United States v. Somers Construction Co.
| Decision Date | 03 May 1960 |
| Docket Number | Civ. A. No. 2086. |
| Citation | 184 F. Supp. 563 |
| Parties | UNITED STATES of America for the use of Morton ROSS, Hyman Gold, and Abe Rudnitsky, trading as Araco Co., and Araco Co., a corporation of the State of New Jersey, Plaintiffs, v. SOMERS CONSTRUCTION CO., Inc., a corporation of the State of Pennsylvania, and Reliance Insurance Company, a corporation of the State of Pennsylvania, Defendants. |
| Court | U.S. District Court — District of Delaware |
William Duffy, Jr., Herrmann & Duffy, Wilmington, Del., for plaintiffs.
Howard L. Williams, and Henry N. Herndon, Jr., Morris, James, Hitchens & Williams, Wilmington, Del., for defendants.
On June 28, 1956 the United States and defendant Somers Construction Co., Inc., (hereinafter referred to as Somers) entered into a written contract whereby Somers agreed to construct ammunition storage facilities at the Dover Air Force Base, Dover, Delaware.
On the same day, Somers, as principal, and defendant Reliance Insurance Co., formerly known as Fire Association of Philadelphia as surety, gave a standard Government form of payment bond to the United States conditioned on the prompt payment of all persons supplying labor and material in the prosecution of the work provided for in the Government contract. This bond was in accordance with the requirements of the Miller Act, 40 U.S.C.A. § 270a.
On July 10, 1956 Somers entered into a subcontract with plaintiff Araco Company (hereinafter referred to as Araco) whereby Araco was to provide all plumbing, heating, ventilation, air conditioning and certain other work required to be done by Somers as part of its contract with the Government. This work was to be done "for the sum of $270,000.00."
After said subcontract was made, various additions to the work were ordered by Somers and performed by Araco to the extent of an additional $10,448.85, which, added to the $270,000.00, equalled the total of $280,448.85. Certain payments were made by Somers which reduced the total owed Araco to $93,251.23. These figures are taken from the complaint.
While the record is not entirely clear it is implicit from the language of the complaint and from the contentions of both parties that the Government at some period during the existence of its contract and pursuant to that contract issued a change order eliminating the work that Somers was to do under the original contract and Araco was to do under its subcontract with reference to ammunition magazine No. 2, being one of the magazines covered by the contract. The terminating provision of the contract as shown in the defendants' brief is set out in the footnote.1
As a consequence of the terminating order of the Government and the reduction of the amount of work to be done by the contractor the Government reduced its contractual obligation to Somers by $52,355.58.
On March 13, 1959 Araco filed a Miller Act suit against Somers and its surety, Reliance, to recover the balance of moneys owed for labor and material furnished to a public construction project. Araco contends that since all the work eliminated by the United States was to have been performed by Araco, then Somers' obligation to Araco was reduced by the amount of the Government reduction. In short, Araco claims that Somers owes Araco $40,895.65. This amount is arrived at by deducting from the balance due if all the work had been done ($93,251.23) the amount of the allowance made to Somers by the Government ($52,355.58).
On April 23, 1959 defendants moved to dismiss the action because the Court had no jurisdiction over the subject matter, the action being between citizens of the same state, and presenting for determination no question under the Miller Act since Araco's action was not for labor and materials. Alternatively, defendants asked for a stay of proceedings pending arbitration between the parties pursuant to the United States Arbitration Act, 9 U.S.C. § 3 and, as contended, pursuant to the provisions of the subcontract.
It is first contended that the complaint must be dismissed because the Court has no jurisdiction. This is not a diversity case and there is no diversity of citizenship. Jurisdiction is solely alleged as conferred by the Miller Act2 as to which no diversity is required.
