Employment Sec. Commission of Ariz. v. Fish

• Decision Date: 03 October 1962
• Docket Number: No. 7381,7381
• Citation: 92 Ariz. 140,375 P.2d 20
• Parties: EMPLOYMENT SECURITY COMMISSION OF ARIZONA, Appellant, v. Jennings C. FISH, dba J. C. Fish Concrete Contracting; and United States Fidelity and Guaranty Company, Surety, Appellees.
• Court: Arizona Supreme Court

Page 20

375 P.2d 20

92 Ariz. 140

EMPLOYMENT SECURITY COMMISSION OF ARIZONA, Appellant, v. Jennings C. FISH, dba J. C. Fish Concrete Contracting; and United States Fidelity and Guaranty Company, Surety, Appellees.

No. 7381.

Supreme Court of Arizona, In Banc.

Oct. 3, 1962.

Robert W. Pickrell, Atty. Gen., Richard J. Daniels, Asst. Atty. Gen., Phoenix, for appellant.

Moore & Romley, Phoenix, for appellees, U. S. Fidelity and Guaranty Co.

LOCKWOOD, Justice.

In an action by plaintiff Employment Security Commission of Arizona against one Jennings C. Fish and his bonding company, United States Fidelity and Guaranty Company, defendants, the trial court entered a default judgment against Fish, and a summary judgment in favor of the bonding company. From the latter judgment plaintiff appealed.

The undisputed facts are that Fish, doing business as J. C. Fish Concrete Contracting, had qualified for and obtained an Arizona contractor's license, and had posted a $500 surety bond, as required. During the time the bond was in force, Fish incurred liability for unemployment insurance contributions, but refused to make payments, thereon. Thereupon the commission brought the action against Fish and his bonding company, maintaining that the commission's claim for the tax contributions was within the purview of the bond. The trial court by its summary judgment rules against this contention. The sole question for decision is the interpretation of A.R.S. § 32-1152 in relation to whether the bond required therein extends to failure by a contractor to pay unemployment compensation contributions.

At the time the action was brought, subparagraph C of § 32-1152, prescribing the conditions of the bond, read as follows:

'C. The bonds shall be in such form as the registrar prescribes and shall be approved by him. The bonds shall provide that the state or any person damaged by reason of any failure on the part of the principal, his agents or employees to comply with the provisions of this chapter, or amendments hereto, or rules and regulations made pursuant to this chapter, to complete any contract undertaken by the contractor pursuant to the authority of his license, or to pay material or labor bills, may maintain an action at law against the contractor and surety and that such bond may be sued upon in successive actions until the whole penalty thereof is exhausted.' (Italics supplied)

The italicized portion contains the language in dispute. The commission claims that it means that failure to comply with any requirements imposed on contractors in A.R.S. Chapter 10, subjects the bond to liability. Defendant bondsman claims that the words 'to complete any contract undertaken by the contractor pursuant to the authority of his license' must be read as a necessary defining of the limits to which the 'failure * * * to comply with the provisions of this chapter' makes the bond liable. In other words, defendant claims it was the intent of the legislature under subparagraph C that the bond should be subjected to liability by any person including the state, who had entered into a contract for the contractor's services under the authority of his license, when and if the contractor failed to complete such contract as required by any of the provisions of Chapter 10.

It is so axiomatic as to need no citation that the object of statutory interpretation is to determine the meaning and intent of the legislature. If the words of the statute are plain and unambiguous, courts will not go outside the language itself for interpretation. Ernst v. Collins, 81 Ariz. 178, 302 P.2d 941 (1956). Where the words may be susceptible of more than one meaning, the court must adopt such interpretation as is reasonable. Hart v. Arganese, 82 Ariz. 380, 313 P.2d 756 (1957). In seeking the reasonable interpretation, where there is an apparent ambiguity, the court will not be bound by the letter, but will consider the statute as a whole to determine its intent and purpose. Adams v. Bolin, 77 Ariz. 316, 271 P.2d 472 (1954). Since the statute here is not completely free of ambiguity, we will look to the legislative intent.

The two sections here involved are part of what may be termed a code regulating contractors, now designated Chapter 10, A.R.S. The first legislative act embodying such a code was passed in 1931. ¹ Section 9 of that act set forth grounds for suspension or cancellation of licenses, enumerating certain acts of omission and commission, including 'abandonment of any contract without legal excuse' and 'fraudulent departure from, or disregard of, plans or specifications in any material respect, without the consent of the owner or his duly authorized representative.' No provision was made for filing of any bond. This code was amended in a number of particulars not material here, in 1933 ² and as amended was compiled as A.C.A.1939, chapter 67, Art. 8. The entire Article was repealed and a new code enacted in 1951. ³ The section on suspension and revocation of licenses was amplified, and designated more specifically the grounds therefor. ⁴ No requirement was made in any of the codes or amendments up to this point for filing a bond.

For the first time in 1952 the legislature added a section requiring a contractor to furnish 'to the owner or other contracting party' a bond in the amount of the contract, 'Conditioned upon completion of the contract according to its terms and payment of all subcontract labor, and material supplier charges.' ⁵ The existing section covering grounds for suspension or revocation was not changed. In 1955 the legislature repealed the provision of the 1952 completion bond requirement and enacted a new section, ⁶ which was carried forward in the 1956 Code as § 32-1152, supra. The new statute provided for continuing bonds for each category of contractor,...