United States v. Greene Electrical Serv. of Long Island, Inc.

• Decision Date: 21 June 1967
• Docket Number: No. 74,Docket 30477.,74
• Citation: 379 F.2d 207
• Court: U.S. Court of Appeals — Second Circuit
• Parties: The UNITED STATES of America for the Use and Benefit of LINCOLN ELECTRIC PRODUCTS CO., Inc., Plaintiff-Appellee, v. GREENE ELECTRICAL SERVICE OF LONG ISLAND, INC., Defendant, and R. P. McTeague Construction Corp., and Fidelity & Deposit Company of Maryland, Defendants-Appellants.

379 F.2d 207 (1967)

The UNITED STATES of America for the Use and Benefit of LINCOLN ELECTRIC PRODUCTS CO., Inc., Plaintiff-Appellee, v. GREENE ELECTRICAL SERVICE OF LONG ISLAND, INC., Defendant, and R. P. McTeague Construction Corp., and Fidelity & Deposit Company of Maryland, Defendants-Appellants.

No. 74, Docket 30477.

United States Court of Appeals Second Circuit.

Argued October 21, 1966.

Decided June 21, 1967.

Daniel W. Tractenberg, New York City, for plaintiff-appellee.

Edward Cherney, New York City, Murray Pudalov, Paltrow & Pudalov, Massapequa Park, N.Y., for defendants-appellants.

Before WATERMAN, HAYS and ANDERSON, Circuit Judges.

WATERMAN, Circuit Judge:

This is an appeal by the prime contractor and its surety from a judgment of the United States District Court for the Eastern District of New York, awarding the use-plaintiff $10,500 plus interest on a claim under the Miller Act, 40 U.S.C. § 270a-270d. The lower court's opinion is reported at 252 F.Supp. 324 (E.D.N.Y. 1966).

R. P. McTeague Construction Corp. (McTeague) entered into a contract with the United States for the construction of an automotive maintenance shop at Westhampton Air Force Base, Long Island. As required by 40 U.S.C. § 270a McTeague furnished a payment bond issued by Fidelity & Deposit Company of Maryland (Fidelity) for the benefit of persons supplying labor, services, and materials in the performance of the contract. Greene Electrical Service of Long Island, Inc. (Greene) was an electrical subcontractor for McTeague. Lincoln Electric Products, Inc. (Lincoln) is an electrical supplier who furnished certain materials and equipment to Greene to be used by Greene in performing its contract with McTeague.

By a purchase order dated April 29, 1964 Lincoln and Greene contracted with each other for the delivery of this material and equipment for an agreed price of $10,500. Deliveries were made during the latter part of 1964 of all the separate items so contracted for. The date of the last delivery was disputed for there was testimony to the effect that all deliveries were completed by late November though the date of the last bill of lading was December 23, 1964. Greene never paid Lincoln for the items delivered under this contract. One check was given to Lincoln by Greene but was dishonored. Lincoln continued deliveries despite the dishonor of the check and the absence of any other payment by Greene, and while making these deliveries did not notify McTeague that it was not receiving any payments from Greene. During this same period while Greene was not paying Lincoln, Greene was receiving its progress payments from the principal contractor McTeague. These payments substantially exceeded the value of the Greene-Lincoln contract and, as it developed, even exceeded the value of the work that Greene, which never completed its contract, performed on the project. Greene, though receiving its money, went out of business before the project was completed without paying Lincoln, and evidence was also in the case that Greene owed Lincoln upon other contracts in addition to the Miller Act one here at issue.

Lincoln mailed McTeague the statutorily required notice of non-payment on March 23, 1965 within ninety days after December 23, 1964. McTeague claimed that it was unaware before receiving this notice that Lincoln had furnished materials to Greene. McTeague had executed an order for materials in which Lincoln's name had appeared, but Lincoln, as we have above stated, made no attempt prior to its delivery of the statutory notice to inform McTeague of Greene's failure to pay it anything on the contract.

This action was commenced by Lincoln against appellants under 40 U.S.C. § 270b, plaintiff joining Greene for breach of contract. The trial court, sitting without a jury, rendered judgment for Lincoln against Greene, McTeague, and Fidelity. McTeague and Fidelity appeal, claiming that several errors were committed by the court below.

Appellants claim the trial court erred in finding as a fact that the last delivery was made on December 23, 1964, which finding made Lincoln's March 23, 1965 notice to McTeague timely under the statute. The finding is supported by the documentary evidence of a dated bill of lading and, as it is also based to some extent on the trial court's estimate of the credibility of the witnesses before it, we cannot say that it was clearly erroneous. Fed.R.Civ.P. 52(a).

Appellants in their brief imply that there might have been collusion between Greene and Lincoln because of the debts which Greene owed Lincoln on transactions apart from those that arose under this contract. Appellants advance this surmise on the thought that if McTeague had been aware that Lincoln was not being paid by its subcontractor Greene, it, as the prime contractor, would have made the payments directly to Lincoln and charged them against the sums due from it to Greene; but by not informing McTeague of Greene's current indebtedness Lincoln might be able to persuade Greene to use the funds received from McTeague to pay its other debts to Lincoln, leaving unpaid the indebtedness incurred on the McTeague project, indebtedness which would be collectible by Lincoln from the appellants on McTeague's payment bond....