US v. Sun Engineering Enterprises, Inc.

• Decision Date: 31 March 1993
• Docket Number: 92-1710 (JAF).,Civ. No. 91-2297 (JAF)
• Parties: The UNITED STATES of America for the Use and Benefit of LUIS A. CABRERA, S.E., A Special Partnership, Plaintiff, v. SUN ENGINEERING ENTERPRISES, INC.; CNA Casualty of Puerto Rico, Defendants. The UNITED STATES of America for the Use and Benefit of Efigenio Curet SANTIAGO d/b/a Curet Tech Services, Plaintiff, v. SUN ENGINEERING ENTERPRISES, INC.; CNA Casualty of Puerto Rico, Defendants.
• Court: U.S. District Court — District of Puerto Rico

817 F. Supp. 1009

The UNITED STATES of America for the Use and Benefit of LUIS A. CABRERA, S.E., A Special Partnership, Plaintiff, v. SUN ENGINEERING ENTERPRISES, INC.; CNA Casualty of Puerto Rico, Defendants.

The UNITED STATES of America for the Use and Benefit of Efigenio Curet SANTIAGO d/b/a Curet Tech Services, Plaintiff, v. SUN ENGINEERING ENTERPRISES, INC.; CNA Casualty of Puerto Rico, Defendants.

Civ. Nos. 91-2297 (JAF), 92-1710 (JAF).

United States District Court, D. Puerto Rico.

March 31, 1993.

Eduardo Castillo-Blanco, San Juan, P.R., for plaintiff Cabrera.

Juan R. Lugo-Lebrón, San Juan, P.R., for plaintiff Curet.

Federico Lora-López, San Juan, P.R., for defendants.

OPINION AND ORDER

FUSTE, District Judge.

Two independent subcontractors brought separate suits against a common contractor and its surety pursuant to federal legislation that provides a remedial cause of action for contract disputes involving federal building projects. Both subcontractors allege that the contractor and its surety are jointly and severally liable for the full compensation agreed to under the respective subcontracts, in addition to interest on the unpaid subcontracts, attorneys' fees, and court costs. The contractor avers that the money damages prayed for under the subcontracts are excessive given the subcontractors' performances, or in the alternative, that the special federal law under which the subcontractors brought the suit bars these plaintiffs a federal remedy on statute of limitations grounds. Since similar issues are involved, as well as the existence of common defendants, the two suits have been consolidated before this court. The contractor and surety have moved for summary judgment against one of the two subcontractors, claiming that the subcontractor's suit does not meet the time requirements of the federal statute. The summary judgment motion is denied.

I. Background

On March 23, 1990, Efigenio Curet Santiago, doing business as Curet Tech Services ("Curet"), entered into a subcontract with Sun Engineering Enterprises, Inc. ("Sun Engineering"), the contractor for federal project number 089984-89-B-0163 to renovate the lobby and offices of the United States General Post Office of San Juan, Puerto Rico.¹ Curet, a Puerto Rico entity, agreed to perform the installation of certain air-conditioning systems at the post office for Sun Engineering, also a Puerto Rico concern. The original amount of Curet's subcontract was $56,000. Curet argues that an additional $1,609.57 is owed because of extra work completed at the request of contractor Sun Engineering. CNA Casualty of Puerto Rico ("CNA") was the surety under the subcontract and furnished the United States with a performance and payment bond under number 3139917 of the contract.

Curet began its air-conditioning work and completed the contract between December 1990 and June 1991. The exact date is in dispute. Mr. Curet-Santiago, the owner of Curet, stated that the subcontract was completed in December of 1990. (Civil No. 91-2297, Docket Document No. 18, Motion for Summary Judgment, Exhibit A, Deposition of Curet-Santiago, at 3-4, 13). On February 11, 1991, Curet claims to have sent defendants an invoice for the unpaid portion of the subcontract. When Curet received no payments, a second letter dated March 12, 1992, was allegedly sent to Sun Engineering's client, the United States, seeking assistance in forcing Sun Engineering to pay Curet the unpaid balance of the subcontract price. On February 27, 1991, according to the record, an architect had already inspected Curet's work product and found several "deficiencies". (Civil No. 91-2297, Docket Document No. 19, Motion Opposing Summary Judgment, Exhibit B, Letter to Sun Engineering's President, Francisco Jiménez, from Architect Ismael Elías Cortés, of 8/7/1991, at 1-2). Curet was allegedly unaware of any "deficiencies" until May 6, 1991, at which point Curet was notified of the actions necessary to correct various "deficiencies" in order to satisfy the United States and Sun Engineering.² Curet performed the requested tasks. In a sworn statement, Sun Engineering's President, Francisco Jiménez ("Jiménez"), indicated that he was assured that the entire project was completed by May 17, 1991. (Civil No. 91-2297, Docket Document No. 18, Motion for Summary Judgment, Exhibit C, Sworn Declaration of Jiménez, at 1). The inspector, Architect Cortés, acknowledged his approval of Curet's performance in a letter to Jiménez dated June 12, 1991. (Civil No. 91-2297, Docket Document No. 18, Motion for Summary Judgment, Exhibit D, Letter from Architect Cortés to Jiménez of 6/12/1991, at 1).

