General Insurance Company of America v. United States

• Decision Date: 04 April 1969
• Docket Number: No. 26241.,26241.
• Citation: 406 F.2d 442
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: GENERAL INSURANCE COMPANY OF AMERICA, Appellant, v. UNITED STATES for the Use of AUDLEY MOORE & SON, Appellee.

406 F.2d 442 (1969)

GENERAL INSURANCE COMPANY OF AMERICA, Appellant, v. UNITED STATES for the Use of AUDLEY MOORE & SON, Appellee.

No. 26241.

United States Court of Appeals Fifth Circuit.

January 21, 1969.

Rehearing and Partial Rehearing Denied April 4, 1969.

Don W. Davis, Irion, Cain, Cocke, Magee & Davis, Dallas, Tex., for appellant.

Jack G. Neal, Ramey, Ramey & Neal, Sulpher Springs, Tex., for appellee.

Before ALDRICH,^* GODBOLD and DYER, Circuit Judges.

Rehearing and Partial Rehearing En Banc Denied April 4, 1969.

GODBOLD, Circuit Judge:

Sulphur Springs, Texas has a new post office and federal building, and Audley Moore & Son, as a subcontractor of Professional Constructors, helped build it. Moore, not having been paid, made proper demand on Professional on May 4, 1966 for payment for labor and materials furnished. Payment was not made. This Miller Act case, 40 U.S.C.A. § 270a et seq., against General Insurance Company of America as surety on Professional's payment bond, was filed April 20, 1967.

The primary issue on appeal, which is dispositive of the case, is whether the claim was barred by the statute of limitations in the Act.¹ The trial judge overruled this defense and submitted the case to the jury, which returned a general verdict for appellee for the amount claimed.² The crux of the case is a determination of when the "last of the labor was performed or material was supplied."

It is undisputed that the only thing done by Moore after April 2, 1966 was to take final measurements and to make a final inspection pursuant to preparation of his final estimate or statement. This was done in the latter part of April. All other activity had ceased and all materials had been supplied as of April 2.³

We conclude that the limitations period began to run on April 2, 1966. Appellee had one year from that date in which to file suit. Going on the premises to make final inspections and measurements for the purpose of preparing a final estimate or statement is insufficient as a matter of law to constitute supplying labor within the meaning of 40 U.S.C.A. § 270b(b). Such activity involves no more "labor" than correcting defects in prior work. Yet correction of errors has been held insufficient to extend the time for filing suit. See United States ex rel. Austin v. Western Electric Co., 337 F.2d 568 (9th Cir. 1964); United States ex rel. Circle-L-Electric Co. v. Hyde Construction Co., 255 F.Supp. 335 (N.D.Okla. 1966); United States ex rel. McGregor Architectural Iron Co. v. Merritt-Chapman & Scott Corp., 185 F.Supp. 381 (M.D.Pa.1960).

Appellee's theory would defeat the purpose of the 1959 amendment to section 270b(b) and restore some of the uncertainty the amendment was designed to remove.⁴ Congress, by that amendment, attempted to set a specific, easily ascertainable date on which limitations begins to run. This court previously has said that the language of section 270b (b) is unambiguous and that the court must "give effect to the plain and obvious meaning of the statute without reading in or reading out." General Electric Co. v. Southern Construction Co., 383 F.2d 135, 138 (5th Cir. 1967). We will not depart from that rule now.

Appellee also claimed at the trial, and submitted to the jury, that appellant was estopped from asserting limitations as a defense because: (one), by its letter dated March 28, 1967 appellant led the "plaintiff to reasonably rely that the defendant would take some type of remedial action in seeing that plaintiff's claim was investigated and at a further date would advise him of what course of action the defendant planned to follow in connection with this claim;" (two), that appellee's attorney negotiated with the attorney for appellant about the joinder of General Insurance in a state court action but those negotiations failed and this action was instituted forthwith; (three), that a statement made in a letter from appellant's attorney to General Insurance about when the limitations period expired caused appellee to rely on that date as the date to file suit.

All of these matters are insufficient as a matter of law to create estoppel, under the circumstances of this case. The letter of March 28, 1967 is set out in the margin.⁵ It contained no representations or promises which might reasonably be expected to induce reliance by Moore or his attorneys to its detriment, nor was there any deception. McWaters & Bartlett v. United States, 272 F.2d 291 (10th Cir. 1959).

As for the other two bases of appellee's claim of estoppel, it need only be pointed out that the record shows conclusively that at the time of the alleged negotiations and the letter to General Insurance the attorney that appellee asserts was appellant's counsel was at that time counsel for Professional Constructors only. It was not until a later date that he undertook representation of General Insurance.

The district court is reversed with directions to enter judgment for appellant.

* Of the First Circuit, sitting by designation.

1 40 U.S.C.A. § 270b:

"(b) Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing * * *, but no such suit shall be commenced after the expiration of one year after the day on which the last...