U.S., Walton Technology v. Weststar Engineering
| Decision Date | 22 May 2002 |
| Docket Number | No. 99-35457.,No. 99-35311.,99-35311.,99-35457. |
| Citation | 290 F.3d 1199 |
| Parties | UNITED STATES FOR THE USE AND BENEFIT OF WALTON TECHNOLOGY, INC.; Walton Technology, Inc., an Illinois corporation, Plaintiffs-Appellants, v. WESTSTAR ENGINEERING, INC., a California corporation; Reliance Opinion Insurance Company, a California corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Alan B. Bornstein, Jameson Babbitt Stites & Lombard, P.L.L.C., Seattle, WA, for the plaintiffs-appellants.
Robert L. Zajac, Hillyer & Irwin, San Diego, CA, for the defendants-appellees.
Appeal from the United States District Court for the Western District of Washington, Franklin D. Burgess, District Judge, Presiding. D.C. No. CV-98-5180-FDB.
Before THOMPSON, TROTT, and PAEZ, Circuit Judges.
Opinion by Judge PAEZ; Partial Concurrence and Partial Dissent by Judge TROTT.
In this case, Plaintiff Walton Technology, Inc. ("Walton"), a subcontractor on a federal construction project, claims that the prime contractor, Defendant Weststar Engineering, Inc. ("Weststar"), failed to pay Walton rental fees for equipment it rented from Walton for use on the project. Walton filed suit against Weststar and its Miller Act surety, Defendant Reliance Insurance Company ("Reliance"), alleging three causes of action. With respect to Weststar, Walton claimed unjust enrichment and conversion based on its alleged entitlement to a pro rata share of Weststar's recovery from its insurance provider representing rental fees submitted by Weststar as part of a damage claim associated with the rental equipment. Walton also claimed that Reliance and its principal, Weststar, were liable on the Miller Act payment bond.
The district court granted summary judgment in favor of Weststar on the claims for unjust enrichment and conversion, concluding that Walton was not entitled to a share of Weststar's insurance proceeds under either theory. The district court also granted summary judgment in favor of Reliance and Weststar on Walton's Miller Act claim. Because Weststar had not been paid by the government so as to satisfy the subcontract clause providing that Weststar would only be obligated to pay Walton "when and if paid" by the government, the district court concluded that there were no "sums justly due" under the Miller Act. The district court awarded attorney's fees to both Defendants.
Walton appeals the district court's grant of summary judgment in favor of Weststar and Reliance, as well as the award of attorney's fees. We have jurisdiction under 28 U.S.C. § 1291 and affirm the district court's judgment in favor of Weststar on the unjust enrichment and conversion claims. However, we reverse the judgment in favor of Reliance and Weststar on the Miller Act claim. Allowing Defendants to avoid liability under the Miller Act based on the unsatisfied "pay when and if paid" clause in the subcontract between Walton and Weststar would prevent Walton from exercising its Miller Act rights in the absence of a "clear and explicit" waiver of those rights. Because we remand for further proceedings consistent with this opinion against both Defendants, we also vacate the district court's award of attorney's fees to Defendants as premature.
Weststar was the prime contractor on a federal project involving the repainting of the Navy Hammerhead Crane # 28 in Bremerton, Washington. In compliance with the Miller Act, 40 U.S.C. § 270a-d, Weststar obtained a payment bond from Reliance guaranteeing payment to all those supplying labor and materials to the project. Weststar subcontracted with Walton to rent a fabric and frame shroud called the "Sail System" to cover the crane as the work proceeded. The agreement between Weststar and Walton was set forth in Weststar Purchase Order 9601-40 and its Agreement Addendum dated March 18, 1996 ("Purchase Order Subcontract").
Although the rental period was originally scheduled to end in September 1996, various delays prevented Weststar from completing the project on schedule. By the end of October 1996, Walton claimed that Weststar was delinquent on rental fees and payments for other services in the amount of $108,000. On November 1, 1996, Walton filed suit in federal court alleging that Weststar had breached the Purchase Order Subcontract by failing to make timely payment. Shortly after, Weststar and Walton entered into settlement negotiations.
While the negotiations were pending, the Sail System was damaged in a series of incidents. In late November 1996, Navy personnel operating a "Hyster" forklift struck and damaged the Sail System. The next day, a severe windstorm caused further damage. One month later, the Sail System incurred even more damage when Bremerton was hit by high winds, heavy rain, and heavy snowfall. Weststar's corporate parent, Amelco, tendered notice of property damage claims to its insurer, St. Paul Fire & Marine Insurance Company ("St. Paul") in December 1996 and early January 1997.
On January 13, 1997, Walton and Weststar executed the Settlement & Agreement Modification to 9601-40, Hammerhead Crane Project (the "Settlement Agreement"). The Settlement Agreement provided for (1) continuation of the rental period for the Sail System under the Purchase Order Subcontract, (2) Weststar's continued use of the Sail System until completion of the project, and (3) the settlement of all existing disputes and lawsuits, including the breach of contract claim filed November 1, 1996. Under the Settlement Agreement, Weststar agreed to pay Walton the sum of $62,000 "in full settlement of all disputes and lawsuits between [Weststar and Walton] existing at the time of the execution of [the] agreement and in full payment of the monthly rental for the framing system through January 31, 1997." The Settlement Agreement also provided the terms under which Weststar would be obligated to make future payments to Walton. Future payment of rental fees would be subject to the following provision:
[I]t is expressly agreed that any further payment to Walton for the framing and fabric rental shall only be made when and if paid by the Navy and only to the extent paid by the Navy (i.e. Walton Technology will be paid its pro rata share of any recovery upon receipt by Weststar, based on the ratio between Weststar's overall claim amount and the recovered amount, as applied to Walton's claim). (emphasis added).
