Blakeslee Arpaia Chapman, Inc. v. EI Constructors, Inc.

• Decision Date: 21 January 1997
• Docket Number: No. 15381,15381
• Citation: 687 A.2d 506,239 Conn. 708
• Court: Connecticut Supreme Court
• Parties: BLAKESLEE ARPAIA CHAPMAN, INC. v. EI CONSTRUCTORS, INC., et al.

Page 506

687 A.2d 506

239 Conn. 708

BLAKESLEE ARPAIA CHAPMAN, INC. v. EI CONSTRUCTORS, INC., et al.

No. 15381.

Supreme Court of Connecticut.

Argued June 4, 1996.

Decided Jan. 21, 1997.

[239 Conn. 710] Allan J. Kleban, with whom were Wesley W. Horton, Hartford, and, on the brief,

Kimberly M. Canning, Simsbury, for appellant-appellee (defendant Aetna Insurance Company)

William H. Clendenen, Jr., New Haven, with whom, on the brief, was Nancy L. Walker, North Haven, for appellee-appellant (plaintiff).

David R. Hendrick, pro hac vice, and Frank J. Forgione, North Branford, filed a brief, for the American Subcontractors Association as amicus curiae.

Jack G. Steigelfest, Hartford, filed a brief, for the Connecticut Defense Lawyers Association as amicus curiae.

Steven D. Ecker, filed a brief, for the Connecticut Trial Lawyers Association as amicus curiae.

Richard Blumenthal, Attorney General, and Carolyn K. Querijero, Assistant Attorney General, filed a brief, for the Attorney General as amicus curiae.

Before CALLAHAN, C.J., and BORDEN, BERDON, NORCOTT, KATZ, PALMER and McDONALD, JJ.

BERDON, Associate Justice.

This appeal ¹ involves, among numerous lesser issues, the award of offer of judgment interest pursuant to General Statutes (Rev. to 1983) § 52-192a. ² The offer of judgment issue raises the following: (1) whether the plaintiff was entitled to such interest when a unified offer of judgment was directed to multiple defendants; (2) whether the plaintiff was entitled to such interest because, subsequent to the filing of the offer, the plaintiff amended its complaint to add a new claim; (3) whether the plaintiff should have been awarded such interest for the period of time this action was stayed pending the outcome of related federal litigation; and (4) whether the offer of judgment statutes, General Statutes (Rev. to 1983) §§ 52-192a and 52-193, and General Statutes §§ 52-194 and 52-195, ³ treat plaintiffs and defendants so differently as to violate the due process and equal protection guarantees of the federal and state constitutions.

On January 11, 1983, the defendant general contractor EI Constructors, Inc. (EI), and the defendant city of Waterbury (Waterbury) entered into a contract (contract) for the construction of the Waterbury water treatment plant (plant). EI, as principal, and the defendant Aetna Insurance Company (Aetna), as surety, furnished a payment bond in the amount of $21,274,000 pursuant to the contract and as required by General Statutes (Rev. to 1983) § 49-41 et seq. ⁴ Thereafter, the plaintiff Blakeslee Arpaia Chapman, Inc., entered into a subcontract with EI to perform certain work with respect to the plant (subcontract) for the price of $440,000. EI defaulted on the contract by failing to perform its obligation, and Waterbury took control of the construction of the plant.

The plaintiff thereafter brought this multiple count action for damages arising out of the construction of the plant against EI on the subcontract, against Aetna as surety on the payment bond, and against Waterbury for tortious conduct. The nine counts of the complaint relevant to EI and Aetna are: count one for progress payments under its subcontract pursuant to invoices for July, August and September, 1984; count two for equipment rentals and standby labor costs; count three for rental and liquidation costs of steel sheeting and structured members; count four for the 5 percent retainage held pursuant to the subcontract; count five for extra work; count six for the cost of failing to supply electricity; count seven for unbilled costs and profits under the subcontract; count eight for extra costs for unforeseen construction conditions; and count nine for increased labor costs. The relevant facts for each count that is the subject of this appeal will be discussed when addressing the particular issue.

The trial court, in a thoughtful and comprehensive written opinion, rendered judgment in favor of the plaintiff against EI for $1,506,687.23 ⁵ and against Aetna for $967,338.16. ⁶ These amounts included interest pursuant to General Statutes (Rev. to 1983) § 37-3a ⁷ (compensatory interest) and interest pursuant to § 52-192a (offer of judgment Although the principal issues in this case pertain to the offer of judgment interest pursuant to § 52-192a, several other issues raised by Aetna on the appeal and the plaintiff on the cross appeal must first be addressed. We begin our analysis with the appropriate standard of review. On appeal, our function is not to retry the facts. Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., 234 Conn. 1, 16, 662 A.2d 89 (1995). Rather, "[t]he trial court's findings are binding upon this court unless they are clearly erroneous in light of the evidence and the pleadings in the record as a whole.... A finding of fact is clearly erroneous when there is no evidence in the record to support it ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." (Internal quotation marks omitted.) Groton v. Yankee Gas Services Co., 224 Conn. 675, 691, 620 A.2d 771 (1993).

