US ON BEHALF OF & FOR USE OF BALF v. Casle Corp.

• Decision Date: 10 August 1995
• Docket Number: No. 3:94-cv-162(DJS).,3:94-cv-162(DJS).
• Citation: 895 F. Supp. 420
• Court: U.S. District Court — District of Connecticut
• Parties: UNITED STATES of America, on Behalf of and for the Use of the BALF CO., Plaintiff, v. The CASLE CORPORATION, et al., Defendants.

895 F. Supp. 420

UNITED STATES of America, on Behalf of and for the Use of the BALF CO., Plaintiff, v. The CASLE CORPORATION, et al., Defendants.

No. 3:94-cv-162(DJS).

United States District Court, D. Connecticut.

August 10, 1995.

COPYRIGHT MATERIAL OMITTED

Thomas F. Morgan, Robert Berman Shapiro, Cohn & Birnbaum, P.C., Hartford, CT, for plaintiff.

Gerald L. Garlick, Linda Clifford Hadley, David G. Chabot, Leventhal, Krasow & Roos, P.C., Hartford, CT, for defendants.

MEMORANDUM OPINION AND ORDER

SQUATRITO, District Judge.

I. INTRODUCTION

Use Plaintiff, the Balf Co. ("Balf"), filed this action against Defendants, the Casle Corporation ("Casle") and the American Insurance Company ("American"), on February 2, 1994.¹ It alleges violation of the Miller Act, 40 U.S.C. § 270b, and the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn.Gen.Stat. § 42-100a et seq. Balf seeks compensatory and punitive damages, interest and attorneys' fees.

This matter was tried before the court on April 5, 6, 11 and May 4, 1995.² Pursuant to Fed.R.Civ.P. 52(a), the court makes the following findings of fact and conclusions of law. For the reasons stated below, the court finds that judgment is due to be entered in favor of Balf on the Miller Act claim and in favor of Defendants on the CUTPA claim.

II. BACKGROUND

On or about November 21, 1991, Casle entered into a written contract ("the Contract") with the United States of America ("the Government"), acting by and through the United States Postal Service ("USPS"), for construction of a public building known as the Elmwood Branch facility in West Hartford, Connecticut ("the Project"). SOF ¶ 5. The Contract price exceeded $25,000.00. Id. In accordance with the provisions of the Miller Act and the Contract, Casle as principal, together with American as surety, duly executed and delivered a payment bond ("the Bond") to the Government. Id. ¶ 6.

In October 1991, Casle entered into a written contract with D.J. King Trucking & Excavating, Inc. ("D.J. King"), wherein D.J. King agreed to furnish the Project with a portion of the labor, equipment and material necessary to complete the site work and bituminous paving provided for under the Contract. Id. ¶ 8. Under this subcontract, D.J. King's work was to be completed on or before September 21, 1992. Pl.'s Ex. 3. D.J. King's performance was, however, delayed. Casle attributed the delay to: bad weather, the underlying clay, and lack of equipment and manpower on D.J. King's part. SOF ¶ 17.³

On or about September 23, 1992, D.J. King entered into an agreement with Balf. Pl.'s Ex. 4A. Under it, Balf agreed to be responsible for the placing and bituminous paving of the binder and top courses of the Project's parking lot. Id.; SOF ¶ 10.⁴ Under the terms of the agreement, Balf's work was to be completed on or before November 15, 1992. Pl.'s Ex. 4A at 2. Its work could not begin, however, until after D.J. King had completed working on the subbase and base levels below the binder and top courses.⁵

As of October, 1992, D.J. King had still not completed the portion of the work in the Project's parking lot for which it remained directly responsible. Id. ¶ 21. Moreover, during October and November, extensive repair and support work had to be done on the subsoil in the parking lot. The repairs were necessary because the soil had become extremely saturated. The repair and support work included the removal of the unsuitable subsoil and the subsequent replacement thereof with geotextile fabric, concrete mudslabs and new processed aggregate. See id. ¶ 21.

Due to the delays, Balf was not able to begin its paving work until late November, 1992. Id. ¶ 23. When it did attempt to do so, paving was very difficult because of the wet conditions. For example, while Balf was paving, it hit soft spots which started to pump, i.e. water seeped out of the soil. Id. ¶ 25. There were also areas where the ground weaved and the pavement rolled as it was paved. Id. Accordingly, Casle, Balf and D.J. King believed the area was too unstable to pave. Id.

As of November 30, 1992, the area to be paved was still pumping water and Balf's paving work had to be postponed. See id. ¶ 29.⁶ Upon the orders of the USPS and Casle, Balf placed the binder course on December 1 and 2. This work was done to protect the extensive repair and support work from the winter elements as well as to allow the soil saturation problems to drain and correct themselves.⁷ At the time Balf placed the binder course and stopped working on the Project, approximately fifty percent of the work under its agreement with D.J. King remained unfinished.⁸

On May 12, 1993, at Casle's request, Balf's personnel returned to the site to perform work on the binder course. SOF ¶ 49. This work had to be done prior to the placing of the top course. Balf's work on May 12 involved a seven man crew, including an asphalt roller operator, paving equipment, and the supplying of 3.09 tons of Class 1 binder patch. In sum, pavement was dug up, patched and rolled. Id. In addition to hand tools, a roller and a small truck were utilized to perform the work. Id.