The parties affirmed their continuing rights and obligations under the Purchase Order Subcontract, except as modified by the Settlement Agreement. The parties also agreed that if any legal action, arbitration or other proceeding became necessary to enforce the terms of the Settlement Agreement, the prevailing party would be entitled to recover attorney's fees and costs incurred in such action or proceeding.
In March 1997, Weststar requested invoices from Walton covering the months of January through April of 1997. Walton prepared the invoices, all dated March 26, 1997, and submitted them together. Walton also sent an invoice for May 1997, dated June 16, 1997. Walton continued to furnish the Sail System for Weststar's use through the end of 1997.
Weststar included the invoices provided by Walton in its property damage claim to St. Paul. In August 1997, St. Paul and Weststar settled the property damage claims. St. Paul reimbursed Weststar in full for the sums Weststar claimed it owed Walton Technology for equipment rentals, materials, and technical support, plus overhead and profit markups. Weststar paid Walton for rental fees for January 1997, materials, and technical services. Although Weststar continued to use the Sail System until December 27, 1997, it made no further rental payments to Walton for the rental periods after January 1997. Weststar disassembled the Sail System and shipped it back to Walton on January 28 and February 6, 1998.
On April 3, 1998, Walton filed the instant action against Weststar and its Miller Act surety, Reliance. Walton claims unjust enrichment and conversion against Weststar based on Walton's alleged entitlement to a pro rata portion of Weststar's insurance recovery for rental fees included in the invoices prepared by Walton and submitted by Weststar as part of its property damage claim. Walton also claims that Reliance is liable on the Miller Act payment bond for unpaid rental fees through December 27, 1997. The parties filed cross motions for summary judgment. The district court granted Defendants' motion, denied Plaintiff's motion, and dismissed the action. The district court then granted Defendants' Motion for Attorney's Fees in the amount of $26,588.26. These timely appeals followed.
We review de novo a district court's summary judgment. Nodine v. Shiley Inc., 240 F.3d 1149, 1152 (9th Cir. 2001). "Our review is governed by the same standard used by the trial court under Federal Rule of Civil Procedure 56(c)." Adcock v. Chrysler Corp., 166 F.3d 1290, 1292 (9th Cir.1999). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Nodine, 240 F.3d at 1152.
Walton argues that it is entitled to recover a pro rata portion of Weststar's recovery on an insurance claim submitted to its insurer, St Paul, representing amounts included in Walton's rental invoices for the months of February through May 1997 that were submitted by Weststar as part of its claim. Walton maintains that it has satisfied the three elements of an unjust enrichment claim: a benefit conferred by Walton upon Weststar; an appreciation or knowledge by Weststar of the benefit; and the acceptance or retention by Weststar of the benefit...
To continue reading
Request your trial
-
United States ex rel. Chasney & Co. v. Hartford Accident & Indem. Co.
...shoes of its principal,” HPS Mech., Inc. , 2014 WL 3845176, at *13 (quoting United States ex rel. Walton Tech., Inc. v. Weststar Eng'g, Inc. , 290 F.3d 1199 (9th Cir.2002) (Trott, J., concurring and dissenting)), in general, the surety's liability on the payment bond is “defined by the liab......
-
United States v. Travelers Cas. & Sur. Co. of Am.
...of recovery or the right to recovery under the Miller Act would contradict the Miller Act. United States ex rel. Walton Technology v. Weststar Engineering, 290 F.3d 1199, 1207 (9th Cir.2002). However, no damages for delay clauses does not contradict the Miller Act because they affect the me......
-
United States ex rel. Pileco, Inc. v. Slurry Sys., Inc., Case No. 09 C 7459.
...available to the principal other than those that are purely personal, such as bankruptcy or infancy.” Walton Technology v. Weststar Engineering, Inc., 290 F.3d 1199, 1209 (9th Cir.2002) (citing 72 C.J.S. Principal and Surety § 189 at 318–19 (1987)). Thus, if SSI has standing to challenge Pi......
-
In re Motor Fuel Temperature Sales Practices Litig.
...Chevron retained the benefit under such circumstances as to make the retention inequitable. U.S. for Use & Benefit of Walton Tech., Inc. v. Westar Eng'g Inc., 290 F.3d 1199, 1204 (9th Cir. 2002). Plaintiffs allege that Chevron sold motor fuel to all class members in the same way, without di......
-
Chapter 12 - § 12.3 • PAYMENT BONDS
...v. Travelers Cas. & Sur. Co. of Am., 635 F. Supp. 2d 434, 437 (E.D. Va. 2009).[90] U.S. ex rel. Walton Tech. v. Weststar Eng'g, Inc., 290 F.3d 1199, 1209 (9th Cir. 2002); U.S. ex rel. Atlas Copco Compressors LLC v. RWT LLC, No. CV 16-00215 ACK-KJM, 2017 U.S. Dist. LEXIS 109035, at *15 (D. H......