Accent Store Design, Inc. v. Marathon House, Inc.

Decision Date24 April 1996
Docket NumberNos. 94-330-A,s. 94-330-A
Citation674 A.2d 1223
PartiesACCENT STORE DESIGN, INC., et al. v. MARATHON HOUSE, INC., et al. COLUMBUS DOOR CO. v. MARATHON HOUSE, INC., et al. ppeal, 94-464-Appeal.
CourtRhode Island Supreme Court
OPINION

LEDERBERG, Justice.

These consolidated cases came before the Supreme Court on the appeal of the plaintiffs, Accent Store Design, Inc. (Accent) and Columbus Door Company (Columbus), from a summary judgment entered in the Superior Court for the defendants, Marathon House, Inc. (Marathon) and Scott Wolf, in his official capacity as the Director of the Rhode Island Governor's Office of Housing, Energy and Intergovernmental Relations (GOHEIR). At issue in the appeal is whether a subcontractor has a cause of action against a public authority that fails to require a payment bond in connection with the authority's award of a contract to a general contractor pursuant to G.L.1956 (1990 Reenactment) § 37-13-14. For the reasons stated below, we deny and dismiss the appeal and affirm the judgment of the Superior Court.

Facts and Procedural History

The GOHEIR is a state agency within the executive department of state government authorized by G.L.1956 (1993 Reenactment) § 42-7-6 to accept any grants made available by the federal government and to enter into all necessary contracts and agreements related thereto. On or about December 7, 1989, the state through GOHEIR filed an application for federal assistance with the Department of Housing and Urban Development (HUD), requesting federal funds to assist Marathon, a nonprofit corporation, in establishing an expanded residential drug and alcohol-treatment facility. The application sought federal assistance to acquire, to renovate, and to furnish a public building on state-owned property; specifically, Marathon would own and use the building as a treatment facility.

Because GOHEIR "anticipate[d] granting to Marathon $975,000" upon GOHEIR'S receipt of the grant from HUD, GOHEIR and Marathon executed a Memorandum of Understanding in May 1990, followed in June 1990, by a grant agreement in the amount of $975,000 for the project. The agreement provided that GOHEIR would administer the grant in return for a $25,000 fee and identified Thunberg Industries, Inc. (Thunberg) as the general contractor for the project.

In October 1990, Accent and Columbus entered into separate subcontract agreements with Thunberg to perform work on the Marathon project. In November 1990, the property in question was deeded to Marathon by the state, although the deed was not recorded until September 1993.

In March 1991, Accent filed suit against Thunberg in Superior Court, alleging that Thunberg had breached its agreement with Accent by failing to pay Accent for the work, labor, and services it had supplied. At that time Accent did not pursue any claim against GOHEIR or Marathon. Accent received a judgment against Thunberg in the amount of $53,626.68. Thunberg, however, subsequently filed for bankruptcy pursuant to Chapter 7 of the Federal Bankruptcy Laws, and no payment or distribution was ever made to Accent.

Approximately two years after obtaining the judgment against Thunberg, Accent, and later Columbus, which had never filed suit against Thunberg, filed the instant actions against Marathon and GOHEIR. The complaints presented three causes of action against each defendant, namely, negligence for failure to comply with the Rhode Island Public Works statute, § 37-13-14; negligence for failure to comply with federal HUD regulations; and breach of a federal grant agreement in respect to the acceptance and use of federal funds from HUD.

Accent and both defendants filed motions for summary judgment in the Accent action. On May 10, 1994, the Superior Court entered judgment in favor of defendants and against Accent. On July 18, 1994, by stipulation of the parties, judgment was also entered for defendants and against Columbus. Both Accent and Columbus filed timely notices of appeal, pursuant to G.L.1956 § 9-24-1. On October 13, 1994, this Court assigned Accent's appeal to the regular calendar for full briefing and argument and one week later granted Columbus's motion to consolidate the cases.

Standard of Review

In its review of the granting of a motion for summary judgment, this Court applies the same rules and analysis as those applied by the trial justice. Mallane v. Holyoke Mutual Insurance Company in Salem, 658 A.2d 18, 19-20 (R.I.1995); Lawrence v. Anheuser-Busch, Inc.. 523 A.2d 864, 867 (R.I.1987). Accordingly, if our review of the admissible evidence viewed in the light most favorable to the nonmoving party reveals no genuine issues of material fact, and if we conclude that the moving party was entitled to judgment as a matter of law, we shall sustain the trial justice's granting of summary judgment. Mallane, 658 A.2d at 20; Providence Journal Co. v. Sundlun, 616 A.2d 1131, 1133 (R.I.1992). Moreover, a party who opposes a motion for summary judgment carries the burden of proving by competent evidence the existence of a disputed material issue of fact and cannot rest on allegations or denials in the pleadings or on conclusions or legal opinions. Manning Auto Parts, Inc. v. Souza, 591 A.2d 34, 35 (R.I.1991).

Failure to Comply with the Rhode Island Public Works Bonding Statute

The plaintiffs have urged this Court to concur with those jurisdictions that have interpreted their public works bonding statutes to provide a cause of action against public authorities that fail to require a bond on public works projects. The defendants, on the other hand, have argued that Rhode Island's public works bonding statute, § 37-13-14, does not provide a cause of action in the event that the state fails to require a contractor who has been awarded a public works contract to file a bond with the proper authority. We agree with defendants.

Section 37-13-14 1 provided that:

"(a) The state or any city, town, agency, or committee therein awarding contracts for public works shall require the contractor awarded a contract with a contract price in excess of one thousand dollars ($1000) for public works to file with the proper authority good and sufficient bond with surety furnished by any surety company authorized to do business in the state, conditioned upon the faithful performance of the contract and upon the payment for labor performed and material furnished in connection therewith, such bond to contain the terms and conditions set forth in chapter 12 of this title, and to be subject to the provisions of that chapter.

"(b) Provided, however that for good cause shown in state public works contracts, the director of the department of administration may waive the requirements of this section in regards to materials furnished only for contracts not in excess of fifty thousand dollars ($50,000)."

It is well settled that when the language of a statute is clear and unambiguous, this Court must interpret the statute literally and must give the words of the statute their plain and ordinary meanings. Marran v. Baird, 635 A.2d 1174, 1180 (R.I.1994); Ellis v. Rhode Island Public Transit Authority, 586 A.2d 1055, 1057 (R.I.1991); O'Neil v.Code Commission for Occupational Safety and Health, 534 A.2d 606, 608 (R.I.1987) After applying these principles to § 37-13-14, we have concluded that the statute clearly does not create any express right of action in the event that the public authority failed to require a contractor to file a payment bond with the proper authority. Moreover, a statute that establishes rights not recognized by common law is subject to strict construction. Ayers-Schaffner v. Solomon, 461 A.2d 396, 398 (R.I...

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