JS Sweet Co. v. White County Bridge, No. 65A01-9712-CV-416.

• Docket Nº: No. 65A01-9712-CV-416.
• Citation: 714 N.E.2d 219
• Case Date: June 29, 1999
• Court: Court of Appeals of Indiana

714 N.E.2d 219

J.S. SWEET CO., INC., Appellant-Plaintiff,
v.
WHITE COUNTY BRIDGE COMMISSION, Appellee-Defendant

No. 65A01-9712-CV-416.

Court of Appeals of Indiana.

June 29, 1999.

714 N.E.2d 221

Julia Blackwell Gelinas, Terrence L. Brookie, Locke Reynolds Boyd & Weisell, Indianapolis, Indiana, Attorneys for Appellant

K. Richard Hawley, Hawley Hudson & Hawley, Mt. Vernon, Indiana, Attorney for Appellee.

714 N.E.2d 220

OPINION

SHARPNACK, Chief Judge.

J. S. Sweet Co., Inc. ("Sweet") appeals the trial court's judgment in its contract action against the White County Bridge Commission ("Commission"). Sweet raises four issues which we restate as follows:

1) whether the trial court erroneously concluded that a bridge operated by the Commission was public property thereby precluding the perfection of a mechanic's lien filed by Sweet;

714 N.E.2d 222

2) whether the trial court erroneously denied Sweet prejudgment interest on its judgment against the Commission

3) whether the trial court erroneously determined that, under the contract, Sweet was not entitled to recover compensation for excess milling; and

4) whether the trial court erroneously determined that, under the contract, Sweet was not entitled to recover compensation for excess overlay material applied to the bridge surface.

On cross-appeal, the Commission raises two issues which we restate as:

1) whether the trial court erroneously employed Sweet's measurements rather than those offered by the Commission in calculating the payment due to Sweet for patching; and

2) whether the trial court erroneously failed to find that Sweet breached the contract in regards to the minimum thickness of epoxy overlay material to be applied.

We affirm in part, reverse in part, and remand with instructions.

The relevant facts follow. In 1994, Sweet submitted a bid proposal to the Commission for repair work on the New Harmony Toll Bridge in New Harmony, Indiana. Sweet's bid was accepted and Sweet entered into a contract with the Commission whereby Sweet was to furnish the labor, materials, equipment and supervision to perform repair work on the bridge. The contract called for Sweet to remove the top one quarter inch of concrete and any bad concrete found on the deck. Sweet was then to patch any resulting holes and place an epoxy overlay system back on the deck to protect the deck and provide a wearing surface.

In 1995, following a dispute with the Commission over payment for work completed, Sweet filed a mechanic's lien against the bridge. Sweet then filed a complaint against the Commission seeking foreclosure of the lien alleging unjust enrichment and breach of contract. The Commission responded with a counterclaim against Sweet for breach of contract. The Commission filed a motion for partial summary judgment with respect to the mechanic's lien asserting that Sweet was not entitled to a lien on the bridge because it is public property. The trial court granted the motion. Following a trial on the remaining claims, the trial court awarded Sweet $78,868.64.

I.

The first issue raised is whether the trial court erroneously granted the Commission's motion for summary judgment on the issue of whether Sweet is precluded from perfecting a mechanic's lien against the bridge. Summary judgment is appropriate when the evidentiary matter designated to the trial court shows both that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Aide v. Chrysler Financial Corp., 699 N.E.2d 1177, 1180 (Ind.Ct.App. 1998), trans. denied. Summary judgment will be affirmed on appeal if it is sustainable on any theory or basis found in the evidentiary matter designated to the trial court. Id. Because the parties do not dispute the relevant facts in this case, we will decide this matter as a question of law. Id. Where there are no disputed facts and the question presented is a pure question of law, we review the matter de novo. Id.

Sweet asserts that the bridge is private property and, therefore, subject to a mechanic's lien. See Ind.Code § 32-8-3-1.¹ The Commission responds that because the Commission was established by federal statute for the purposes of building and maintaining the bridge, the bridge constitutes a federal public work, thereby precluding the perfection of a lien.² See Pub.L. 37, Ch. 71, 55 Stat. 140 (1941).

714 N.E.2d 223

The supreme court has explained the purpose of a mechanic's lien as follows

"The mechanics' lien laws of America, in general, reveal the underlying motive of justice and equity in dedicating, primarily, buildings and the land on which they are erected, to the payment of the labor and materials incorporated, and which have given to them an increased value. The purpose is to promote justice and honesty, and to prevent the inequity of an owner enjoying the fruits of the labor and materials furnished by others, without recompense. . . ."

