Charlie Brown Const. Co., Inc. v. City of Boulder City, 19159

• Decision Date: 21 August 1990
• Docket Number: No. 19159,19159
• Citation: 106 Nev. 497,797 P.2d 946
• Parties: CHARLIE BROWN CONSTRUCTION COMPANY, INC., a Nevada Corporation, and Delta Electric Company, Inc., a Nevada Corporation, Appellants, v. CITY OF BOULDER CITY, Nevada, a Political Subdivision of the State of Nevada, Respondent.
• Court: Nevada Supreme Court

Page 946

797 P.2d 946

106 Nev. 497

CHARLIE BROWN CONSTRUCTION COMPANY, INC., a Nevada

Corporation, and Delta Electric Company, Inc., a Nevada Corporation, Appellants, v. CITY OF BOULDER CITY, Nevada, a Political Subdivision of the

State of Nevada, Respondent.

No. 19159.

Supreme Court of Nevada.

Aug. 21, 1990.

Marquis, Haney & Aurbach, William T. Martin and James P. McBride, Las Vegas, for appellants.

B.G. Andrews, City Atty., Boulder City, for respondent.

OPINION

STEFFEN, Justice:

The district court entered summary judgment against appellants Charlie Brown Construction Company, Inc. (Brown) and Delta Electric Company, Inc. (Delta), subcontractors on a subdivision project approved by respondent City of Boulder City (City) on six grounds. Two of the grounds consisted of a statutory construction favoring the City and a determination that the City was not unjustly enriched by the uncompensated labor and materials supplied by Brown and Delta for off-site improvements to the City's property.

Summary judgment is proper when it appears that there is no genuine issue of material fact, and the moving party is entitled to a judgment as a matter of law. Wiltsie v. Baby Grand Corp., 105 Nev. 291, 774 P.2d 432, 433 (1989). The facts here are not disputed. Appellants assert three claims for relief: (1) that they were third-party beneficiaries of the agreement between the City and Boulder Development, Inc. (Boulder Development) and that the City wrongfully released Boulder Development's cash deposit; (2) that the City was negligent in releasing funds deposited by the subdivider and in not requiring the subdivider to post a payment bond as mandated by City ordinance; and (3) that the City was unjustly enriched by the retention of and non-payment for their work.

Appellants' second contention is meritorious. Because we discern merit in the negligence claim, we reverse the summary judgment granted in favor of the City.

Facts

The City approved a subdivision project submitted by the subdivider, Boulder Development. Brown and Delta entered into subcontracts with the general contractor for construction of the off-site improvements on the project. Brown and Delta completed the work but were unable to obtain full payment because of the bankruptcy of the general contractor and subdivider. The two subcontractors were also frustrated in securing payment through liens because of a trustee's sale facilitated by the construction lender's priority deed of trust. Brown and Delta received $92,587.96 and $49,372.10 less respectively, than they were entitled to receive for the labor and materials they provided.

In approving the subdivision, the City required the subdivider to post a cash deposit in lieu of a bond to insure performance of the off-site construction, but it did not require the filing of a payment bond to insure payment to the subcontractors. The City subsequently accepted title to the off-site improvements and released the cash deposit. Brown and Delta, after exhausting all other possible avenues for payment, filed this suit against the City.

Third-Party Beneficiary Claims

The trial court correctly rejected the claim that appellants were third-party beneficiaries of the off-site improvement agreement between the City and Boulder Development. However, even if there were a third-party beneficiary theory upon which recovery could be based, it would afford no relief to appellants. Claims under a third-party beneficiary theory are necessarily contract claims. The presentment of claims requirement set out in NRS 268.020, as applied to contractual claims against municipalities, has been upheld by this court. L-M Architects, Inc. v. City of Sparks, 100 Nev. 334, 683 P.2d 11 (1984). There was no presentment to the Boulder City Council within the requisite six month time period and any contractually-based theories of recovery are therefore barred by the clear language of the statute. The district court correctly concluded that NRS 268.020 barred Brown and Delta's claims on this theory.

We have previously invalidated Nevada's statutory presentment restrictions upon a tort claimant's ability to sue. Turner v. Staggs, 89 Nev. 230, 235-236, 510 P.2d 879, 883, cert. denied, 414 U.S. 1079, 94 S.Ct. 598, 38 L.Ed.2d 486 (1973). Therefore, any tort claims appellants have must be considered on their merits. Because appellants' contract claims lack merit, we need not address them further.

Unjust Enrichment Claims

Having determined that Brown's and Delta's negligence claims are meritorious we deem it unnecessary to address their claims based upon theories of unjust enrichment.

