United States v. Smith

• Decision Date: 19 November 1963
• Docket Number: No. 20216.,20216.
• Citation: 324 F.2d 622
• Parties: UNITED STATES of America, Appellant, v. Robert SMITH, d/b/a Smith Contracting Company, et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

324 F.2d 622 (1963)

UNITED STATES of America, Appellant, v. Robert SMITH, d/b/a Smith Contracting Company, et al., Appellees.

No. 20216.

United States Court of Appeals Fifth Circuit.

November 19, 1963.

Morton Hollander, Kathryn H. Baldwin, David L. Rose, Attys., Dept. of Justice, Washington, D. C., John W. Douglas, Asst. Atty. Gen., Donald H. Fraser, U. S. Atty., for appellant.

John C. Wylly, Ralph L. Crawford, John R. Calhohn, Charles L. Sparkmen, Savannah, Ga., for appellees.

Before TUTTLE, Chief Judge, and JONES and BELL, Circuit Judges.

TUTTLE, Chief Judge.

The United States appeals from a judgment of the trial court holding it liable under the Federal Tort Claims Act, 28 U.S.C.A. § 1346(b), to six subcontractors who performed work for a Government prime contractor on the ground that he had failed to require a payment bond from the contractor under the Miller Act, 40 U.S.C.A. § 270a, before execution of the prime contract.

The facts are not in dispute. Government contracting officers let contracts with the Tropical Pool and Construction Co., Inc. to build two swimming pools at Hunter Air Force Base in Georgia. Tropical obtained materials and services from the appellees as subcontractors and failed to pay the amounts here sued for. It turned out that the contracting officers had failed to require Tropical to provide the payment bond which is required by the Miller Act in the following language:

"Before any contract, exceeding $2,000 in amount, for the construction, alteration, or repair of any public building or public work of the United States is awarded to any person, such person shall furnish to the United States the following bonds, which shall become binding upon the award of the contract to such person * * *."

The absence of such payment bond made it impossible for the appellees to collect for the materials and labor furnished by them on the job. Tropical had in the meantime become insolvent. Appellees filed this suit on the theory that such failure on the part of the contracting officers amounted to negligence which would support a suit by them against the United States under the Tort Claims Act. The language of this Act relied on by appellees is as follows:

"The district courts * * * shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." 28 U.S.C.A. § 1346.

The trial court held, "the contracting officers for the Government were required by law to obtain payment bonds before the contracts were awarded for the purpose of protecting persons furnishing labor, supplies and materials to the prime contractor and that in failing to obtain such payment bonds violated the Miller Act." Looking to the Georgia prima facie Tort Statute § 105-103, 1933 Code of Georgia, which gives a cause of action for damages for breach of a legal duty, the court held that "when the contracting officers failed to require the posting of the payment bonds, as provided for under the Miller Act, then the United States subjected itself to a claim in tort under the Federal Tort Claims Act, which by reference incorporated therein the Georgia statute having to do with the breach of legal duty giving rise to a cause of action in favor of the plaintiffs."

The appeal of the United States is based on three general grounds: (1) The United States owed no duty to appellees under the Miller Act to obtain the payment bond; (2) Appellees have no cause of action within the coverage of the Federal Tort Claims Act; (3) The Georgia law does not give recovery in tort in the circumstances of this case.

In support of its first ground, the Government points to the language of the statute itself and stresses the fact that the only obligation created there is an obligation placed on the contractor to furnish the bond, pointing likewise to the fact that the statute is silent as to any obligation expressly placing a duty on the contracting officers. The Government argues from this that its agents violated no duty imposed by statute by reason of the failure of the contractor to carry out his statutory obligations. Furthermore, it is the argument of the United States that even if the contracting officers were at fault in not requiring the posting of the bond, the language of the statute did not create a duty owed to the laborers and materialmen, but created a duty only to the United States.

The burden of the Government's argument here is that this was merely a "housekeeping" statute, passed for the protection of the Government in its contracting for Government construction work which, to be sure, greatly benefited laborers and materialmen but which could not be...