Cemex Constr. Materials S., LLC v. Falcone Bros. & Assoc's., Inc., No. 2 CA-CV 2014-0044

CourtCourt of Appeals of Arizona
Writing for the CourtKELLY, Presiding Judge
Decision Date30 April 2015
Docket NumberNo. 2 CA-CV 2014-0044

A MICHIGAN CORPORATION, Defendants/Appellants.

No. 2 CA-CV 2014-0044


April 30, 2015

Appeal from the Superior Court in Pima County
The Honorable Carmine Cornelio, Judge



Lewis Roca Rothgerber LLP
By Kimberly A. Demarchi, Phoenix, and
John A. Hinderaker, Tucson
Counsel for Plaintiff/Appellee

Vingelli & Errico, Tucson
By Michael J. Vingelli


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William E. Druke, Tucson
Co-Counsel for Defendants/Appellants

Quarles & Brady LLP, Tucson
By Craig H. Kaufman and Deanna Conn
Counsel for Amicus Curiae Arizona Rock Products Association


Presiding Judge Kelly authored the opinion of the court, in which Judge Howard and Judge Vásquez concurred.

KELLY, Presiding Judge:

¶1 Falcone Brothers & Associates, Inc. (Falcone) appeals from the trial court's judgment awarding damages to Cemex Construction Materials South, LLC (Cemex) for materials and labor Cemex provided to a public works construction project for which Falcone was the general contractor. Falcone argues the court erred in concluding that notices sent by Cemex to Falcone regarding amounts Cemex was owed satisfied the requirements of Arizona's "Little Miller Act." See A.R.S. § 34-223(A) (requiring materialman to provide estimate of costs within twenty days of supplying labor or materials and notice of any unpaid balance within ninety days of completion). Falcone contends Cemex's notices, which were sent by first class mail with a certificate of mailing, did not comply with § 34-223(A), and Cemex therefore was precluded from bringing its action. For the following reasons, we vacate the judgment and remand for a new trial.

Factual and Procedural Background

¶2 The record supports the following facts and procedural history. Falcone was the general contractor for a City of Tucson public works improvement project. The project was bonded and guaranteed by The Guarantee Company of North America (GCNA). Falcone subcontracted with J & S Commercial Concrete Contractors,

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Inc. (J & S) for concrete work on the project and J & S, in turn, subcontracted with Cemex to provide construction materials.

¶3 In 2011, Cemex filed a complaint against J & S, Falcone, and GCNA, alleging it had not been paid for the materials it had supplied to the project. J & S did not answer the complaint, and Cemex obtained a default judgment against it. Cemex then moved for summary judgment against Falcone and GCNA, claiming it was entitled to recover against the statutory payment bond. In its motion, Cemex asserted that it had filed four preliminary twenty day notices to Falcone pursuant to § 34-223(A) before filing suit, and that each notice had been mailed separately via first class mail, postage prepaid, with a certificate of mailing.

¶4 In its response to Cemex's motion, Falcone asserted that "[a]t no time before, during or after The Project did [it] receive a Preliminary Twenty-Day Notice from [Cemex] for materials" Cemex had supplied to J & S, as is required by § 34-223(A).1 This claim was supported by a declaration from Falcone's owner, who asserted Falcone had not received any twenty day notices. Falcone also contended that genuine issues of material fact existed regarding whether Cemex had delivered any concrete to the project and the amount of concrete delivered. Subsequently, the trial court granted Cemex's request to withdraw its motion for summary judgment, allowing the parties additional time for disclosure and discovery.

¶5 In December 2012, Cemex renewed in part its motion for summary judgment on the issue of damages, urging that Falcone's discovery responses indicated Cemex had "supplied at least 837 cubic yards of concrete to the project." Falcone agreed the project had required 837 cubic yards of concrete but maintained that a genuine issue of material fact existed regarding "how much concrete Cemex actually provided to J & S" for the project.

¶6 Falcone then filed a motion for summary judgment, claiming it had not received the statutorily required twenty day

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notices and Cemex therefore was precluded from bringing its action. It further contended the notices were insufficient to satisfy the statutory requirements because they were sent by first class, rather than by registered or certified mail. Cemex maintained that the four preliminary twenty day notices it had sent by first class mail with certificates of mailing satisfied the statute's requirements.

¶7 In March 2013, the trial court denied Cemex's motion for partial summary judgment on the issue of damages. After a hearing, the court also denied Falcone's motion for summary judgment, concluding that Cemex's certificates of mailing and affidavits were "sufficient to meet the purposes of" § 34-223(A). After a bench trial on the sole issue of damages, the court entered judgment in favor of Cemex, awarding it $81,913.04 in damages along with prejudgment interest, costs, and attorney fees. Falcone timely appealed.2 We have jurisdiction pursuant to A.R.S. § 12-2101(A).


