Travelers Indemnity Company v. United States

• Decision Date: 28 June 1966
• Docket Number: No. 20357.,20357.
• Citation: 362 F.2d 896
• Parties: The TRAVELERS INDEMNITY COMPANY, a corporation, Appellant, v. UNITED STATES of America, for the Use and Benefit of WESTERN STEEL COMPANY, a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

362 F.2d 896 (1966)

The TRAVELERS INDEMNITY COMPANY, a corporation, Appellant, v. UNITED STATES of America, for the Use and Benefit of WESTERN STEEL COMPANY, a corporation, Appellee.

No. 20357.

United States Court of Appeals Ninth Circuit.

June 28, 1966.

Ralph C. Sipprell, Portland, Or., Richard Crake, of Hillyer, Crake & Irwin, San Diego, Cal., for appellant.

Macoy A. McMurray, McKay & Burton, Salt Lake City, Utah, Roger L. Meyer, of Sabin, Dafoe & Newcomb, Portland, Or., for appellee.

Before HAMLEY and JERTBERG, Circuit Judges, and THOMPSON, District Judge.

THOMPSON, District Judge:

In this Miller Act case (40 U.S.C. § 270a et seq.), the Claimant, Western Steel Company, recovered judgment on the payment bond written by The Travelers Indemnity Company as surety for the General Contractor, Jen-Mar Construction Company. The general contract required the construction of a radar tower at Condon Air Force Station, Oregon. Jen-Mar entered into two contracts with Empire Steel, the first dated May 23, 1962, calling for the furnishing of "all materials per Article One (1) for the following Sections of the Plans and Specifications * * * Section 3, Structural Steel Complete as required * * * Section 8, Miscellaneous Metals Complete as required * * * Section 17, Interior Enclosures and Partitions Complete as required," and other items. This contract was prepared on a Standard Contract Agreement form "Special Form for Materials Only" used by Associated General Contractors of Minnesota. Special requirements of this contract were (1) sums to become due Empire Steel there-under could not be assigned without Jen-Mar's consent; (2) materials to be delivered as required to coordinate with other work; (3) Empire Steel to furnish a performance and payment bond, unless this requirement be waived by Jen-Mar (as it later was); (4) the responsibility of preparing and submitting shop drawings and submittal data under the general plans and specifications was placed on Empire Steel; and (5) Empire Steel was to be paid ninety per cent (90%) of the value of materials delivered to the jobsite by the 15th day of the month — the final ten per cent (10%) to be paid "within thirty days after completion and acceptance by the Contracting Officer of all items involved." The contract involved approximately twenty-two per cent of the contract price for the entire project. Subsequently, under date of July 6, 1962, Jen-Mar and Empire Steel entered into a second contract, a Standard Sub-Contract, "Labor and Materials" on the Associated General Contractors of Minnesota printed form. This second contract called for the erection of the radar tower by Empire Steel.

On June 15, 1962, Western Steel Company contracted with Empire Steel to furnish structural steel, floor plating and miscellaneous items covered by the aforementioned agreements, and to deliver them F.O.B. trucks at Western Steel's yard. The steel so furnished and delivered had to be specifically fabricated, that is, cut, shaped, welded and punched to comply with the general plans and specications and the shop drawings furnished by Empire Steel.

Under the foregoing summarized facts, the District Court found that Empire Steel was a subcontractor of the General Contractor, Jen-Mar, and that Western Steel was a qualified Miller Act claimant as one having a direct contractual relationship with a subcontractor. 40 U.S.C. 270b; MacEvoy Co. v. United States for Use and Benefit of Calvin Tomkins Co., 1944, 322 U.S. 102, 64 S.Ct. 890, 88 L.Ed. 1163. Appellant surety company argues that the Empire Steel — Jen-Mar contract, which Western Steel undertook to perform, in part, was a contract solely for the supply of materials, that Empire Steel was not a subcontractor as to that contract, and that Western Steel, as a seller of materials to a material supplier to the General Contractor, was not a qualified Miller Act claimant.

The related facts do not require us to meet squarely the problem of who is a subcontractor under the Miller Act because Jen-Mar and Empire Steel entered into two contracts, as described, and it was an agreed fact in the Pre-Trial Order, followed in the findings of the trial court, that "Western Steel Company * * * agreed to furnish structural steel and floor plating covered by the aforementioned agreements." Emphasis added.

We are satisfied that under the totality of circumstances, as found by the trial court and established by the evidence, Empire Steel was a subcontractor of the General Contractor and Western Steel was a proper claimant against the General Contractor's bond. A subcontractor is "one who performs for and takes from the prime contractor a specific part of the labor or material requirements of the original...