entity hired by a subcontractor to perform the
subcontractor’s assigned work), from recovering on the payment bond. Clifford F. MacEvoy
Co., 322 U.S. at 107–08.
But who is a subcontractor? The Supreme Court held that “a subcontractor is one who
performs for and takes from the prime contractor a specific part of the labor or material
requirements of the original contract.” Id. at 109. The Supreme Court later required that a
subcontractor also have a “sufficiently substantial and important” relationship to the prime
contractor to justify treatment as a subcontractor. United States ex rel. Morris Const., Inc. v.
Aetna Cas. Ins. Co., 908 F.2d 375, 377 (8th Cir. 1990) (citing F. D. Rich Co. v. United States ex
rel. Indus. Lumber Co., 417 U.S. 116, 123–124 (1974)). The Court reasoned that if a
subcontractor has a sufficiently substantial and important relationship with the prime contractor,
“the prime contractor could have easily protected itself from liability by requiring bond security
or other protection.” Id. (cleaned up). And if the prime contractor failed to easily protect itself,
courts won’t penalize a subcontractor by preventing recovery on the payment bond. See id.
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Thus, a subcontractor is one who: (i) “contracted to supply labor or material to the prime
contractor,” and (ii) “plays a sufficiently substantial role in the construction project that the
general contractor could have negotiated to have the subcontractor assume the risk of the
subcontractor’s default.” United States ex rel. Morris Const., 908 F.2d at 377. And to reiterate,
the Miller Act protects subcontractors and sub-subcontractors, but not those in a more remote
relationship to the prime contractor. J.W. Bateson Co. v. United States ex rel. Bd. of Trs. of Nat.
Automatic Sprinkler Indus. Pension Fund, 434 U.S. 586, 594 (1978).
The question now becomes whether Freeman is a sub-subcontractor within the Miller
Act’s protection, or a sub-sub-subcontractor too remote from the prime contractor to warrant the
Act’s protection. The answer depends on which version of Freeman’s facts one relies on. If the
Court takes just the facts as alleged in the complaint as true, Freeman’s claim fails. The U.S.
Army Corps of Engineers awarded North Wind with the contract; North Wind was the prime
contractor. Doc. 1 at ¶¶ 13–14. North Wind then contracted with Arrowhead as the “primary
subcontractor” to close the landfill. Id. at ¶ 15. And Arrowhead in turn contracted with Elite
Trucking and Null to provide the dirt. Id. at ¶ 18. Then Elite Trucking and Null orally
contracted with Freeman to harvest dirt from his land. Id. at ¶¶ 19–22. That makes Elite
Trucking and Null sub-subcontractors and Freeman a remote sub-sub-subcontractor that falls
outside of the Miller Act’s ambit.
But in his response to the motion, doc. 26, Freeman makes a saving argument.
Remember: at some point Arrowhead determined that Elite Trucking and Null weren’t fulfilling
their end of the contract. Doc. 1 at ¶¶ 27–28. So Arrowhead directly contracted with Freeman to
provide the remaining dirt and paid accordingly. Id. From the complaint’s face, the Court
reasonably inferred that Arrowhead entered into contracts with two different sub-subcontractors.
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First, Arrowhead contracted with Elite Trucking and Null, doc. 1 at ¶ 18, and Elite Trucking and
Null then contracted with Freeman, doc. 1 at ¶ 20. Then separately, Arrowhead went around
Elite Trucking and Null and “contracted directly” with Freeman to finish closing the landfill. Id.
at ¶ 27.
But according to Freeman’s response brief, he only ever had one contract: “to harvest
and supply dirt . . . much like an open account with both Null and Arrowhead authorized to draw
upon.” Doc. 26 at 7. In this version, Arrowhead became frustrated with Elite Trucking and Null,
so Arrowhead “simply went around Null and directly to Freeman to procure the last of the dirt
needed to complete the Project.” Id. at 8. And Arrowhead paid Freeman for this part of the
contract. Doc. 1 at ¶¶ 27–28. Under this version of events, North Wind (the prime contractor)
contracted with Arrowhead (the subcontractor), and Arrowhead contracted with Freeman (the
sub-subcontractor). Thus, according to this version, Freeman is within the Act’s ambit.
And what about Freeman’s Complaint that states that “[a]fter Arrowhead was unable to
secure from Null and Elite the remaining dirt necessary to complete the Landfill Project,
Arrowhead contracted directly with [Freeman]”? Doc. 1 at ¶ 27. Freeman responds,
“[r]easonably, the Court can infer there was one open account contract.” Doc. 26 at 8. But the
Court cannot consider facts not alleged in the complaint. Noble Sys. Corp. v. Alorica Cent.,
LLC, 543 F.3d 978, 982 (8th Cir. 2008). And though some exceptions to that rule exist, see id.,
none are relevant here. Further, Freeman may not amend his complaint in a brief. Thomas v.
United Steelworkers Loc. 1938, 743 F.3d 1134, 1140 (8th Cir. 2014).
From the face of Freeman’s Complaint, the Court can reasonably infer only that two
separate contracts existed with Freeman. North Wind and Arrowhead refused to pay Freeman
for the amount that Elite Trucking and Null owed him. Doc. 1 at ¶¶ 42–44. Yet when it came to
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the second contract for the remaining dirt, Arrowhead paid Freeman. Doc. 1 at ¶¶ 27–28; see
doc. 1-1 (showing a purchase order signed September 24, 2024); see also doc. 1-8 (showing a
statement directly from Freeman to Arrowhead on September 30, 2024). The Court can only
draw these reasonable inferences from the complaint: Arrowhead originally sub-subcontracted
with Elite Trucking and Null, not with Freeman. Doc. 1 at ¶ 18. And Elite Trucking and Null
then further subcontracted with Freeman to harvest his dirt. Id. at. ¶ 20. But when Elite
Trucking and Null failed to supply the dirt necessary to close the landfill, Arrowhead then
separately and directly contracted for the remaining dirt with Freeman and paid accordingly. Id.
at ¶¶ 27–28. And so, as a remote sub-sub-subcontractor on the original contract, Freeman fails to
plausibly state a claim under the Miller Act. See 40 U.S.C. § 3133(b)(1)–(2); see also Clifford F.
MacEvoy Co., 322 U.S. at 107–08; J.W. Bateson Co., 434 U.S. at 594.
IV. 	Conclusion
Accordingly, the Court grants Berkley and North Wind’s [14] motion to dismiss. The
Court notes that Freeman—in his response brief—requests leave to amend his complaint if the
Court granted Berkley and North Wind’s motion. Doc. 26 at 13–14. But statements inserted
into a response brief are not motions. See Fed. R. Civ. P. 7(b).
So ordered this 13th day of January 2026.
STEPHEN R. CLARK
CHIEF UNITED STATES DISTRICT JUDGE
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