Paradigm Contract v. St. Paul Fire & Marine

• Decision Date: 06 October 2009
• Docket Number: No. 18301.,18301.
• Citation: 293 Conn. 569,979 A.2d 1041
• Court: Connecticut Supreme Court
• Parties: PARADIGM CONTRACT MANAGEMENT COMPANY v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY.

979 A.2d 1041

293 Conn. 569

PARADIGM CONTRACT MANAGEMENT COMPANY v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY.

No. 18301.

Supreme Court of Connecticut.

Argued April 20, 2009.

Decided October 6, 2009.

John-Henry M. Steele, for the appellant (plaintiff).

Ernest J. Mattei, with whom was Jason S. Weathers, Hartford, for the appellee (defendant).

NORCOTT, KATZ, PALMER, VERTEFEUILLE and McLACHLAN, Js.

McLACHLAN, J.

This case presents the narrow issue of whether any claim that may be asserted against a labor and material payment bond required by General Statutes (Rev. to 1995) § 49-41¹ must be asserted within the time limit provided in General Statutes (Rev. to 1995) § 49-42(b).² The plaintiff, Paradigm Contract Management Company, brought this action against the defendant, St. Paul Fire and Marine Insurance Company, seeking to enforce, pursuant to § 49-41, a labor and material payment bond that the defendant had executed in connection with a municipal construction project. The defendant filed a motion to dismiss the action on the ground that it was barred by the statute of limitations set forth in § 49-42(b). The trial court granted the motion to dismiss. The plaintiff appeals³ from the judgment of the trial court, claiming that § 49-42(b) does not apply to this action because the plaintiff had not brought the action pursuant to § 49-42 but, rather, had brought a common-law action on the bond, and the parties had entered into a tolling agreement whereby they had agreed to extend the statute of limitations. We affirm the judgment of the trial court.

The record reveals the following facts, the truth of which we assume for purposes of the issue raised in this appeal. See Thomas v. West Haven, 249 Conn. 385, 392, 734 A.2d 535 (1999) ("[i]n evaluating a motion to dismiss, [t]he evidence offered by the plaintiff is to be taken as true and interpreted in the light most favorable to [the plaintiff], and every reasonable inference is to be drawn in [the plaintiff's] favor" [internal quotation marks omitted]), cert. denied, 528 U.S. 1187, 120 S.Ct. 1239, 146 L.Ed.2d 99 (2000). On April 1, 1997, the defendant, as surety, and Metcalf and Eddy, Inc. (Metcalf), as general contractor and principal, executed a labor and material payment bond as required by § 49-41 in the amount of $8.9 million in favor of the city of Danbury (city) in connection with a construction contract for the closure of the city's municipal landfill (project). Under the terms of the bond, Metcalf and the defendant bound themselves to make payments promptly to all claimants furnishing labor and materials to the project.⁴ The bond provided in relevant part that "[n]o suit or action shall be commenced hereunder by any claimant ... [a]fter the expiration of one ... year following the date on which [Metcalf] ceased work on said [c]ontract, it being understood, however, that if any limitation embodied in this bond is prohibited by any law controlling the construction hereof such limitation shall be deemed to be amended so as to be equal to the minimum period of limitation permitted by such law...."

The plaintiff was a subcontractor of Poole and Kent-New England, Inc., which, in turn, was a subcontractor of Metcalf on the project. In 1999, the plaintiff brought a timely action against the defendant alleging that the plaintiff had provided labor and materials for the project for which it had not been paid and seeking payment from the defendant under the bond. Thereafter, the plaintiff and the defendant entered into a written tolling agreement, with an effective date of April 19, 2002, pursuant to which the plaintiff agreed to withdraw the action on the bond and the defendant agreed to waive any statute of limitations defenses that might arise after the effective date of the agreement.⁵ The defendant agreed that this waiver would remain in effect for a period of one year after the effective date of the agreement.

On February 26, 2003, the plaintiff brought another action seeking payment under the bond. Thereafter, the defendant filed a motion to dismiss the plaintiff's complaint on the ground that it was barred by the time limitation set forth in § 49-42. The trial court, Adams, J., denied the motion to dismiss. The defendant then filed a second amended answer in which it claimed as an affirmative defense that the plaintiff's action was time barred under § 49-42. The defendant also raised a counterclaim for attorney's fees pursuant § 49-42, claiming that the plaintiff's action was without substantial basis in law or fact. The plaintiff filed a motion to dismiss the counterclaim on the ground that it was time barred under § 49-42. The defendant then filed a second motion to dismiss the plaintiff's complaint on the ground that it was time barred under § 49-42.

