Blanchard v. Terry & Wright, Inc.

• Decision Date: 14 June 1963
• Docket Number: Civ. A. No. 3891.
• Citation: 218 F. Supp. 910
• Parties: Hugh D. BLANCHARD and Cullen Jenkins, d/b/a Blanchard & Jenkins Construction Company, Plaintiffs, v. TERRY & WRIGHT, INC., and Federal Insurance Company, Defendants.
• Court: U.S. District Court — Western District of Kentucky

218 F. Supp. 910

Hugh D. BLANCHARD and Cullen Jenkins, d/b/a Blanchard & Jenkins Construction Company, Plaintiffs, v. TERRY & WRIGHT, INC., and Federal Insurance Company, Defendants.

Civ. A. No. 3891.

United States District Court W. D. Kentucky, at Louisville.

June 14, 1963.

Edgar A. Zingman, Louisville, Ky., for plaintiffs.

Robert P. Hobson, Louisville, Ky., for defendants.

SHELBOURNE, District Judge.

This action was commenced December 11, 1959, by the plaintiffs, Hugh D. Blanchard and Cullen Jenkins, partners doing business as Blanchard & Jenkins Construction Company, against Terry & Wright, Inc., and Federal Insurance Company as defendants.

The complaint alleged that defendant Terry & Wright, Inc., was a corporation created under the laws of the State of Michigan, and that defendant Federal Insurance Company was a corporation created under the laws of the State of New York and was a citizen and resident of that state. No reference to Section 1332 of Title 28, United States Code, was made in the complaint although it is apparent that the source of jurisdiction was thought to be in that section as diversity of citizenship and the requisite amount in controversy were alleged. The averments as to diversity failed to allege that the principal place of business of each of the defendants was not in the State of Kentucky. The complaint alleged that defendant Terry & Wright, Inc., had contracted with the United States to build a dam and spillway on the Rough River in the Western District of Kentucky and that defendant Federal Insurance Company, as surety for Terry & Wright, Inc., had executed a bond guaranteeing the performance of the contract by the principal in the bond and guaranteeing payment by the principal of all claims for labor and material used in that contract. It was then alleged that the plaintiffs, Blanchard and Jenkins, contracted with Terry & Wright, Inc., to furnish all filter material in accordance with the prime contract between Terry & Wright, Inc., and the United States.

Defendant Terry & Wright, Inc., admitted the averments of the complaint, except to deny that the plaintiffs had furnished a certain quantity of filter material for which Terry & Wright, Inc., had failed to pay in full, denied the allegations as to the defendants' indebtedness for equipment that plaintiffs rented to Terry & Wright, Inc., and pleaded a settlement in Accord and Satisfaction of all matters arising out of the subcontract and its execution.

The case came on for trial to a jury on November 21, 1962, which resulted in a verdict for the plaintiffs and judgment was entered for the amount of the verdict on November 23, 1962. November 28, 1962, the defendants moved for a judgment notwithstanding the verdict, in accordance with their motion made at the conclusion of the introduction of all the testimony at the trial, and that motion was overruled March 6, 1963. On March 8, 1963, the defendants moved the Court to dismiss the proceeding for lack of jurisdiction and March 15, 1963, filed a motion to set aside the judgment for want of jurisdiction. The plaintiffs then moved the Court for leave to amend the complaint, asserting that the action arose under the Miller Act, Section 270b of Title 40, and under Section 1352 of Title 28, United States Code.

In their original answer the defendants denied that the Court had jurisdiction of this action and at the trial introduced testimony, not denied, that Terry & Wright, Inc., was a corporation created under the laws of the State of Michigan but had its only and chief place of business in the Western District of Kentucky, which was also the residence of the plaintiffs.

There was no diversity of citizenship between the plaintiffs and defendant Terry & Wright, Inc., as required by Section 1332 of Title 28 and, the complaint having failed to allege that the Federal Insurance Company did not have its principal place of business in the State of Kentucky, there was presumptively no diversity of citizenship there. Bell v. Gray, D.C.Ky., 191 F.Supp. 328 (1960), affirmed 6 Cir., 287 F.2d 410 (1960).

If jurisdiction is absent, the judgment is void. The validity of the judgment in this case depends upon whether jurisdiction on other grounds exists.

The amended complaint tendered by the plaintiffs on April 10, 1963, alleges that the action arises under the provisions of Sections 270a, 270b, and 270c of Title 40, United States Code, and that it was brought pursuant to those sections and Section 1352 of Title 28, United States Code, for the recovery of monies due plaintiffs for labor and material furnished by them in the prosecution of public work of the United States pursuant to the defendants' contract with the United States Army Corps of Engineers, which contract was to be performed within the area of this Court's jurisdiction. Plaintiffs seek to amend by making the United States of America, for the use and benefit of Blanchard and Jenkins, a plaintiff. The plaintiffs further allege that the action was instituted within one year next after the date of final settlement of the contract.

Section 270a of Title 40 requires that before any contract, exceeding $2,000.00 in amount, for the construction, alteration or repair of any public building or public work of the United States is awarded to any person, there shall be executed by such person a performance bond for the protection of the United States and a payment bond for the protection of all persons supplying labor and material in the prosecution of the work covered by the contract.

Section 270b(b) of Title 40 is as follows:

"Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing, in

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