Finish Line v. J.F. Pate & Assocs. Contractors, Inc.

• Decision Date: 17 February 2012
• Docket Number: 2100006.
• Citation: 90 So.3d 749
• Court: Alabama Court of Civil Appeals
• Parties: The FINISH LINE d/b/a Clay, Metal and Stone v. J.F. PATE & ASSOCIATES CONTRACTORS, INC., and Western Surety Company.

90 So.3d 749

The FINISH LINE d/b/a Clay, Metal and Stone

v.J.F. PATE & ASSOCIATES CONTRACTORS, INC., and Western Surety Company.

2100006.

Court of Civil Appeals of Alabama.

Feb. 17, 2012.

John R. Frawley, Jr., Irondale, for appellant.

David F. Daniell of Daniell, Upton, Perry & Morris, P.C., Daphne, for appellees.

PITTMAN, Judge.

The Finish Line, doing business as Clay, Metal and Stone (“Finish Line”), appeals from summary judgments in favor of J.F. Pate & Associates Contractors, Inc. (“Pate”), and Western Surety Company (“Western”) on its “little Miller Act” claims against them. SeeAla.Code 1975, § 39–1–1 et seq. We affirm.

Facts and Procedural History

The Baldwin County Board of Education (“the Board”) employed Pate as the general contractor for the construction of Foley Middle School. Pate entered into a subcontract with Delta Flooring, Inc. (“Delta”), to provide labor, materials, and equipment for the installation of tile, resilient flooring, and carpet in the school. Amendment (A) to the subcontract contained the following provision:

“Note: This is a tax exempt project. All material purchases will be made by special purchase order forms obtained by [Pate's] office. Invoices for these materials should be made out to Baldwin County Board of Education c/o (your company's name)—and the original copies should be submitted with your application for payment.”

On May 9, 2007, Pate, in its capacity as purchasing agent for the Board, signed a purchase order for 5,000 square feet of Seneca tile at a cost of $39,075. The purchase-order form designated Finish Line as the vendor, Delta as the party to whom the tile should be shipped, and the “Board c/o Delta” as the entity to whom the invoice for payment should be sent. Finish Line filled the order and shipped the tile to Delta in June 2007. It is undisputed that Finish Line received payment in the amount of $39,075 for the tile from Pate. Delta stored the tile in its warehouse until April 2008, when Pate instructed Delta to install the tile in the canteen area of the school gymnasium. On May 8, 2008, before Delta finished the installation, Jim Walker of Goodwyn, Mills and Cawood, the project architect, and John Pate, the chief operating officer of Pate, met with representatives of Finish Line and Delta to inspect the tile that had been installed. The architect found the tile “unacceptable due to the irregularities and inconsistencies in ... shape, surface and appearance.” Finish Line requested and was given an opportunity to cure the problem. On May 22, 2008, the architect, having concluded that Finish Line's proposed solution would not cure the problem, sent Pate a memorandum formally rejecting the tiles, directing their removal, and ordering the installation of an alternate tile product. It is undisputed that Pate ordered and paid for the alternate tiles. Meanwhile, on April 30, 2008, Pate, in its capacity as purchasing agent for the Board, had signed another purchase order for additional flooring materials to be installed in other areas of the school. The party designations on that purchase order were the same as those on the first purchase order; Finish Line was named as the vendor, Delta as the party to whom the materials should be shipped, and the “Board c/o Delta” as the entity to whom the invoice for payment should be sent. Delta installed the flooring materials in the school, and Finish Line sent Delta an invoice in the amount of $34,123.12. Pate refused payment on that invoice, asserting that it was entitled to a setoff for the $39,075 payment it had made earlier for the Seneca tiles that had been rejected by the architect.

On February 19, 2009, Finish Line sued Pate, Pate's surety (Western), Delta, and two individuals who had signed personal guaranties for the credit Finish Line had extended to Delta. The complaint assertedone claim: that “the defendants” had failed and refused to pay for flooring materials that Finish Line had supplied to the Foley Middle School construction project. Pate answered and asserted, among other defenses, that Finish Line lacked standing to sue Pate because Finish Line was not in privity of contract with Pate; that Finish Line had supplied a defective product that had been rejected by the architect and that had not been incorporated into the school; and that Pate was entitled to set off the amount it had paid for the defective tiles against the amount Finish Line demanded in the complaint. Western asserted the same defenses and contended that it was not liable to Finish Line because, it said, Pate was not liable to Finish Line. Pate also cross-claimed against Delta, alleging breach of contract, breach of warranty, and contractual and common-law indemnity. Specifically, Pate alleged that Delta had provided defective and/or nonconforming materials for the construction project—materials that had been rejected by the project architect.