The Negligence Claims

Brown and Delta contend that the City was negligent in either prematurely releasing the cash deposit or failing to obtain a payment bond on their behalf as required by Boulder City Municipal Code § 11-36-12(A) and 11-36-5(K)(1) and (L)(1). A negligence claim framed in this manner appears to be an issue of first impression in this jurisdiction. The issue is, what cause of action, if any, was created by the City's failure to follow and enforce its own mandatory ordinance, the only apparent purpose of which was to protect subcontractors and enable them to obtain payment.

Boulder City Municipal Code § 11-36-12(A) provided:

(A) Performance Bond or Deposit: If any required improvements have not been completed to the satisfaction of the City Engineer prior to the City Council approval of the final map, the subdivider shall file with the City Clerk a faithful performance bond in the amount deemed sufficient by the City Engineer to cover the cost of said improvements, engineering and inspection fees. The subdivider shall also file a bond in an amount required by law on bonds for public construction, and by its terms insure labor and materials payment for labor performed and materials rendered under the terms of the improvement agreement. Such bond shall be executed by a surety company authorized to transact a surety business in the State of Nevada, and must be satisfactory to and be approved by the City Attorney as to form [emphasis added]. In lieu of said faithful performance bond, the subdivider may deposit cash with the City in the amount fixed, as aforementioned, by the City Engineer.

Boulder City Municipal Code § 11-36-5(K)(1) and (L)(1) provided:

(K) Documents Required Prior to Approval of Final Map: The following shall be filed with the Planning Director prior to the final map being presented for action to the City Council:

1. Improvement Agreement and Performance Bond: The subdivider shall execute and file with the Planning Director an agreement between himself and Boulder City, specifying the period within which he shall complete all improvements and work in accordance with City specifications and standards to the satisfaction of the City Engineer. The subdivider shall also file with the Planning Director at the same time, a performance bond and a labor and material bond as required by Section 11-36-12 of this Chapter. Said improvement agreement and performance bond shall be approved as to form by the City Attorney.

....

(L) Action by City Council:

1. Within fifteen (15) days of the filing of the final map and other documents as required by this Chapter with the City Clerk, the City Council shall approve the map if it conforms with all applicable provisions of this Chapter and the Planning and Zoning Act of the State of Nevada. The time limit for approval of the map may be extended by mutual written consent of the City Council and the subdivider.

The successor provisions to these ordinances appear in a substantially similar form in BCMC § 11-39-12(A) and 11-39-5(L)(1) and (M). We see no merit in the negligent release of funds theory and decline to impose any liability on the City for its release of the performance deposit. However, the provisions of the ordinance which require a payment bond for labor and materials are clearly for the purpose of insuring payment to subcontractors who provide the labor and materials for the off-site improvements which ultimately inure to the ownership of the City.

Appellants correctly contend that BCMC § 11-36-12(A) required Boulder Development to file a payment bond covering labor and materials for the off-site improvements, and that the City was required to secure compliance with the provision before granting the necessary final map approval. Appellants contend that the City's negligence in failing to require a payment bond directly and proximately resulted in Boulder Development never obtaining such a bond. Consequently, when Boulder Development became insolvent and appellants' mechanics' liens were eliminated by the trustee's sale under the construction lender's deed of trust, appellants were unable to collect the amounts due them. Appellants conclude that if the City had required a payment bond, appellants would have recovered the money owed them. We agree.

It is elementary that statutes, or in this case municipal enactments, must be construed as a whole and not be read in a way that would render words or phrases superfluous or make a provision nugatory. People of California v. Tahoe Regional Planning Agency, 766 F.2d 1308, 1314 (9th Cir.1985); People v. Craft, 41 Cal.3d 554, 224 Cal.Rptr. 626, 629, 715 P.2d 585, 588 (1986). And, there is a presumption that every word, phrase and provision in the enactment has meaning. Alaska Transp. Com'n v. Airpac, Inc., 685 P.2d 1248, 1253 (Alaska 1984).

Accordingly, this court has generally declined to use judicial construction to alter the meaning of clearly expressed enactments. In the case of In re Walter's Estate, 60 Nev. 172, 183-84, 104 P.2d 968, 973 (1940), we held, quoting from State v. Jepsen, 46 Nev. 193, 196, 209 P. 501, 502 (1922):

Where the language of a statute is plain and unambiguous, and its meaning clear and unmistakable, there is no room for construction, and the courts are not permitted to search for its meaning beyond the...