United States v. Montgomery

• Decision Date: 31 July 1959
• Docket Number: No. 12897.,12897.
• Court: U.S. Court of Appeals — Third Circuit
• Parties: UNITED STATES of America, for the Use of James R. SODA, Appellee v. Charles B. MONTGOMERY, T/A Montgomery Construction Company and U. S. Fidelity & Guarantee Company, Appellants.

269 F.2d 752 (1959)

UNITED STATES of America, for the Use of James R. SODA, Appellee v. Charles B. MONTGOMERY, T/A Montgomery Construction Company and U. S. Fidelity & Guarantee Company, Appellants.

No. 12897.

United States Court of Appeals Third Circuit.

Argued July 13, 1959.

Decided July 31, 1959.

John R. Lenahan, Scranton, Pa. (John V. Wherry, Wherry & Ketler, Grove City, Pa., on the brief), for appellants.

L. M. Cailor, Youngstown, Ohio (John H. Bream, Harrisburg, Pa., on the brief), for appellee.

Before McLAUGHLIN and KALODNER, Circuit Judges, and FORMAN, District Judge.

McLAUGHLIN, Circuit Judge.

At the first trial of this suit the defendants urged that plaintiff subcontractor was bound by the government contract with Montgomery, the primary contractor and therefore the latter did not owe Soda anything. They contended in addition that if Soda was not so bound, Montgomery owed him $10,876.41, not $13,871.41 as Soda asserted. Those issues were properly resolved by the trial court sitting without a jury and judgment was entered in favor of the plaintiff in the amount of his claim plus interest.

On appeal the defense that suit had been started more than a year after the date of the final settlement of the contract and so was barred by the Miller Act,¹ was actively urged for the first time though it did appear in the answer.

The opinion of this court² upheld the finding of the trial judge that there had been a separate contract between the parties and that the entire amount claimed by plaintiff was due him. However, because we concluded that the Miller Act time limit for this type of action was a condition precedent for its maintenance, we vacated the judgment and remanded the case for determination of "the true final settlement date of the contract."

At the second trial the defendants initially attempted to show that the final settlement date was on or about October 25, 1953, which would have made the commencement of the Soda suit too late. Further on in the course of the trial, after the Attorney Advisor of the Government General Accounting Office had testified, Montgomery, as stated by the trial judge in his opinion, "* * * nimbly changed his position from a contention that suit was filed too late, to the contention that suit was filed too soon." On this appeal the defense reverts to its earlier theory that plaintiff's action is outlawed by the statute. In line with this it asserts that the certificate of the Comptroller General determining the date of final settlement to have been May 6, 1954 is "* * * unsupported by substantial evidence, was determined arbitrarily by the Comptroller General and is therefore not binding upon the parties."

At a hearing on the matter after it had been returned to the district court, plaintiff, in accordance with Section 270c of the Miller Act,³ produced a certificate of the Comptroller General showing that the final settlement date of the contract involved was May 6, 1954. Under the statute the Comptroller General's certificate "* * * shall be conclusive as to such date upon the parties." The defense argued the statement must be supported by substantial evidence. The trial judge out of an abundance of caution held a full hearing.

At that hearing R. E. Green, a witness called on behalf of the defendants, who said he had been in charge of the construction of the contract in question and a delegated representative of the contracting officer, testified that on October 25, 1953 (on which date defendants contended the contract was finally settled) Montgomery had a claim pending with the government for additional compensation relative to a changed condition of the contract. The witness stated that as a consequence Montgomery was not fully paid out at that time.

The plaintiff called as a witness, Oscar K. Blanchard, Attorney Advisor in the General Accounting Office. He identified the Certificate of Final Settlement of May 6, 1954 to be "* * * our official certification as required by the Miller Act." He explained carefully and in detail the steps from which "The determination of final settlement is then made in the light of the facts so disclosed and in the light of the precedence (sic) precedents? which originated mostly under the predecessor or prior Herd Act." Talking of the suit contract account he stated, "The date on which that account was given approval by the administrative or agency official authorized to place it in line for payment is shown to be May 6, 1954."

Mr. Blanchard made it very clear that the changes encountered in connection with the Montgomery work were within the general scope of the original contract and permitted under Article 3 of the basic agreement. The main change order No. 6 was attached to the contract and covered changes to and extras for the...