The trial court, Jennings, J., granted the defendant's motion to dismiss the complaint on the ground that the plaintiff had commenced the action more than one year after the date that it last had performed work on the project⁶ and the action was, therefore, time barred under § 49-42. The court rejected the plaintiff's claim that, because the plaintiff had not brought an action pursuant to § 49-42 but, instead, had brought a common-law action on the bond, the time limitation in § 49-42 did not apply to the action. The court concluded that there is no common-law right to sue on a bond issued pursuant to § 49-41. With respect to the plaintiff's motion to dismiss the defendant's counterclaim, the trial court concluded that it need not decide the question of whether the counterclaim was time barred, as the plaintiff had claimed, because, in light of the court's dismissal of the plaintiff's complaint on timeliness grounds, the court would be unable to determine whether the complaint was "without substantial basis in fact or law." General Statutes (Rev. to 1995) § 49-42(a). Accordingly, the court concluded that the counterclaim was "in a state of procedural mootness" and dismissed the counterclaim on this alternate ground. This appeal followed. See footnote 3 of this opinion.

The plaintiff claims that the trial court⁷ improperly granted the defendant's motion to dismiss its complaint on the grounds that the complaint was time barred under § 49-42 because the plaintiff had not brought its action pursuant to that statute, but instead had brought a common-law action on the bond.⁸ We conclude that the trial court properly granted the motion to dismiss.

"The standard of review for a court's decision on a motion to dismiss is well settled. A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction.... [O]ur review of the court's ultimate legal conclusion and resulting [determination] of the motion to dismiss will be de novo." (Internal quotation marks omitted.) State v. Marsh & McLennan Cos., 286 Conn. 454, 463-64, 944 A.2d 315 (2008).

General Statutes (Rev. to 1995) § 49-42(b) provides in relevant part: "Every suit instituted under this section shall be brought in the name of the person suing but no such suit may be commenced after the expiration of one year after ... the date such materials were supplied or any work was performed." This court previously has concluded that "the General Assembly intended ... §§ 49-41 and 49-42 to operate in general conformity with the federal statute, popularly known as the Miller Act (40 U.S.C. §§ 270a-270e).... The provision of § 49-42 ... [that] sets forth the time limitation within which suit must be commenced under the statute, therefore, is not to be treated as an ordinary statute of limitation, but as a jurisdictional requirement establishing a condition precedent to maintaining an action under that section." (Citations omitted.) American Masons' Supply Co. v. F.W. Brown Co., 174 Conn. 219, 223-24, 384 A.2d 378 (1978).

It is well settled that, in an action brought pursuant to § 49-42, "the time fixed for bringing the action is a limitation on the liability itself, and not of the remedy alone." Id., at 224, 384 A.2d 378;⁹ see also Okee Industries, Inc. v. National Grange Mutual Ins. Co., 225 Conn. 367, 373, 623 A.2d 483 (1993) ("[w]e have relied on the rule of strict construction when the issue was whether the claimant's notice complied with the specific time requirements of [§ 49-42]"); Okee Industries, Inc. v. National Grange Mutual Ins. Co., supra, at 374, 623 A.2d 483 ("[t]he federal precedents, like our own, counsel liberal construction of statutory requirements other than those relating to specific time constraints" [emphasis added]). Because compliance with the limitations period set forth in § 49-42 is a jurisdictional requirement, "a timely suit is an absolute condition precedent to maintaining an action under that section.... This substantive requirement cannot be avoided by waiver or estoppel." (Citation omitted; internal quotation marks omitted.) Fisher Skylights, Inc. v. CFC Construction Ltd. Partnership, 79 F.3d 9, 12 (2d Cir.1996); see also Hayes v. Beresford, 184 Conn. 558, 562, 440 A.2d 224 (1981) ("[i]t is hornbook law that the parties cannot confer subject matter jurisdiction on a court by consent, waiver, silence or agreement").

This court also has held that, when a bond has been furnished pursuant to § 49-41 "as a condition precedent to the execution of the construction contract ... [t]he bond and the statute ... are to be construed together, and the language of the bond is to be interpreted in the light of the statute and with a view to effectuating the legislative intent manifested therein." (Internal quotation marks omitted.) American Masons' Supply Co. v. F.W. Brown Co., supra, 174 Conn. at 225, 384 A.2d 378; see also New Britain Lumber Co. v. American Surety Co., 113 Conn. 1, 5-6, 154 A. 147 (1931) ("Where a statutory bond is given, the provisions of the statute will be read into the bond.... If the law has made the instrument necessary, the parties are deemed to have had the law in...