United States v. Federal Insurance Company

Decision Date14 December 1971
Docket NumberNo. 71-2291 Summary Calendar.,71-2291 Summary Calendar.
Citation452 F.2d 485
PartiesUNITED STATES for the Use and Benefit of JINKS LUMBER COMPANY, Inc., Plaintiff-Appellant, v. FEDERAL INSURANCE COMPANY et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Jerry W. Gerde, Davenport, Johnston & Harris, Panama City, Fla., for plaintiff-appellant.

Gary B. Lane, Beggs, Lane, Daniel, Gaines & Davis, Pensacola, Fla., for Dyson & Fed. Ins. Co.

Robert B. Staats, Panama City, Fla., trustee.

Clinton Foster, Panama City, Fla., for Charles Register.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

PER CURIAM:

Appellant, Jinks Lumber Company, appeals from the granting of a motion for summary judgment in favor of appellee, Dyson & Company, and its surety, Federal Insurance Company, alleging that the district court was in error when it concluded that Jinks had failed to comply with the notice requirements of the Miller Act, 40 U.S.C.A. § 270b, in pressing a materialman's claim against Dyson's payment bond. We find that Jinks did give adequate notice under the statute, and reverse the decision of the district court.

Dyson, a general contractor, held the primary construction contract for a number of housing units on an Air Force Base in Florida. Dyson subcontracted the wallboard and painting requirements to Charles Register, with materials to be purchased from Jinks. Under the terms of the primary contract, Dyson furnished the usual bond to all materialmen, with the Federal Insurance Company as surety, 40 U.S.C.A. § 270a. Dyson eventually terminated its subcontract with Register, but only after Register had allegedly fallen $20,640.76 behind in his payments to Jinks for materials furnished.

The sole issue of this case narrows to a rather thin question of law: Did Dyson receive adequate notice under the Miller Act that Jinks intended to press a materialman's claim directly against Dyson? To answer this question we must examine three letters that passed between attorneys for Dyson and Jinks. On 19 December 1969, Jinks' attorneys wrote to Dyson's attorneys, expressing Jinks' "understanding that your Dyson's bond would probably make your Dyson's company liable as a surety for Mr. Register," but also requesting that Dyson "recommend to us Jinks some method of obtaining payment on this matter from Mr. Register himself." That letter also contained a carbon of a letter from Jinks' attorneys to Register, stating the precise amount allegedly due to Jinks and requesting that Register contact the attorneys. On 24 December 1969, Dyson's attorneys mailed a letter to several parties who had expressed concern regarding Register's performance to that date, advising each addressee that Dyson would make no further payments to Register. Among the addressees of that letter was Jinks, to whom the following paragraph applies:

"Our client has received . . . communication from Mssrs. Davenport, Johnston & Harris attorneys for Jinks asserting a claim for materials furnished to Register by Jinks Lumber Company." Emphasis added

Dyson's attorneys concluded the 24 December letter by advising the addressees that, following completion of the primary contract, they would

". . . endeavor to set up a conference in the vicinity of Panama City, at which a genuine effort will be made to resolve by agreement all claims asserted."

There was no further relevant communication between the attorneys until 20 January 1971, when Jinks' attorneys sent to Dyson's attorneys a letter in which the following sentence appears:

"In accordance with the requirements of the United States Code, this is to provide you with written notice within ninety days from the date on which our client, Jinks Lumber Company, Inc., supplied the last delivery of materials to Charles `Chuck\' Register for use on the construction job at Tyndall Air Force Base."

The Miller Act requires that a materialman lodge a claim of some specificity regarding the subcontractor and the amount due directly against the general contractor within 90 days of the materialman's last delivery of materials to the subcontractor. 40 U.S.C.A. § 270b. The letter of 20 January arrived after that 90-day period, while the letter and carbon of 19 December arrived well within it. Unless the letter of 19 December provided adequate notice, Jinks is barred from asserting a claim against Dyson. United States for Use and Benefit of Harris Paint Co. v. Seaboard Surety Co., 5 Cir. 1971, 437 F.2d 37. The district court granted summary judgment solely on the ground that the letter of 19 December was not adequate notice. F.R.Civ.Proc. 56(b), but we disagree.

The purpose of the notice requirement of the Miller Act is to alert a general contractor that payment will be expected directly from him, rather than from the subcontractor with whom the materialman dealt directly. Without a statutory period, materialmen might delay claims unreasonably, thus frustrating the general contractor's need to be able to commit his funds to other activities. See Bowden v. United States for Use...

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    ...Co., 457 F.2d 116, 117 (7th Cir.1972) (verbal communication augmenting deficient written notice); United States ex rel. Jinks Lumber Co. v. Federal Ins. Co., 452 F.2d 485, 488 (5th Cir.1971) (joint construction curing two incomplete letters); Liles Construction Co. v. United States ex rel. ......
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