                interest).  The trial court also rendered judgment in favor of Waterbury.  Aetna appealed 8 and the plaintiff cross appealed 9 to the Appellate Court and we transferred both appeals to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). 10  We affirm the judgment of the trial court
                

The liability of Aetna under the payment bond will be reviewed in part I of this opinion, and the issues of compensatory interest and offer of judgment interest will be reviewed in parts II and III, respectively.

I LIABILITY OF AETNA

General Statutes (Rev. to 1983) §§ 49-41 through 49-43, which provide for the furnishing of bonds guaranteeing payment (payment bonds) on public works construction projects, were "enacted to protect workers and materials suppliers on public works projects who cannot avail themselves of otherwise available remedies such as mechanic's liens." Herbert S. Newman & Partners v. CFC Construction Ltd. Partnership, 236 Conn. 750, 757, 674 A.2d 1313 (1996); see National Fire Proofing Co. v. Huntington, 81 Conn. 632, 633, 71 A. 911 (1909) (mechanic's lien cannot lie against the state or any of its subdivisions). Section 49-41 ¹¹ requires that the general contractor provide a payment bond with surety to the state or This legislation, known as the "Little Miller Act" (act), "was patterned after federal legislation popularly known as the Miller Act; 40 U.S.C. §§ 270a through 270d; and, therefore, we have regularly consulted federal precedents to determine the proper scope of our statute. American Masons' Supply Co. v. F.W. Brown Co., [174 Conn. 219, 223-24, 384 A.2d 378 (1978) ]; Pittsburgh Plate Glass Co. v. Dahm, [159 Conn. 563, 567-68, 271 A.2d 55 (1970) ]; International Harvester Co. v. L.G. DeFelice & Son, Inc., [151 Conn. 325, 332-34, 197 A.2d 638 (1964) ]." Okee Industries, Inc. v. National Grange Mutual Ins. Co., 225 Conn. 367, 374, 623 A.2d 483 (1993). "The federal precedents, like our own, counsel liberal construction of statutory requirements other than those relating to specific time constraints." Id.; see also Herbert S. Newman & Partners v. CFC Construction Ltd. Partnership, supra, 236 Conn. at 757, 674 A.2d 1313; International Harvester Co. v. L.G. DeFelice & Son, Inc., supra, at 333, 197 A.2d 638. As the United States Supreme Court has stated, the federal Miller Act is "highly remedial in nature ... [and] entitled to a liberal construction and application in order properly to effectuate the [legislative] intent to protect those whose labor and materials go into public projects." Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkin's Co., 322 U.S. 102, 107, 64 S.Ct. 890, 893, 88 L.Ed. 1163 (1944).

governmental subdivision, which bond shall guarantee payment to those who supply labor and materials on a public works project. See Nor'easter Group, Inc. v. Colossale Concrete, Inc., 207 Conn. 468, 471, 542 A.2d 692 (1988). Section 49-42 ¹² provides [239 Conn. 716] that any person who has performed work or supplied materials on a public works project, but who has not received full payment for such materials or work, may enforce his right to payment under the payment bond.

Although the surety's liability on the bond must be "at least coextensive with the obligation imposed by the [Miller] Act"; Herbert S. Newman & Partners v. CFC Construction Ltd. Partnership, supra, 236 Conn. at 758, 674 A.2d 1313; the "statutory requirements establish only a floor of protection beneath which the coverage of a payment bond cannot fall, rather than an upper limit upon the scope of a bond's coverage." Id., at 757, 674 A.2d 1313. In other words, the provisions of the payment bond may create more extensive liability for the surety than that required by the act. Because the payment bond was furnished by the surety, if there is any ambiguity, "it must be interpreted most strongly against [the surety]." (Internal quotation marks omitted.) Id., at 759, 674 A.2d 1313. With these principles in mind, we review the liability issues raised by Aetna, as well as certain amounts awarded by the trial court.

A Progress Payments and Retainage

In accordance with the terms of the subcontract, the trial court awarded the plaintiff damages against EI in the amount of $114,286.79, for its unpaid invoices of July, August and September of 1984 (progress payments) under count one and for the 5 A clause in the subcontract provided that the plaintiff was to be paid when EI received payment from Waterbury. ¹⁴ In the construction industry this is commonly referred to as a "pay-when-paid" clause. It is not disputed that the plaintiff's invoices submitted to EI were in accordance with the payment values assigned to the work in the subcontract, and that the work was performed. Aetna, however, argues...