State Bd. for Contractors v. H.B. Sedwick, Jr., Bldg. Supply Co., Inc., 841314
Decision Date | 04 September 1987 |
Docket Number | No. 841314,841314 |
Citation | 360 S.E.2d 169,234 Va. 79 |
Parties | STATE BOARD FOR CONTRACTORS v. H.B. SEDWICK, JR., BUILDING SUPPLY COMPANY, INC. Record |
Court | Virginia Supreme Court |
Richard C. Kast, Asst. Atty. Gen. (Gerald L. Baliles, Atty. Gen., on brief), for appellant.
Charles W. Bowman, Christopher J. Honenberger (Shackelford & Honenberger, Orange, on brief), for appellee.
Present: All the Justices.
In this appeal, we decide whether a materialman may recover under the Virginia Contractor Transaction Recovery Act, Code §§ 54-145.3 through -145.3:9 (the Act).
H.B. Sedwick, Jr., Building Supply Company, Inc. (Sedwick), obtained a judgment in the principal amount of $14,297.62 against Thomas Arrington, Jr., a Virginia Class B contractor licensed pursuant to Code § 54-129.3. Because Arrington had been adjudicated a bankrupt, Sedwick was unable to collect the judgment. Consequently, Sedwick filed a claim in the trial court against the State Board for Contractors (the Board) pursuant to the Act. The Act, which establishes the Contractors Transaction Recovery Fund (the Fund), provides a procedure for reimbursement of claimants injured by a contractor's improper or dishonest conduct. The Fund is under the control of the Board and consists of monies paid by licensed contractors pursuant to periodic assessments.
The Board opposed Sedwick's claim on the ground that Sedwick was a vendor of Arrington, the judgment debtor, and therefore excluded from recovery under the Act. The trial court ruled that Sedwick was not a vendor of the judgment debtor and awarded recovery to Sedwick in the amount of $10,000, the maximum amount recoverable under the Act. The Board appeals.
The dispositive issue in this appeal is whether Sedwick is a "vendor of [a] judgment debtor" within the meaning of Code § 54-145.3:3, and therefore excluded from receiving an award under the Act. At the time Sedwick filed its claim, Code § 54-145.3:3 1 provided in pertinent part as follows:
Whenever any person is awarded a final judgment in a court of competent jurisdiction in the Commonwealth of Virginia against any [legal entity licensed by the State Board for Contractors] for improper or dishonest conduct and such conduct ... occurred in connection with a transaction involving contracting as defined in § 54-113, the judgment creditor may file a verified claim in the court awarding the judgment. After thirty days' written notice by the court to the Director [of the Department of Commerce], such person may apply to the court for an order directing payment from the fund of the amount unpaid upon the judgment, subject to the following conditions:
....
2. Such judgment creditor shall not be an employee of such judgment debtor nor vender of such judgment debtor, or another licensee nor the spouse or child of such judgment debtor nor the employee of such spouse or child.
The facts are undisputed. Sedwick is a building material supplier. Arrington, a licensed contractor, was engaged in the residential construction business. From approximately June 1, 1981, to December 31, 1982, Sedwick supplied Arrington with building materials that Arrington used in four residential construction projects.
Arrington purchased these materials on credit extended by Sedwick on an open account. Relying upon Arrington's representations, Sedwick expected reimbursement from the proceeds Arrington would receive from the sale of the residences.
Arrington, however, failed to pay Sedwick and, instead, used the sale proceeds to pay other debts in apparent violation of Code § 43-13. 2 Based upon Arrington's failure to pay, Sedwick secured a judgment against Arrington in the amount of $14,297.62. Because Arrington had no assets with which to satisfy the judgment, Sedwick filed its claim pursuant to the Act.
The Board contends that Sedwick is excluded from coverage under the Act because Sedwick is a vendor of Arrington, the judgment debtor. Sedwick contends, however, that the exclusion applies only to salesmen working for contractors, not to sellers of building materials to contractors. Sedwick argues that salesmen are vendors of contractors while material suppliers are vendors to contractors. Presumably, the trial court adopted Sedwick's argument, concluding that although Sedwick was a vendor of building supplies, it was not a vendor of the judgment debtor, but rather a vendor to the judgment debtor.
Code § 54-145.3:3 provides redress for those of the public injured by a dishonest or irresponsible contractor in a transaction involving contracting. Code § 54-145.3:3(2), however, excludes from recovery all claims, regardless of the merits, made by employees of the judgment debtor, by other licensees, by the spouse or...
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