D & L CONSTRUCTION CO. v. Triangle Elec. Supply Co.

• Decision Date: 22 June 1964
• Docket Number: No. 17493.,17493.
• Citation: 332 F.2d 1009
• Parties: D & L CONSTRUCTION COMPANY et al., Appellants, v. TRIANGLE ELECTRIC SUPPLY COMPANY, Inc., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

332 F.2d 1009 (1964)

D & L CONSTRUCTION COMPANY et al., Appellants, v. TRIANGLE ELECTRIC SUPPLY COMPANY, Inc., Appellee.

No. 17493.

United States Court of Appeals Eighth Circuit.

June 22, 1964.

John A. Biersmith, of Rafter, Biersmith, Miller & Walsh, Kansas City, Mo., for appellant.

Robert D. Youle, of Lathrop, Righter, Gordon & Parker, and Daniel M. Dibble, of Lathrop, Righter, Gordon & Parker, Kansas City, Mo., for appellee.

Before VAN OOSTERHOUT, RIDGE and MEHAFFY, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

The issue presented by this appeal taken by defendants D & L Construction Company and its associates and Continental Casualty Company, its performance bond surety, is whether the trial court properly allowed plaintiff Triangle Electric Supply Company, Inc., interest and attorneys' fees upon its claim for materials furnished Mojave Electric Company, Inc., a subcontractor upon a Capehart Housing Project upon which D & L was prime contractor.

Through pleadings, discovery proceedings, stipulations and pretrial conferences, the parties ultimately agreed that the reasonable value of electrical equipment furnished by Triangle to the subcontractor and used on the project is $14,592.12. Triangle's right to judgment for such amount is not questioned. The parties stipulated in regard to their respective claims and the questions for decision as follows:

"(a) If plaintiff Triangle is entitled to interest, said interest shall run from date of plaintiff\'s demand letter of March 28, 1960 to the defendants D & L and Continental, and such interest shall be calculated at the rate of six per cent per annum. * * * Defendants deny that interest is allowable on an award on such bond. This is an issue of law to be determined by the Court.

"(b) Plaintiff claims that if a recovery is allowed it for the principal amount of its claim under the payment bond in question, it is also entitled to an allowance for attorneys\' fees. Defendants deny that any attorneys\' fees can be awarded in connection with a recovery on the bonds in question. This is an issue of law to be determined by the Court."

The court sustained Triangle's motion for summary judgment and entered judgment for Triangle against D & L and its surety for $14,592.12 principal, $2,924.07 interest and $6,000 attorneys' fees.¹ This appeal is from such judgment.²

Defendants' statement of points relied upon for reversal reads:

"The Court below erred in including in its summary judgment as a matter of `Federal Law\' under `Rules of Decision Developed under the Heard and Miller Act Decisions\' sums representing awards to this plaintiff of pre-judgment interest and attorneys\' fees in that:

"a. The rules of decision developed under the Miller and Heard Acts are not applicable to Capehart bond suits.

"b. Even under the decisions interpreting the Miller and Heard Acts, there is no `Federal Law\' entitling a claimant to pre-judgment interest or attorneys\' fees."

Plaintiff's answer to point "a" is that, for the purpose of solving the issues here presented, it is immaterial whether the Capehart Housing Project provisions are sui generis and that all provisions of the Miller Act may not apply to Capehart Housing. We agree. Continental Cas. Co. v. United States for the Use and Benefit of Robertson Lumber Co., 8 Cir., 305 F.2d 794, relied upon by defendants, has no direct bearing upon the problem we are here considering. There we held that 42 U.S.C.A. § 1594a gave the Secretary of Defense the right to prescribe the form of bond to be furnished on Capehart Projects and that when the bond prescribed and given contained more stringent provisions as to notice to be given than the Miller Act, the procedural provisions of the Capehart bond must be followed. We said nothing about the Miller Act decisions lacking persuasiveness in instances where the Miller Act bond and Capehart bond contained substantially similar provisions. We recognized that the Capehart bond is a bond required by federal law and stated that Congress intended that Capehart should have substantive bond protection essentially similar to that of Miller Act suppliers.

Plaintiff's position is that, to the extent here material, the Capehart bond as prescribed by the Secretary of Defense pursuant to 42 U.S.C.A. § 1594a and given by the prime contractor is in substance the same as that required on Miller Act projects by 40 U.S.C.A. § 270b. The pertinent provisions of the bond here in suit are:

"* * * every claimant * * * who has not been paid in full before the expiration of a period of ninety (90) days after the date on which the last of such claimant\'s work or labor was done or performed or materials furnished by such claimant * * * may sue on this bond * * in the name of the claimant, prosecute the suit to final judgment for such sum or sums as may be justly due claimant, and have execution thereon * * *."

The Miller Act, as shown by 40 U.S. C.A. § 270b(a) similarly provides bond coverage for persons furnishing labor or materials "for the sum or sums justly due him."

It reasonably appears that the drafters of the Capehart bond adopted the Miller Act phraseology in the respects here material. Miller Act bonds and Capehart bonds are bonds required by federal law. Each of such bonds are designed to serve substantially the same purpose, that is, to protect parties furnishing labor and material used on federally sponsored projects. Upon the record before us, we believe that the trial court properly determined that "the rules of decision that will be applied to the factual situations involved in the various cases will be the rules of decision developed under the Heard and Miller Act decisions."³ 217 F.Supp. 913, 914.

Defendants urge that in any event there are no decisions under the Heard and Miller Act which allow for recovery of pre-judgment interest or attorneys' fees. The bond here in suit clearly permits Triangle to recover sums justly due for material and labor furnished on the project. What is included in the term "justly due" may vary with the facts and circumstances of individual cases. If labor and material is furnished under express contract, the contract will ordinarily measure the sum justly due. Here the court, upon the basis of undisputed evidence, found:

"All of the invoices of plaintiff Triangle to Mojave for materials here involved contain the following provision:

"`All past due invoices bear interest at the rate of 6% per annum. Should it become necessary to place this or any subsequent invoice in the hands of an attorney for collection, reasonable attorneys\' fees shall be added.\'

"Said provision expresses Triangle\'s usual and normal terms of sale and constitute a part of the contract of purchase and sale between plaintiff Triangle and Mojave Electric Company." 217 F.Supp. 913, 914.

The validity of the court's determination that the contract between Triangle and the subcontractor provided for 6% interest on past due invoices and a reasonable attorneys' fee in event of suit is in no way challenged. With respect to interest, the parties have agreed as to the amount of interest due in the event interest is allowable. The judgment for interest is based upon such agreement.

We agree with the trial court that the contract under which Triangle furnished materials to the...