Casle terminated its subcontract with D.J. King in late June, 1993.⁹ It then proceeded to complete the Project's site work on its own. This process included the direct hiring of Balf to perform paving via a contract dated June 22, 1993. Id. ¶¶ 55-56; Pl.'s Ex. 31. At the time Casle entered into its contract with Balf, it was aware that D.J. King had not paid Balf in full. Id. ¶ 63.¹⁰ Balf finally placed the top course of paving in the Project's parking lot in June, 1993. Id. ¶ 62.

On August 3, 1993, Balf made a demand upon Casle and American for the payment of sums due it, the principal of which totalled $76,688.05. Id. ¶¶ 50, 65. They refused to pay.¹¹ This lawsuit followed.

III. FINDINGS OF FACT & CONCLUSIONS OF LAW

A. The Miller Act

The Miller Act provides that, with certain exceptions not relevant here, the prime contractor of construction work on any public building or work exceeding $25,000.00 shall furnish a performance bond for the protection of the United States and a payment bond "for the protection of all persons supplying labor and material in the prosecution of the work provided for in said contract for the use of each such person." 40 U.S.C. § 270a(a).

As a prerequisite to an action on a payment bond, § 270b(a) requires a written notice be given to the prime contractor. The timely giving of the required notice is a condition precedent to the successful maintenance of the suit. Fleisher Eng'g & Constr. Co. v. United States, 311 U.S. 15, 18-19, 61 S.Ct. 81, 83, 85 L.Ed. 12 (1940); United States ex rel. General Elec. Co. v. H.I. Lewis Constr. Co., Inc., 375 F.2d 194, 198 (2d Cir. 1967). In pertinent part, § 270b(a) reads:

any person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing said payment bond shall have a right of action upon the said payment bond upon giving written notice to said contractor within ninety days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed....

40 U.S.C. § 270b(a).

Sections 270a and 270b(a) strike a balance. By allowing a person with a "direct contractual relationship" with a subcontractor to sue on the bond, the statute protects and benefits those who have "furnished or supplied" materials and/or labor on federal projects. See H.I. Lewis, 375 F.2d at 200. But § 270b(a) also protects the prime contractor by requiring those who have no direct contractual relationship with the prime contractor, but have "furnished or supplied" material and/or labor to the project, to provide timely notice of a subcontractor's non-payment. Id. Absent such notice, the prime contractor would have no ready means to determine the extent of its ultimate obligations. See United States ex rel. SGB Universal Builders Supply, Inc. v. Fidelity & Deposit Co., 475 F.Supp. 672, 674 (E.D.N.Y.1979).

B. Count I — The Miller Act Claim

Balf maintains that it is entitled to recover under the Miller Act because it gave Casle and American timely notice. Specifically, Balf contends that its "notice was timely since the labor and materials provided ... in May, 1993 were supplied as a part of the contract between it and D.J. King for the Project...." Final Pretrial Order ("FPO") at 13. The court agrees.

1. The Case-In-Chief

In cases of this nature, the applicable legal test for determining when the notice period commences is "whether the work was performed ... as a part of the original contract or for the purpose of correcting defects, or making repairs following inspection of the project." United States ex rel. Austin v. Western Elec. Co., 337 F.2d 568, 572-73 (9th Cir.1964). See Mod-Form, Inc. v. Barton & Barton Co., No. 90-CV-71387-DT, 1992 WL 132832, at *1 (6th Cir. June 15, 1992); United States ex rel. Magna Masonry, Inc. v. R.T. Woodfield, Inc., 709 F.2d 249, 251 (4th Cir.1983); United States ex rel. Noland Co. v. Andrews, 406 F.2d 790, 792 (4th Cir.1969); United States ex rel. State Elec. Supply Co. v. Hesselden Constr. Co., 404 F.2d 774, 776 (10th Cir.1968); United States ex rel. General Elec. Co. v. Gunnar I. Johnson & Son, Inc., 310 F.2d 899, 903 (8th Cir.1962); United States ex rel. Raymond A. Bergen, Inc. v. DeMatteo Constr. Co., 467 F.Supp. 22, 23-24 (D.Conn.1979); United States ex rel. Green-wald-Supon, Inc. v. Gramercy Contractors, Inc., 433 F.Supp. 156, 162 (S.D.N.Y.1977); United States ex rel. Air Stream Prods. Co. v. Essential Constr. Co., Inc., 363 F.Supp. 681, 682 (S.D.N.Y.1973).¹²

It is well established that labor for the purpose of correcting or repairing defects in a completed...