¶8 Falcone argues the trial court erred by concluding that the twenty day notices Cemex sent to Falcone by first class mail satisfied § 34-223(A) as a matter of law.3 Falcone asserts the statute

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specifies that both twenty and ninety day notices must be sent only by registered or certified mail, as provided for in the last sentence of that section. See § 34-223(A) ("Such notice shall be served by registered or certified mail, postage prepaid . . . ."). Cemex, by contrast, claims that because this sentence contains the singular form ("[s]uch notice"), it applies only to ninety day notices; this, according to Cemex, leaves an "unfilled statutory gap," which we should fill by applying the mailing provision found in A.R.S. § 33-992.01(F) (the mechanic's lien law). Because § 33-992.01 allows for service by first class mail with a certificate of mailing, Cemex maintains its notices were sufficient. We review issues of statutory interpretation and application de novo. Schwarz v. City of Glendale, 190 Ariz. 508, 510, 950 P.2d 167, 169 (App. 1997).

¶9 "The primary rule of statutory construction is to find and give effect to legislative intent." Mail Boxes, Etc., U.S.A. v. Indus. Comm'n, 181 Ariz. 119, 121, 888 P.2d 777, 779 (1995). To determine that intent, we look first to the plain language of the statute. Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 177 Ariz. 526, 529, 869 P.2d 500, 503 (1994). "When a statute is clear, we do not 'resort to other methods of statutory interpretation to determine the legislature's intent because its intent is readily discernible from the face of the statute.'" In re Estate of Wyatt, 235 Ariz. 138, ¶ 5, 329 P.3d 1040, 1041 (2014), quoting State v. Christian, 205 Ariz. 64, ¶ 6, 66 P.3d 1241, 1243 (2003). But when a statute's language is ambiguous, we resort to principles of statutory interpretation to discern the legislature's intent. Bentley v. Building Our Future, 217 Ariz. 265, ¶ 13, 172 P.3d 860, 865 (App. 2007). Although statutes such as the LMA are to be construed liberally in favor of the materialman, such construction "must give way to express limitations imposed by the legislature." Maricopa Turf, Inc. v. Sunmaster, Inc., 173 Ariz. 357, 361, 842 P.2d 1370, 1374 (App. 1992); Coast to Coast Mfg. v. Carnes Constr., Inc., 145 Ariz. 112, 113, 700 P.2d 499, 500 (App. 1985).

¶10 Both Cemex and Falcone conceded at argument that the notice provision of the statute is ambiguous. Because the term "such

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notice" is susceptible to both parties' interpretations, we agree. We therefore look to the language of the statute as well as principles of statutory interpretation to discern the legislature's intent. See Bentley, 217 Ariz. 265, ¶ 13, 172 P.3d at 865.

¶11 Arizona's "Little Miller Act" (LMA),4 A.R.S. §§ 34-221 through 34-227, requires a general contractor on a public project to post a bond to ensure that all who supply labor or materials to the project are paid. § 34-222. Both a payment bond and a performance bond, executed by a surety company, must be posted before public work begins. Id. The LMA provides a materialman with a right to recover from the payment bond when it has not been paid for material or labor it has provided. § 34-223. To maintain an action on the bond, a claimant must comply with the notice requirements of § 34-223(A), which provides in pertinent part:

[A]ny such claimant having a direct contractual relationship with a subcontractor of the contractor furnishing such payment bond but no contractual relationship express or implied with such contractor shall have a right of action upon such payment bond upon giving the contractor only a written preliminary twenty day notice, as provided for in § 33-992.01, subsection C, paragraphs 1, 2, 3 and 4 and subsections E and H, and upon giving written notice to such contractor within ninety days from the date on which such claimant performed the last of the labor or furnished or supplied the last of the material for which such claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or

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supplied for whom the labor was done or performed. Such notice shall be served by registered or certified mail, postage prepaid, in an envelope addressed to the contractor at any place the contractor maintains an office or conducts business, or at the contractor's residence.

The statute requires a materialman claimant to send both a preliminary twenty day notice and a final ninety day notice, and neither notice may substitute for the other. Westburne Supply, Inc. v. Diversified Design & Constr., Inc., 170 Ariz. 598, 600, 826 P.2d 1224, 1226 (App. 1992).

¶12 The purpose of these notice requirements is "'to fix a time limit after which...

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