United States v. Southern Construction Company

• Decision Date: 31 December 1964
• Docket Number: Civ. A. No. 8186.
• Citation: 236 F. Supp. 742
• Parties: The UNITED STATES of America for the use and benefit of GENERAL ELECTRIC COMPANY v. SOUTHERN CONSTRUCTION COMPANY, Inc., Continental Casualty Company, Mojave Electric Company, Inc., Irving Sulmeyer, Trustee in Bankruptcy for Mojave Electric Co., Inc., National Union Indemnity Insurance Company.
• Court: U.S. District Court — Western District of Louisiana

236 F. Supp. 742

The UNITED STATES of America for the use and benefit of GENERAL ELECTRIC COMPANY v. SOUTHERN CONSTRUCTION COMPANY, Inc., Continental Casualty Company, Mojave Electric Company, Inc., Irving Sulmeyer, Trustee in Bankruptcy for Mojave Electric Co., Inc., National Union Indemnity Insurance Company.

Civ. A. No. 8186.

United States District Court W. D. Louisiana, Shreveport Division.

December 31, 1964.

Michael H. Bagot, New Orleans, La., Jesse S. Guillot, New Orleans, La., for plaintiff.

A. Morgan Brian, Jr., Deutsch, Kerrigan & Stiles, New Orleans, La., for defendants.

BEN C. DAWKINS, Jr., Chief Judge.

This action is brought for the use and benefit of plaintiff, General Electric Company (GE), a furnisher of materials used in the construction of the Barksdale Air Force Base Defense Area's Nike-Hercules Facilities at Bellevue, Louisiana.

Defendant, Southern Construction Company (Southern), entered into a contract with the federal government's Corps of Engineers to construct the proposed facilities and posted the performance and payment bonds required by the Miller Act, 40 U.S.C.A. § 270a et seq., with Continental Casualty Company (Continental) as surety. Southern then subcontracted with Mojave Electric Company (Mojave) for performance of the electrical work on the project. During the course of the work on the project Mojave bought materials on open account from GE, and these materials were shipped to the site of the work by GE.

Mojave performed its work under the subcontract and received materials from GE until March 1960, when it defaulted and abandoned the subcontract work, leaving its account with GE unpaid. The last materials shipped by GE to Mojave, identified by invoice #5010, were ordered by Mojave October 22, 1959. Although the materials in invoice #5010 were shipped by the specialty manufacturer March 8, 1960, the invoice from GE for this item was dated March 14, 1960, and part of the material in this item was received at the jobsite March 21, 1960. The remainder was received at the jobsite March 30. None of the other materials furnished by GE to Mojave were received on the jobsite after March 13, 1960. GE sent by registered mail March 15, 1960, a "notice of claim" and an itemized statement of the Mojave account, including invoice #5010, in the amount of $11,369.39.¹

March 25, 1960, after Mojave's default, Southern and GE confirmed an agreement whereby Southern "would pick-up and re-order on its own purchase orders all materials which MOJAVE had already ordered but which had not yet been delivered and billed by GE, or necessary materials not yet even ordered by MOJAVE, and GE would sell and invoice these on open account directly to SOUTHERN."² Southern then entered into a new subcontract April 12, 1960, with Evans-Jones Electric, Inc. (Evans) for the completion of Mojave's abandoned work. That agreement provided, inter alia, that Evans would pay for certain items, including the materials on invoice #5010. GE consented to this agreement and wrote Evans April 18, 1960, that #5010 was being transferred to Evans' account. This transfer was made and Evans paid GE in full for #5010 May 31, 1960.³

40 U.S.C.A. § 270b(b) provides:

"Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing, in the United States District Court for any district in which the contract was to be performed and executed and not elsewhere, irrespective of the amount in controversy in such suit, but no such suit shall be commenced after the expiration of one year after the day on which the last of the labor was performed or material was supplied by him. The United States shall not be liable for the payment of any costs or expenses of any such suit." (Emphasis added.)

The time limit provided in this section for the institution of suit is a limitation on the liability itself, and not of the remedy alone. It is a condition precedent to the institution of the suit that it be brought within the one-year time limit provided. United States for Use of Soda v. Montgomery, 253 F.2d 509 (3 Cir. 1958); Travis Equipment Co. v. D. & L. Construction Co. & Associates, 224 F.Supp. 410 (W.D.Mo.1963); United States v. Seaboard Surety Co., 201 F. Supp. 630 (N.D.Texas 1961); United States for Use of M. A. Hartnett, Inc., v. Enterprise Engineering & Construction Co., 169 F.Supp. 131 (D.C.Del.1958).

This suit was filed on March 13, 1961.⁴ and the issue for determination is whether it was filed within the one year limitation provided in § 270b(b). Since invoice #5010 represented the only material supplied after March 13, 1960, this suit was not filed timely unless the commencement date of the one year period within which to file suit was the date #5010 was charged⁵ or delivered⁶ to Mojave. We have previously held that the suit was not filed timely (229 F.Supp. 873), but in the present motions plaintiff seeks a reversal of that decision insofar as it applies to Southern and its surety, Continental.⁷

In our prior opinion we approved the analysis of 42 U.S.C.A. § 270b(b) propounded by counsel for defendant in which he concluded that this section, read in pari materia with the language of § 270b(a)⁸ and the legislative history of the 1959 amendment to § 270b(b),⁹ requires that a materialman's suit against the principal contractor and surety on the payment bond must be filed within one year from the date on which that same materialman last furnished the particular materials for which he claims payment in the suit.

Plaintiff strenuously objects to that holding and to the analysis of the statute we have adopted. It contends that the result of that reasoning would be to have an identical date for the commencement of three periods: (1) the 90 day period during which notice must be given to the prime contractor;¹⁰ (2) the 90 day period which must expire before the suit can be brought against the prime contractor;¹¹ and (3) the one year period in which suit must be brought.¹² It further contends that under defendant's analysis and our prior decision the effect of the transferral of invoice #5010 to Evans' account and the payment of this account by Evans was to shorten the one year period within which to file suit after it had begun to run. GE concludes that, rather than applying identical dates to the 90 day periods and the one year period, defendant's argument results in the application of different commencement dates for these periods.

GE contends that after Mojave defaulted in March, 1960, it consulted its records and found the date of the last invoice (#5010) to be March 14. Assuming this date to be the commencement date of the 90 day periods and of the year within which to file suit, GE gave the March 15 notice to Southern of the existence of its claim against Mojave well within 90 days of the assumed commencement date.¹³ GE's assumption of this commencement date is the basis for its conclusion that our prior decision applied a different starting date for the one year prescriptive period. However, the commencement date for the two 90 day periods is not at issue here. We, therefore, are not called upon to express an opinion as to the commencement date of either of these 90 day periods.¹⁴ We need only decide whether in this case the one year prescriptive period commenced after March 13, 1960.

After a...