Delta answered the complaint and moved for a partial summary judgment on the claim asserted by Finish Line, contending that it was not liable to pay Finish Line because, it said, it was not the purchaser of the flooring materials and it was not in privity of contract with Finish Line. Delta asserted that Pate, as the Board's agent, not Delta, had ordered and was responsible to pay for the materials supplied by Finish Line. Delta also denied that its installation of the Seneca tiles was the reason for the architect's rejection of the tiles and the Board's refusal to pay Finish Line's second invoice.¹ Delta also answered Pate's cross-claim, generally denying all the allegations therein.

In opposition to Delta's motion for a partial summary judgment, Finish Line asserted that the problem with the Seneca tiles had been the result of Delta's faulty installation. In support of that assertion, Finish Line submitted the affidavit of Jim Smith, its credit manager, who stated:

“[T]he tiles supplied to both the Foley Middle School and Fairhope Middle School were manufactured by Seneca Tiles at the same time, in the same plant, and were the same used in both schools.

“We assert that improper installation methods contributed to the rejection of the installation at Foley Middle School. Upon visual examination of the job prior to tear out, it was evident that the grout joints were significantly smaller than the 3/8? joint recommended by the manufacturer. Also, in conversation with the installers we were told that they used 1/4? trowels to set these tiles, half the size of the 1/2? trowel knot size recommended by the manufacturer.

“This same material was installed by an Atlanta based contractor in the Fairhope Middle School without incident and was accepted by the general contractor and the County Board of Education. The material provided on both school jobs was manufactured at the same time and both jobs shipped from the same production run.

“The architect, Goodwyn, Mills & Cawood of Alabama, specified the Seneca Tiles used on both jobs and accepted the material as properly installed on the Fairhope Middle School [project].”

The trial court granted Delta's motion for a partial summary judgment and certified that judgment as final under Rule 54(b), Ala. R. Civ. P. The trial court subsequently granted summary-judgment motions filed by Pate, Western, and Delta's guarantors. The trial court did not specify its reasons for granting any of the summary-judgment motions. Finish Line filed a postjudgment motion; after that motion was denied, Finish Line appealed to this court from the trial court's judgments in favor of Pate and Western. ²

Standard of Review

Appellate review of a summary judgment is de novo. Ex parte Ballew, 771 So.2d 1040 (Ala.2000). A motion for a summary judgment is to be granted when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. A party moving for a summary judgment must make a prima facie showing “that there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.” Rule 56(c)(3); see Lee v. City of Gadsden, 592 So.2d 1036, 1038 (Ala.1992). If the movant meets this burden, “the burden then shifts to the nonmovant to rebut the movant's prima facie showing by ‘substantial evidence.’ ” Lee, 592 So.2d at 1038 (footnote omitted). “[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.” West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989); see§ 12–21–12(d), Ala.Code 1975.

Discussion

I.

This case arises under Ala.Code 1975, § 39–1–1 et seq., commonly known as the “little Miller Act.” Section 39–1–1 provides, in pertinent part:

“(a) Any person entering into a contract with an awarding authority in this state for the prosecution of any public works shall, before commencing the work, execute a performance bond, with penalty equal to 100 percent of the amount of the contract price. In addition, another bond, payable to the awarding authority letting the contract, shall be executed in an amount not less than 50 percent of the contract price, with the obligation that the contractor or contractors shall promptly make payments to all persons supplying labor, materials, or supplies for or in the prosecution of the work provided in the contract and for the payment of reasonable attorneys' fees incurred by successful claimants or plaintiffs in civil actions on the bond.

“(b) Any person that has furnished labor, materials, or supplies for or in the prosecution of a public work and payment has not been made may institute a civil action upon the payment bond and have their rights and claims adjudicated in a civil action and judgment entered thereon.”

The statute is patterned after the federal “Miller Act,” 40 U.S.C. §§ 3131–3133, see Federal Ins. Co. v. I. Kruger, Inc., 829 So.2d 732, 734 (Ala.2002), and “[t]he...