W. F. Thompson Const. Co. v. Southeastern Palm Beach County Hospital Dist., 64-611

• Decision Date: 27 April 1965
• Docket Number: No. 64-611,64-611
• Citation: 174 So.2d 410
• Parties: W. F. THOMPSON CONSTRUCTION CO., Inc., a Florida corporation, and United States Fidelity and Guaranty Company, a Maryland corporation, Appellants, v. SOUTHEASTERN PALM BEACH COUNTY HOSPITAL DISTRICT, a political subdivision of the state of Florida, for the use and benefit of Miami Tile & Terrazzo, Inc., a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

Page 410

174 So.2d 410

W. F. THOMPSON CONSTRUCTION CO., Inc., a Florida corporation, and United States Fidelity and Guaranty Company, a Maryland corporation, Appellants, v. SOUTHEASTERN PALM BEACH COUNTY HOSPITAL DISTRICT, a political subdivision of the state of Florida, for the use and benefit of Miami Tile & Terrazzo, Inc., a Florida corporation, Appellee.

No. 64-611.

District Court of Appeal of Florida, Third District.

April 27, 1965.

Battisti & Persandi, Coral Gables, for appellants.

Feibelman, Friedman, Hyman, Durant & Britton, Miami, for appellee.

Before CARROLL, HENDRY and SWANN, JJ.

SWANN, Judge.

This is an appeal from a summary judgment as to liability, and a final judgment as to damages, against a contractor, and his surety, on a labor and material payment bond.

The appellant W. F. Thompson Construction Co., Inc., and United States Fidelity and Guaranty Company, were the defendants below, and Southeastern Palm Beach County Hospital District, and Miami Tile & Terrazzo, Inc., appellees herein, were plaintiffs.

On or about April 10, 1962, plaintiff, Southeastern Palm Beach County Hospital District, entered into a contract with defendant, contractor W. F. Thompson Construction Co., Inc., to construct certain improvements on the premises of the plaintiff.

Thereafter, the contractor, as principal, and United States Fidelity and Guaranty Company, as surety, executed two bonds in connection with the contract for improvements at the hospital. The bond in question was conditioned upon the prompt payment of all persons for labor and material used or easonably required for the performance of the contract.

On August 20, 1963, Southeastern Palm Beach County Hospital District filed suit on the payment bond for the use and benefit of Miami Tile & Terrazzo, Inc., who supplied certain materials to a sub-contractor who defaulted.

The defendants answered, alleging that the sub-contractor was paid in full; that they received a full release of lien setting forth that all materials and labor furnished for said construction had been paid in full; that the plaintiffs failed to comply with the provisions of the bond, namely that the construction was completed prior to January 1, 1963, and they failed to give written notice within the period provided, as a condition precedent to legal action.

The pertinent provisions of the bond stated:

'(3) No suit or action shall be commenced hereunder by any claimant,

'(a) Unless claimant shall have given written notice to any two of the following: The Principal, the Owner, or the Surety above named, within ninety (90) days after such claimant did or performed the last of the work or labor, or furnished the last of the materials for which said claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the materials were furnished, or for whom the work or labor was done or performed. Such notice shall be served by mailing the same by registered mail, postage prepaid, in an envelope addressed to the Principal, Owner or Surety, at any place where an office is regularly maintained for the transaction of business, or served in any manner in which legal process may be served in the state in which the afforesaid project is located, save that such service need not be made by a public officer. (Emphasis supplied).

'(b) After the expiration of one (1) year following the date on which Principal ceased work on said Contract.'

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The plaintiffs did not allege or claim compliance with these provisions of the bond, but took the position that the ninety day provision was repugnant to Section 255.05, Florida Statutes, F.S.A, as written before its amendment in 1959. The defendant argued that because of the ninety day notice provision in the bond, the plaintiff was barred from recovery on said bond because of the fact that no notice had been given. Both parties moved for summary judgment. Judgment was entered, as to liability, for the plaintiffs.

The Court held, inter alia:

'3. That the limitation provision contained in Paragraph (3)(a) and (b) of said bond are not applicable to the plaintiff herein and are mere surplusage in view of the applicable provisions of Florida Statute 255.05, as said Statute read on the 10 day of April 1962.

'4. That there is a genuine issue as to a material fact, to-wit: the amount owing to the plaintiff on account of its contract with Metro-Stewart, Inc. and whether any of said materials were furnished for and in connection with the construction of the work covered by the bond herein.'

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The cause proceeded to trial on damages and final judgment was thereupon entered. This appeal was thereafter timely perfected.

The plaintiffs urge there was ample evidence before the court establishing that the bond was, in fact, posted pursuant to Section 255.05 Florida Statutes, F.S.A., in that the contract for construction was with Southeastern Palm Beach County Hospital District, a political subdivision of the State of Florida, and that Section 255.05 requires such a penal bond to be posted by:

'(1) Any person entering into a formal contract with the state, any county of said state, or any city in said state, or any political subdivision thereof, or other public authority, for the construction of any public building, or the prosecution and completion of any public work or for repairs upon any public building, or public work, shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligations that such contractor shall promptly make payments to all persons supplying him labor, material and supplies, used directly or indirectly by the said contractor, or subcontractors, in the prosecution of the work provided for in said contract; * * *'

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It is clear that where a surety company executes a penal bond in compliance with or for the purpose of fulfilling a statutory bond requirement, the surety company will be liable for the conditions provided by the statute.

In the case of the City of Ocala v. Continental Casualty Co., 1930, 99 Fla. 736, 127 So. 326, 77 A.L.R. 8, the action was against the contractor's surety and the contractor to recover for material and services rendered to the contractor in connection with street improvements. The Supreme Court stated:

'* * * If a surety company executes a penal bond purporting in terms or in substance or by sufficient reference to be in accordance with or for the purpose of complying with the requirements of the statute in cases of such contracts, as to 'additional obligations that such contractor shall promptly make payments to all persons supplying him labor, material and supplies used directly or indirectly in the prosecution of the work provided for in the contract,' the surety company will be liable as provided by the statute. Fulghum v. State, 92 Fla. 662, 109 So. 644.'

In Collins v. National Fire Insurance Co. of Hartford, Fla.App.1958, 105 So.2d 190, the court following Continental Casualty Co., supra, stated:

'In the Ocala case the bond contained no language to meet the requirement to protect the laborers or materialmen, nor was there language in the contract to fulfill this deficiency. However, it is clearly indicated that where a surety company executes a penal bond which appears by sufficient reference to be in compliance with or for the purpose of fulfilling the statutory bond conditions designed to protect...