On May 27, 1992, Curet filed suit with the Clerk of the United States District Court for the District of Puerto Rico pursuant to the Miller Act, 40 U.S.C. §§ 270a et seq., seeking the unpaid balance of the air-conditioning subcontract from Sun Engineering and CNA.³ (Civil No. 92-1710, Docket Document No. 1, Complaint). Curet argues that Sun Engineering's alleged breach of contract has cost Curet at least $17,965.57.

On July 7, 1992, following a motion by plaintiffs, Curet's claim and that of the other subcontractor were consolidated by order of the court. (Civil No. 92-1710, Docket Document No. 7, Motion for Consolidation). On August 10, 1992, Defendants Sun Engineering and CNA moved for summary judgment against Plaintiff Curet, arguing that plaintiff's Miller Act claim is barred by the one-year statute of limitations set forth in the statute. 40 U.S.C. § 270b. (Civil No. 91-2297, Docket Document No. 18, Motion for Summary Judgment).

II. Standard for Summary Judgment

Federal Rule of Civil Procedure 56(c) states that summary judgment "shall be rendered forthwith if the pleadings, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c) (emphasis added). Therefore, in deciding a summary judgment motion, there are essentially three inquiries to pursue: the materiality and genuineness of any factual dispute, and the entitlement to judgment as a matter of law. Id.; Román Figueroa v. Torres Molina, 754 F.Supp. 239, 240-41 (D.P.R.1990).

"`Genuine' means that the evidence is such that a reasonable jury could resolve the point in favor of the nonmoving party." United States v. One Parcel of Real Property with Bldgs., 960 F.2d 200, 204 (1st Cir.1992) (citation omitted). A "material" fact describes one that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). See also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Garside v. Osco Drug, Inc., 976 F.2d 77, 78 (1st Cir.1992).

Summary judgment may be granted even if there is a factual dispute so long as the fact at issue is immaterial to the legal disposition of the case. Moreover, summary judgment may be granted even if an allegedly disputed fact is material as long as there is no genuine dispute about the fact. U.S. Fire Ins. Co. v. Producciones Padosa, Inc., 835 F.2d 950, 953 (1st Cir.1987).

In all of the court's considerations in deciding a summary judgment motion, the court must consider the record in the light most favorable to the non-moving party. Bank One Texas, N.A. v. A.J. Warehouse, Inc., 968 F.2d 94, 97 (1st Cir.1992).

III. The Miller Act and the Act's Statute of Limitations

"The Miller Act, 40 U.S.C. § 270b,⁴ provides a federal cause of action for persons supplying labor and materials upon a payment bond secured by the principal contractor of a federal government project."⁵ United States use of John D. Ahern Co. v. J.F. White Contracting Co., 649 F.2d 29, 31 (1st Cir.1981) (emphasis added). Section 270b declares that:

Every person who has furnished labor or material in the prosecution of the work provided for in a contract for the construction, alteration, or repair of any public building of the United States, ... shall have the right to sue on the required payment bond for the amount, or the balance thereof, unpaid at the time of institution of such suit.... 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 ... irrespective of the amount in controversy in such suit, but no Miller Act 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.... The United States shall not be liable for the payment of any costs or expenses of any such suit.

40 U.S.C. § 270b. See also 40 U.S.C. § 270a (defining relevant contracts and describing bond requirements for such contracts).

Federal courts have struggled to ascertain the precise date for running the Miller Act's one-year statute of limitations; according to the language of the statute, it is "the day on which the last of the labor was performed or material was supplied...." 40 U.S.C. § 270b(b). The Miller Act's original statute of limitations running mechanism was the "date of final settlement." See 1959 U.S.Code Cong. & Admin.News, at 1995-2000. Apparently, Congress amended the Miller Act in 1959 to adopt the performance-and-supply language to "provide `a simple, fixed and certain method' for determining the time period within which to file suit." United States use of T.L. Wallace Constr., Inc. v. Fireman's Fund Ins. Co., 790 F.Supp. 680, 684 (S.D.Miss.1992) (quoting 1959 U.S.Code Cong. & Admin.News, at 1996). Despite this legislative clarification, the 1959 amendment has not entirely ended the jurisprudential debate regarding the timing of tolling: Does the contractual project need to be "completely finished" in order to begin the running of ...