Luong v. W. Sur. Co.
| Decision Date | 23 April 2021 |
| Docket Number | Supreme Court No. S-17593 |
| Parties | Dat LUONG, d/b/a LVDH Construction, Petitioner, v. WESTERN SURETY COMPANY, Respondent. |
| Court | Alaska Supreme Court |
Dat Luong, pro se, Fresno, California, Petitioner.
Traeger Machetanz, Anne Marie Tavella, and Chad Darcy, Davis Wright Tremaine LLP, Anchorage, for Respondent.
Before: Bolger, Chief Justice, Winfree, Maassen, Carney, and Borghesan, Justices.
The employee of a subcontractor on a state public works project sued the prime contractor's surety bond for unpaid labor under Alaska's Little Miller Act. The trial court ruled the employee failed to give notice to the contractor within the statutorily required 90 days of his last date of labor on the project. The trial court entered a directed verdict against the employee. The employee appealed to the superior court, which denied the appeal, and then petitioned this court for hearing.
We granted the petition to decide two issues of first impression: (1) how to define "labor" and (2) whether "notice" is effective on the date of mailing or the date of receipt. Under the Little Miller Act, we define "labor" as work that is "necessary to and forwards" the project secured by the payment bond, and hold the effective date of "notice" to be the date notice is sent via registered mail. We reverse the superior court's denial of Luong's appeal, vacate the judgment against him, and remand for further proceedings.
Earth Stone, Inc. hired Dat Luong in December 2014 to serve as vice president and estimator. Earth Stone provided finish-concrete work for the prime contractor, Pinnacle Construction, Inc., on a municipal library remodeling project. Western Surety Company provided the surety bond for Pinnacle on the project.1
In early 2015 Luong performed a variety of tasks for Earth Stone on the project, but by April he had stopped receiving consistent payment for his work.2 Many of Luong's duties were supervisory, but his work on the project included physical tasks like mixing and pouring concrete. Luong helped with the last concrete pour at the project on October 9, 2015. This is the last date that both parties agree Luong provided labor on the project.
On January 6, 2016, 89 days after the last concrete pour, Luong requested $8,379.90 in back wages from Pinnacle in a letter sent by registered and certified mail. As confirmed by a signed receipt, Pinnacle received this letter on January 11, 94 days after the final concrete pour. Western Surety asserts that Luong's testimony is the only evidence of when the letter was sent. But the letter is dated January 6, and Western Surety presented no evidence the letter was mailed on a different date.
On July 26, Luong sent Pinnacle another letter reminding them he had yet to be paid for his work on the project. This letter notified Pinnacle that Luong had received a judgment in California against Earth Stone for work performed, and this judgment had now been "effectuated and recorded in Alaska."
Luong filed suit in small claims court, requesting $8,945.21 for unpaid labor from Pinnacle's payment bond with Western Surety under the Little Miller Act.3 The district court granted Western Surety's request for formal procedures.
Western Surety moved for summary judgment, arguing that no genuine issue of material fact existed as to whether Luong's supervisory work qualified as "labor" under the Little Miller Act. The district court judge who initially oversaw the case disagreed, observing a general consensus among courts in various jurisdictions interpreting the term to at least include work performed at the job site.
After a transfer to a new district court judge, a bench trial was held over three days in March and April of 2018. Three witnesses testified to the range of tasks Luong performed on the project, including supervisory tasks on and off the project site and physical labor involved with laying concrete at the project site. Luong testified that he undertook these physical tasks — laying concrete, carrying materials, and cleaning up the site — when chronic non-payment by Earth Stone led to a shortage of workers. Earth Stone foreman Willie House specifically testified he and Luong were the only employees left at the job site by October 9, 2015, the date of the last concrete pour.