The record is not clear at what time the Government eliminated the work on magazine No. 2 which Somers was to do under its contract and Araco was to do under its subcontract. The plaintiff seeks to recover because, as it contends, its subcontract was for one unit sum for all the work contemplated by the subcontract. The only statement of the plaintiff as to the time the Government eliminated the work proposed on magazine No. 2 appears in an affidavit that "many months after the work was begun the Government eliminated heating and air conditioning from one of the magazine buildings." The defendant contends that the contract for heating and air conditioning the two magazines was based upon $195,000.00 and as one magazine was eliminated it seeks to reduce the claim of the plaintiff by one-half or $97,500.00. It is thus implicit that the Government eliminated the work on magazine No. 2 before Araco started work on that magazine or furnished materials therefor.
Upon assumption of the above facts I must consider the application of the Miller Act. It will be borne in mind that I am not now considering any general contractual indebtedness of the defendants to the plaintiffs.3 I am solely considering the application of the Miller Act and the liability of the bond furnished pursuant to that Act.
The Miller Act was passed for the purpose of securing payment to persons who furnished labor or materials entering into Government buildings or installations. The security provided by that Act is strongly analogous to that security obtainable by such persons as to privately owned buildings by mechanics' lien proceedings or other appropriate measures. As in mechanics' lien proceedings it is essential that the labor should have been performed or the materials furnished in connection with the particular structure involved.4
The Miller Act will be liberally construed in order to accomplish the purposes of the Act5 but the purview or intent of the Statute may not be unduly enlarged by the Court.6
The payment bond given pursuant to the Miller Act is solely conditioned to secure the prompt payment "to all persons supplying labor and materials in the prosecution of the work provided for in said contract."
A right of action on the bond is given by Sec. 270b of the Statute to "every person who has furnished labor or material" in the prosecution of the work and who has not been paid in full therefor. It is impossible for me to ascertain from the facts presented in this case what labor has been performed or material furnished for which payment has not been made. It is rather an ascertainment of a credit due for work not done and for materials not furnished owing to the Government's revision of the contract and elimination of magazine No. 2.
The right of action given under the Miller Act is a direct action on the bond for which the surety is liable but such claim is solely based upon the performance of labor or furnishing of material. The present claim as against the surety does not seem to flow from that source.
I am of the opinion that the present complaint must be dismissed as showing no claim upon which relief may be granted under the Miller Act. This conclusion is, I think, supported by United States for Use of Gibson v. Harman, 4 Cir., 192 F.2d 999 and L. P. Friestedt Co. v. United States Fireproofing Co., 10 Cir., 125 F.2d 1010, which hold that performance of work or furnishing of materials are essential to a recovery under the Miller Act.
The purpose and scope of the Miller Act is further evidenced by the recent amendment of August 4, 1959,7 not applicable to the present litigation. This amendment withdrew the "date of final settlement" as the date upon which the institution of suit should be based and substituted the "day on which the last of the labor was performed or material was supplied by him". Where no labor has been performed or material furnished, there could be no date from which the limitation would start to run. There being in this case no statement of any labor that had been performed or materials furnished for which payment had not been made, and no mention of any expense incurred or materials obtained for subsequent inclusion in the work deleted, the complaint must be dismissed when...
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...378 F. 2d 294 (5th Cir. 1967), cert. denied 389 U.S. 1004, 88 S.Ct. 561, 19 L.Ed.2d 598 (1967); United States for Use of Ross v. Somers Construction Co., 184 F.Supp. 563 (D.Del. 1960); 84 A.L.R.2d 1072 (annotation in reference to recovery on quantum meruit where only express contract is ple......
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...failure to satisfy Rule 8(a).") (citing Davis v. Piper Aircraft Corp., 615 F.2d 606, 611 n. 8 (4th Cir.1980); United States v. Somers Constr. Co., 184 F.Supp. 563, 567 (D.Del.1960); Independent Productions Corp. v. Loew's, Inc., 22 F.R.D. 266 8. The First Amended Complaint made no changes t......
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