Moore-Mansfield Construction Company v. Indianapolis, Newcastle and Toledo Railway Company, 179 Ind. 356, 372, 101 N.E. 296, 302 (1913). Mechanic's liens have not been permitted to attach to public property held for public use. City of Evansville v. Verplank Concrete & Supply, Inc., 400 N.E.2d 812, 816 (Ind.Ct.App.1980). "`(P)ublic policy and public necessity alike forbid the acquisition or enforcement of such a lien.' It requires very little imagination to realize how disruptive the attachment and attempted foreclosure of such liens might be to the orderly operation of state and local government." Id. (quoting Repp & Mundt, Inc. v. Hitzelberger Supply Co., Inc., 170 Ind.App. 539, 540-541, 353 N.E.2d 547, 548 (1976)). State law liens may not be asserted against federally owned lands or buildings. U.S. ex rel. Mississippi Road Supply Co. v. H.R. Morgan, 542 F.2d 262, 265 (5th Cir.1976), cert. denied, 434 U.S. 828, 98 S.Ct. 106, 54 L.Ed.2d 86 (1977), overruled on other grounds 554 F.2d 164, 166 (5th Cir.1977). Therefore, the question we must address is whether the bridge is a federal public work, thereby precluding the attachment of a state mechanic's lien.

In arguing that the bridge is either private or public property, the parties discuss characteristics of both the bridge and the Commission that support their respective positions. For example, in support of its conclusion that the bridge is public property, the Commission asserts that it is an agency created by federal statute, is exempt from federal and state income taxes, and that the Commission has the power of eminent domain. On the other hand, Sweet asserts that the bridge is private property because the Commission pays property taxes, the bridge is financially supported solely by tolls, receives no federal or state tax money,³ and the Commission, not any government entity, holds title to the bridge. Having carefully weighed each of these relevant characteristics, we conclude that the bridge does not fall neatly into either the public or the private category. Therefore, we turn to case law that has specifically defined "federal public work" in the context of disputes between contractors and the federal government.

The Miller Act, 40 U.S.C. § 270, was passed to protect subcontractors and materialmen working on federal projects because normal state lien rights are not available to them. U.S. for use of General Electric Supply Co., 11 F.3d 577, 580 (6th Cir.1993). However, the protection of this statute is only afforded to those working on a "public building or public work of the United States." 40 U.S.C. § 270a(a). Although the statute itself does not define "public work," a definition has been developed by courts in determining the applicability of the Miller Act to a variety of scenarios.

714 N.E.2d 224

In U.S. for use of General Electric Supply Co., the Sixth Circuit held that a federal district court had no jurisdiction under the Miller Act because the suit did not involve a federal public work. General Electric, 11 F.3d at 583. The work in dispute was a city waste water treatment plant funded by a loan from the United States through the Farmers Home Administration. The court concluded that the mere fact that the U.S. government was a funding source for the project did not make the plant a federal "public work." Id. Furthermore, the court noted that the U.S. government did not own the property, was not the intended owner of the property, and was not a party to the construction contract. Id.; see also U.S., for use of Motta v. Able Bituminous Contractors, Inc., 640 F.Supp. 69, 71 (D.Mass.1986) (holding that application of the Miller Act required, at a minimum, that the U.S. be a contracting party and that a bond be issued in its favor); U.S. ex rel Miller v. Mattingly Bridge Co., 344 F.Supp. 459, 462 (W.D.Ky 1972) (holding that the Miller Act did not apply to the construction of an interstate highway where the U.S. was not a party to the contract and there was no bond issued in favor of the U.S.); Mississippi Road Supply, 542 F.2d at 265 (extending the Miller Act's applicability to situations where the U.S. obtains ownership after construction is complete). Here, the federal government did not own the bridge, was not a party to the contract with Sweet, nor have any federal funds been appropriated to the building or maintenance of the bridge.⁴ Therefore, we conclude that the bridge does not, under any definition established by case law, qualify as a federal public work. Therefore, as we find that the bridge does not qualify as either a state or federal public work, the public work prohibition against liens on public works does not apply to the bridge.

We also find further support for our conclusion in the act which created the Commission. The act authorizes the Commission to secure payment for the bridge through both the issuance of bonds and by a mortgage. Pub.L. 37, Ch. 71, § 4, 55 Stat. 140 (1941). As the statute specifically provided that the bridge may be subjected to a lien by a mortgage...