At the close of Luong's case, Western Surety moved for a directed verdict, arguing Luong had not provided notice until January 11, 2016, and therefore needed to prove he provided "labor" on or after October 13, 2015 in order to meet the 90-day notice deadline for him to sue under the Little Miller Act.4 Western Surety emphasized that it was the last day Luong provided "labor" on the project that was relevant, not the last day he worked for Earth Stone in general. Luong responded that the January 6 letter provided timely notice of his claim. Luong also asserted he performed labor even after the October 9 concrete pour.5
The trial judge interpreted "labor" in the Little Miller Act to include supervisory tasks only if they were performed on the job site. The judge concluded Luong failed to establish he performed labor at the job site within 90 days of the notice he provided to Pinnacle. The court noted that two of Luong's exhibits indicate his last day of work for Earth Stone at the project was October 9, 2015, more than 90 days before January 11, 2016. The court assumed the operative date of notice was January 11, 2016, the date Pinnacle received the letter from Luong's attorney. The trial judge granted Western Surety's motion for directed verdict and awarded attorneys’ fees to Western Surety.
Luong appealed to the superior court, which denied his appeal. The superior court did not address Luong's notice argument. Rather, it too assumed Luong "provided notice on January 11, 2016" and thus "must show that he performed labor on or after October 13, 2015." The superior court explained that neither the testimony nor exhibits properly admitted into evidence at trial constituted "evidence that [Luong] provided labor during the notice period."6 The superior court did not attempt to define the term "labor" under the Little Miller Act, nor did it attempt to specify when it considered the last day of "labor" to have been. Luong moved for reconsideration, which the superior court denied.
Luong then filed a petition for hearing with this court. We granted Luong's petition on two issues of first impression regarding Alaska's Little Miller Act: (1) what constitutes "labor" under AS 36.25.020(b), and (2) whether the effective date of "notice" under that section is the date of mailing or the date of receipt.
"Determinations of which legal authorities apply in a case and interpretations of what those legal authorities mean are questions of law subject to de novo review."7 "When applying the de novo standard of review, we apply our ‘independent judgment ... adopting the rule of law most persuasive in light of precedent, reason, and policy.’ "8
Alaska's Little Miller Act requires prime contractors on public works projects to maintain a payment bond.9 If "a person having direct contractual relationships with a subcontractor" is not paid in full, that person "has a right of action on the payment bond."10 That right is conditioned on a requirement to "giv[e] written notice to the contractor within 90 days from the last date on which the person performed labor or furnished material for which the claim is made."11
The statutory purpose of the Little Miller Act "is to protect persons who furnish labor or material for a state public works project from the risks of nonpayment."12 In turn, the state is "assured that material and labor will be readily furnished for its projects," as people "who furnish labor and materials for the state's projects do so in reliance on the existence of a valid payment bond."13
Alaska's Little Miller Act is modeled after the federal Miller Act. When resolving disputes brought under the Little Miller Act, we "give more weight to principles derived from federal case law interpreting the Miller Act than to general common law principles governing debtor-creditor relations."14 We have previously said that the Little Miller Act, "like the federal Miller Act, is remedial in nature and is to be liberally construed to effectuate its purpose."15
The United States Supreme Court has long favored a liberal construction of "labor" and "materials" under the Miller Act and its predecessor, the Heard Act.16 The Court has "repeatedly refused to limit the application of the [A]ct to labor and materials directly incorporated into the public work."17 For instance, the Court explained in U.S. Fidelity & Guaranty Co. v. Bartlett that "bids ... to show samples of stone and names and locations of quarries to be used as the source of supply" were "necessary to the performance of the contract" and that associated work was "labor."18 Even stablehands who did not work at the ultimate site, but rather fed the horses who powered the carts that carried stone to a quarry dock for shipment to the site, performed compensable "labor."19 Likewise a claimant who furnished the designs used by the contractor in the molding process to make parts for a ship could be compensated for this "labor."20
Not all federal courts agree on how to define "labor" under the Miller Act, but they consistently focus their inquiry on the types of tasks performed.21 Some courts define "labor" as "physical toil."22 Under this definition, work performed "by a professional, such as an architect or engineer," only qualifies as "labor" if the professional "actually superintends the work as it is done on the job site."23 Similarly some courts have reasoned that clerical and...
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