Arizona Laborers, Teamsters and Cement Masons Local 395 Health and Welfare Trust Fund v. New Pueblo Constructors, Inc.

• Decision Date: 19 January 1982
• Docket Number: CA-CIV,No. 2,2
• Citation: 131 Ariz. 278,640 P.2d 209
• Parties: ARIZONA LABORERS, TEAMSTERS AND CEMENT MASONS LOCAL 395 HEALTH AND WELFARE TRUST FUND, a Trust; Arizona Laborers, Teamsters and Cement Masons Local 395 Pension Trust Fund, a Trust; Laborers and Cement Masons Local 395 Savings Fund, a Trust; and Laborers Joint Training Fund, a Trust, Plaintiffs/Appellees, v. NEW PUEBLO CONSTRUCTORS, INC., and the Travelers Indemnity Company, Defendants/Appellants. 4063.
• Court: Arizona Court of Appeals

Page 209

640 P.2d 209

131 Ariz. 278

ARIZONA LABORERS, TEAMSTERS AND CEMENT MASONS LOCAL 395 HEALTH AND WELFARE TRUST FUND, a Trust; Arizona Laborers, Teamsters and Cement Masons Local 395 Pension Trust Fund, a Trust; Laborers and Cement Masons Local 395 Savings Fund, a Trust; and Laborers Joint Training Fund, a Trust, Plaintiffs/Appellees, v. NEW PUEBLO CONSTRUCTORS, INC., and the Travelers Indemnity Company, Defendants/Appellants.

No. 2 CA-CIV 4063.

Court of Appeals of Arizona, Division 2.

Jan. 19, 1982.

Ward & Keenan, Ltd. by David L. Niederdeppe, Phoenix, for plaintiffs/appellees.

Molloy, Jones, Donahue, Trachta, Childers & Mallamo, P. C. by D. Michael Mandig and Earl F. Daniels III, Tucson, for defendants/appellants.

OPINION

HATHAWAY, Judge.

This is an appeal from a summary judgment in favor of the plaintiff trust funds on their claim to a general contractor's payment bond, pursuant to A.R.S. § 34-223.

Defendant New Pueblo Constructors contracted with the Arizona Department of Transportation to work on the Tucson-Nogales highway. According to statute, it obtained a bond from defendant Travelers Indemnity Company. New Pueblo subcontracted work on this project to Highway Safety Products, Inc. Highway Safety is a signatory to the Master Labor Agreement covering construction workers in Arizona. According to this agreement, Highway Safety is required to contribute to the plaintiff trust funds, which provide pension, health and vacation benefits to their members. It is undisputed that Highway Safety failed to make the required contributions. ¹ The trust funds secured a summary judgment against the general contractor, New Pueblo, and its surety, Travelers. The defendants appealed.

A.R.S. § 34-222 requires the general contractor on a public job to post a payment bond to ensure that all claims against the project are covered. According to A.R.S. § 34-223, a supplier of labor or materials to a subcontractor may sue on the general contractor's bond, even though there may be no contract between the supplier and the general contractor. Notice of the claim, however, must be sent to the general contractor within 90 days of the last delivery of materials or labor to the subcontractor. This statute is taken from the federal Miller Act, 40 U.S.C. §§ 270a-270d, and is thus called the "Little Miller Act."

The right asserted in this case-to collect against the prime contractor's bond because of a subcontractor's failure to make fund contributions-was established in United States ex rel. Sherman v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957). Appellants admit that Sherman controls, but contend that only a portion of the claim is timely.

Twelve workers were finished by the end of October 1978. A thirteenth, R. Villa, worked through January 1979. The trust funds gave notice to the general contractor on April 11, 1979. If the laborers were claiming against the bond individually, only R. Villa's claim would not be time barred. Appellants therefore admit liability on the part of the claim attributable to R. Villa but deny the rest.

In this case of first impression, the parties ask us to choose between competing interests. According to the appellee trust funds, the purpose of the Little Miller Act is remedial, to ensure that laborers and materialmen are paid. Western Asbestos Co. v. T. G. K. Construction Co., Inc., 121 Ariz. 388, 590 P.2d 927 (1979). They note that the individual workers have no way of knowing whether these contributions have been made and that the workers must claim their benefits from the fund rather than from the employer. The funds are charged with the responsibility of collecting the payments from the employers. The funds are rarely in a position to act...