Travis Equipment Co. v. D & L Construction Co. & Associates
| Decision Date | 21 November 1963 |
| Docket Number | No. 1897,1807,1898,1814,1968,1974.,1887,1900,1897 |
| Citation | 224 F. Supp. 410 |
| Parties | TRAVIS EQUIPMENT COMPANY, Inc., Plaintiff, v. D & L CONSTRUCTION CO. & ASSOCIATES and Continental Casualty Company, Defendants. W. S. CONNER, d/b/a W. S. Conner Construction Company, Plaintiff, v. D & L CONSTRUCTION CO. & ASSOCIATES and Continental Casualty Company, Defendants. UNITED STATES of America, for the Use and Benefit of MISSOURI-ILLINOIS TRACTOR & EQUIPMENT CO., Inc., Plaintiff, v. D & L CONSTRUCTION CO. & ASSOCIATES and Continental Casualty Company, Defendants. UNITED STATES of America, for the Use and Benefit of ACME IRON WORKS, COMPANY, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant. GENERAL ELECTRIC COMPANY, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant. KOPPERS COMPANY, Inc., Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant (two cases). WILLIAM J. ZICKEL COMPANY, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — Western District of Missouri |
Claude T. Wood, Richland, Mo., and Owen & Purser, Austin, Tex., for Travis Equipment Co., Inc. and W. S. Conner d/b/a W. S. Conner Const. Co.
Rafter, Biersmith & Miller, Kansas City, Mo., for D & L Const. Co. & Associates.
Lewis, Rice, Tucker, Allen & Chubb, St. Louis, Mo., and Lincoln, Haseltine, Keet, Forehand & Springer, Springfield, Mo., for United States for use and benefit of Missouri-Illinois Tractor & Equipment Co., Inc.
Miller, Fairman, Sanford, Carr & Lowther, Springfield, Mo., for United States for use and benefit of Acme Iron Works, Co.
Blackmer, Swanson, Midgley, Jones & Eager, Kansas City, Mo., for General Elec. Co. and Koppers Co., Inc.
Rafter, Biersmith & Miller, and Watson, Ess, Marshall & Enggas, Kansas City, Mo., for Continental Cas. Co.
Rooney, Webbe & Davidson, St. Louis, Mo., for William J. Zickel Co.
In our principal memorandum filed in this group of cases (reported as United States for Use and Benefit of Fine v. Travelers Indemnity Co., W.D.Mo.1963, 215 F.Supp. 455) we reserved any ruling on the limitations question. Following further pre-trial conferences, various motions and supporting briefs were filed relating to that question which we now rule.
In Case No. 1900, which we use as an example, plaintiff stated (page 10 of plaintiff's suggestions in opposition to defendant's motion for summary judgment) that factually "this suit was filed more than one year after the last of plaintiff's items were furnished, but within one year following the date upon which D & L Construction Company & Associates ceased to work on the project (Stipulation and Statement of Case, paragraph 19)". "Thus," plaintiff candidly continued, "if this Court holds that the limitation provisions of the Miller Act govern these actions, plaintiff has failed to institute suit within the time required". Plaintiff's statement of the legal question is a correct one.
The provisions of the bond and the provisions of the statute are in obvious conflict. The bond involved was executed August 18, 1959. Paragraph 4(b) of that bond provided:
Section 270b of Title 40, United States Code, as amended but shortly before the execution of the bond in its pertinent part provided that:
For reasons unexplained and unknown, it is apparent that the terms inserted in the so-called Capehart bonds followed the language of the Miller Act to the extent of providing that no suit "shall be commenced after the expiration of one year", but that language changed the day from which the year was to be measured from "the day on which the last of the labor was performed or material was supplied by the person who has furnished labor or material", as provided by the Miller Act, to "the date on which Principal ceases work on the contract".
There can be no doubt but that if the Congress intended that the limitation stated in the Miller Act was to be considered applicable to bonds issued on Capehart projects that the provision inserted in the bond is most inconsistent with the declared Congressional intent. Senate Report No. 551 of the 86th Congress, 1st Session, 1959 (U.S.Code Congressional and Administrative News, 86th Cong. 1st Sess. page 1995) attached and incorporated a letter of February 24, 1959 of the Comptroller General of the United States in support of its recommendation of the 1959 amendment to the Miller Act. That letter set forth the complications that had resulted from the use of the "final settlement" language that had been incorporated into the Miller Act from the earlier Heard Act. It also pointed out the administrative burdens and practical uncertainties that resulted from the former requirement of the Miller Act which required the Comptroller General to conclusively fix the date of "final settlement".
More important, so far as substantive rights are concerned, the 1959 amendment to the Miller Act also changed the former Congressional policy that the one year period of limited right within which a suit could be instituted should run from a single date to a new policy which provided that each person who furnished labor and material would have a period of one year from the day on which he last performed labor or supplied material. In fact, the Comptroller General's letter pointed out that the single date was being rejected because
The 1959 amendment to the Miller Act was designed to insure that claimants performing work first on a lengthy construction contract would be required to file their suits within one year after the day on which their last labor was performed or material was supplied. Only by the adoption of a multiple system of limitation periods would he who performed first have the same period within which to bring suit as he who performed last. But more important, the Congress determined that all claimants were to have only one year within which to bring their respective suits.
If the pattern of multiple periods is not for any reason applied and followed, and if the rejected single date pattern is applied and followed so that the one year period is said to commence to run only after the prime contractor has ceased work on the project, then it is perfectly obvious that a particular plaintiff who last performed labor or who last supplied material two years before his prime contractor ceases to work on a lengthy contract would somehow be given a two year period within which to bring his suit rather than the one year period, as expressly intended in the 1959 amendment to the Miller Act.
And in our determination of Congressional intent, we must also take into account that one of the "beneficial results" that Congress intended would result from the proposed amendment was, as the Comptroller General's letter pointed out, that "the supplier would know simply by consulting his records the precise time when the 1-year limitation began to run and (by adding 1 year) when his right to sue would expire". That Congressional intention must be disregarded if effect is given to the terms of the bond.
Should we hold the terms of the bond to be controllingly applicable, we would in practical effect hold the bonding company liable for particular claims that it would not have been liable for had the provisions of the bond followed the command of the 1959 amendment of the Miller Act.
In our principal memorandum we noted that we felt bound, not only by the precise holding of Continental Casualty Co. v. United States for Use and Benefit of Robertson Lumber Co., 8th Cir. 1962, 305 F.2d 794, cert. denied 371 U.S. 922, 83 S.Ct. 290, 9 L.Ed.2d 231, but that "we must also fairly, and without technical nicety, accept and apply its basic rationale to the cases now pending before us". (l. c. 460 of 215 F.Supp.)
We also there stated our considered view that "Robertson Lumber did not hold, nor does any application of its rationale require, that we approve all provisions that the Secretary of Defense may have seen fit, in the exercise of his assumed power, to write into bonds required by law". (l. c. 462 of 215 F.Supp.)
It is apparent from page 474 of 215 F.Supp. of our principal memorandum that we, unlike the Court of Appeals in Robertson Lumber, were required to reach the question of "whether the liability of the bonding companies involved in these cases can be said to be fixed by `the terms of the bond as written' (p. 799 of 305 F.2d)". In ruling the questions relating to the extent of bond coverage we held that we would follow neither Robertson Lumber nor the expressed intention of the Congress "if we should attempt to construe the words in the bonds involved in this case as providing for a different substantive bond liability than that established by the Miller Act." (p. 474 of 215 F.Supp.) We also held that we could not believe that "the Congress, by a single clause in a single sentence, intended to change the well established law that the provisions...
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