Lennox Industries, Inc. v. City of Davenport, 66553

• Court: United States State Supreme Court of Iowa
• Citation: 320 N.W.2d 575
• Docket Number: No. 66553,66553
• Parties: LENNOX INDUSTRIES, INC., Appellant, v. CITY OF DAVENPORT, Iowa; Shir-Jim, Inc., d/b/a Northwest Plumbing & Heating Co.; Insurance Co. of North America, Appellees, Schebler & Co. and ABC Supply Co., Defendants.
• Decision Date: 16 June 1982

Page 575

320 N.W.2d 575 LENNOX INDUSTRIES, INC., Appellant,
v.
CITY OF DAVENPORT, Iowa; Shir-Jim, Inc., d/b/a Northwest Plumbing & Heating Co.; Insurance Co. of North America, Appellees,
Schebler & Co. and ABC Supply Co., Defendants. No. 66553. Supreme Court of Iowa. June 16, 1982.

Page 576

William M. Tank of Cartwright, Druker & Ryden, Marshalltown, and Realff H. Ottesen of Ottesen & Ottesen, Davenport, for appellant.

Edward B. de Silva and John T. Flynn of Wells, Brubaker, de Silva, Gallagher, Flynn & Darland, Davenport, for appellees Shir-Jim, Inc., and Insurance Co. of North America.

Scott Hartsook, City Atty., Davenport, for appellee City of Davenport.

Considered by REYNOLDSON, C. J., and HARRIS, ALLBEE, McGIVERIN, and SCHULTZ, JJ.

REYNOLDSON, Chief Justice.

Plaintiff Lennox Industries, Inc. (Lennox), brought this equity action to establish its claim under chapter 573, The Code 1979, for materials furnished ABC Supply Co. (ABC), which it alleged was a subcontractor on a public improvement project. Trial court, finding that ABC was a materialman and not a subcontractor, held Lennox could not recover. We reverse and remand.

In December 1977 the City of Davenport took bids to remodel a police station. Shir-Jim, Inc., d/b/a Northwest Plumbing & Heating Co., was the successful bidder for the mechanical work. It entered into a contract with the city to provide and install the plumbing and heating and cooling equipment for the sum of $144,500. Defendant Insurance Company of North America (INA) provided a performance bond as required by sections 573.2--.5, The Code.

The job specifications required Lennox heating and cooling units. Shir-Jim could have obtained the equipment directly from Lennox. However, in order to comply with federal regulations requiring participation by minority contractors, it ordered the Lennox equipment from ABC of Topeka, Kansas. ABC ordered the equipment from Lennox. The latter company sent it directly to Schebler & Co. in Davenport. Shir-Jim had contracted with Schebler to install this equipment. Aside from two telephone conversations, minimal correspondence, and a minor revision in the purchase order contract, ABC had little contact with Shir-Jim on the police station project. The equipment units ordered from Lennox were not "standard" and were in stock only "sometimes."

Shir-Jim paid ABC for these units in one payment of $22,875. ABC did not pay Lennox. Lennox sued ABC in Kansas, obtained a judgment for $22,814.50 with interest and costs, but collected only $300. Lennox then brought this suit against Davenport, Shir-Jim, Schebler, ABC, and INA to establish its claim against the $14,450 contract retainage held by the city, and against INA on its bond. Schebler was dismissed as a party defendant. ABC did not appear.

I. The parties agree the fighting issue in this case is whether ABC was a "subcontractor" as that word appears in section 573.7, The Code:

Any person, firm, or corporation who has, under a contract with the principal contractor or with subcontractors, performed labor, or furnished material ... in the construction of a public improvement, may file, with the officer, board, or commission authorized by law to let contracts for such improvement, an itemized, sworn, written statement of the claim for such labor, or material ....

(Emphasis added.) No one contends Lennox did not meet all filing requirements. Thus, if ABC was a section 573.7 "subcontractor," Lennox has a claim against the retainage, Shir-Jim and INA for payment

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for its equipment, and attorney fees. See §§ 573.18--.22, The Code.

II. Lennox argues that because chapter 573 does not define "subcontractor" we should adopt the definition in subsection 572.1(2), The Code. Although section 573.1 ("Terms defined") has been amended since the broad subsection 572.1(2) definition has been in effect, the legislature has...