UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

AT KNOXVILLE

UNITED STATES OF AMERICA for )

the use of RAGAN MECHANICAL, )
INC., )
)
Plaintiff, )
) Docket No. 3:11-cv-00199
vs. )
)
APPLIED ENERGY MANAGEMENT, )
INC., )
)
Defendant/Counter Plaintiff, )
)
and WESTCHESTER FIRE )
INSURANCE COMPANY, )
)
Defendant. )

COUNTERCLAIM

Come the Defendant, APPLIED ENERGY MANAGEMENT, INC., by and through

counsel, pursuant to Rule 13 of the Federal Rules of Civil Procedure and files its counterclaim

against Ragan Mechanical, Inc. as follows:

1. That prior to November 1, 2009, Counter-Plaintiff, Applied Energy Management,

Inc., entered into a contract with Johnson Controls, Inc. concerning construction at the Oak

Ridge National Laboratory- Melton Valley Steam Plant Project. That under the terms and

conditions of the contract between Counter-Plaintiff and Johnson Controls, Inc., Johnson

Controls, Inc. had the authority to assess contractual damages against Applied Energy

Management, Inc. as a result of delays in the project completion and lost construction period

savings.

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 2. On or about November 1, 2009 the Counter-Plaintiff, Applied Energy

Management, Inc., entered into a subcontract with the Counter – Defendant, Ragan Mechanical,

Inc. concerning a portion of the construction at the Oak Ridge National Laboratory- Melton

Valley Steam Plant Project as defined by a Scope of Work and Change Orders. A complete

copy of the Subcontract and Change Orders are attached hereto as Exhibit A.

3. That under the terms and conditions of the Subcontract agreement between

Counter-Plaintiff and Counter-Defendant, the following is provided:

Paragraph 24. Subcontractor shall be liable to contractor for any damages

suffered by contractor by reason of such delay and contractor shall and
may deduct the amount of such damages out of money which may be due
or become due under this contract.
4. That as a result of project delays and lost construction period savings caused by

the Counter-Defendant, Johnson Controls, Inc. assessed contractual damages against Applied

Energy Management, Inc.

5. That damages assessed by Johnson Controls, Inc. against Applied Energy

Management, Inc. as a result of project delays and lost construction period savings were directly

and proximately caused by Counter-Defendant’s failure to maintain the project schedule and

failure to complete the Melton Valley Steam Plant Project within the time frame defined by the

Subcontract agreement.

6. As a direct and proximate result of the negligence and breach of contract by

Counter-Defendant, Counter Plaintiff experienced compensatory damages all for which the

Counter-Defendant is liable to the Counter-Plaintiff.

7. Pursuant to the terms of the Subcontract agreement between the Counter-Plaintiff

and Counter-Defendant, the following is provided:

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 If either party is required to commence legal proceedings to enforce any
provisions of this Agreement or to protect its interest in any manner arising under
this Agreement, the party prevailing in such proceedings shall be entitled to
reimbursement for all reasonable costs and expenses, including attorney’s fees,
included in such proceeding. Any dispute concerning the amount of such fees,
costs and expenses to which the prevailing party is entitled shall be independent
of the dispute that gave rise to the entitlement and its resolution shall be subject to
the disputes clause of this Agreement.
8. That as a result of the Counter-Defendant’s negligence and breach of contract, the

Counter-Plaintiff has incurred attorney’s fees in an effort to protect the Counter-Plaintiff’s

interests in all manners arising from the subcontract agreement.

WHEREFORE, the Counter-Plaintiff prays as follows:

a. that Counter-Defendant be required to answer this Counter-Complaint

according to law;

b. that the Counter-Plaintiff be awarded compensatory damages in an amount

not to exceed $500,000.00 plus prejudgment interest as provided by law, reasonable attorney’s

fees incurred, and all reasonable costs and expenses incurred by Applied Energy Management,

Inc. in this action.

Respectfully submitted,

TRAMMELL, ADKINS & WARD, P.C.

s/ Terrill L. Adkins
Terrill L. Adkins, BPR #013138
Attorney for Defendants
P.O. Box 51450
Knoxville, Tennessee 37950
865/330-2577

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 CERTIFICATE OF SERVICE

I hereby certify that on 5-26-2011 a copy of the foregoing pleading was filed
electronically. Notice of this filing will be sent by operation of the court’s electronic filing
system to all parties indicated on the electronic filing receipt. All other parties will be served by
regular U.S. mail. Parties may access this filing through the Court’s electronic filing system.

TRAMMELL, ADKINS & WARD, P.C.

s/ Terrill L. Adkins
Terrill L. Adkins

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