Centre Concrete Co. v. AGI, INC.

OPINION OF THE COURT

PAPADAKOS, Justice.

This case concerns a statute of limitations defense. It raises the question of whether the limitations period is extended by a statute that bars suit on certain contracts during the first ninety days after payment is due thereon. The Commonwealth Court held that the limitations period is not extended in these circumstances, but that it runs from the date of breach. We think that this is unjust and contrary to the law in Pennsylvania and the law as applied across the country.

The germane facts in this case are as follows: Appellee, AGI, Inc. (“AGI”) was awarded a road construction contract with the Commonwealth of Pennsylvania. AGI, the general contractor, then contracted with Appellant, Centre Concrete Company, to provide raw materials for use in the project. The final delivery date of the materials supplied by Appellant was October 21, 1982. The amount AGI owed for the materials was in excess of $26,000.00 and this debt was never paid. Appellee, Insurance Company of North America (“INA”) was the surety for AGI, the general contractor. The Public Works Contractors’ Bond Law of 1967, Act of December 20, 1967, P.L. 869, 8 P.S. §§ 191-202, specifically section 4(a) thereof (8 P.S. § 194(a)), provides:

(a) Subject to the provisions of subsection (b) hereof, any claimant who has performed labor or furnished material in the prosecution of the work provided for in any contract for which a payment bond has been given, pursuant to the provisions of subsection (a) of section 8 of this act, and who has not been paid in full therefor before the expiration of ninety days after the day on which such claimant performed the last of such labor or furnished *29the last of such materials for which he claims payments, may bring an action on such payment bond in his own name, in assumpsit, to recover any amount due him for such labor or material, and may prosecute such action to final judgment and have execution on the judgment.

As a result of this section, Appellant was not permitted to bring an action against the surety, INA, until the general contractor, AGI, had failed to pay for ninety (90) days. The ninetieth day in this case would have been January 19,1983, ninety days from the last date materials were supplied by Appellant. The next day, January 20, 1983, was the earliest day upon which they could have brought suit. On January 11, 1983, Appellant submitted this claim to INA, the surety. INA never responded to the claim until after they calculated that the statute of limitations had run.

Under date of December 2, 1983, INA wrote to Appellant and stated:

Under Pennsylvania law you were required to file suit within one year from the last day you performed work or supplied material on the project ... [T]he last date you furnished labor, material or supplies and services in connection with the job was on October 21, 1982. Consequently, we are not in a position to honor your claim.

Appellant thereupon immediately commenced suit against AGI and INA on December 2, 1983, by the filing of a praecipe for a writ of summons. In new matter INA pleaded the statute of limitations defense and moved for judgment on the pleadings. This motion was denied by the trial court but that court certified the question to permit appellate review of their interlocutory order. The Commonwealth Court granted permission for appeal and reversed the order of the trial court. 107 Pa.Cmwlth. 326, 528 A.2d 685.

INA’s initial defense rested on the language of section 7(b) of the Bond Law, 8 P.S. § 197, which had required that suits be initiated within one year of the last supply date. However, in 1978 this section was repealed by the Judiciary Act Repealer Act, Act of April 28, 1978, P.L. 202, 42 P.S. *30§ 20001-20004, and it was replaced by what are now sections 5523(3) and 5502(a) of the Judicial Code, which provide:

The following actions and proceedings must be commenced within one year: ... (3) An action upon any payment or performance bond.

42 Pa.C.S.A. § 5523(3).

[T]he time within which a matter must be commenced under this chapter shall be computed, ... from the time the cause of action accrued, the criminal defense was committed, or the right of appeal arose.

42 Pa.C.S.A. § 5502(a).

Appellant argued that their cause of action did not accrue until they were able to bring suit, which would have been on the ninety-first day after the last date of delivery of materials. The Commonwealth Court rejected this argument.

As set forth in Appellant’s Petition for Allowance of Appeal to this Court, it is obvious from the pleadings considered by the trial court that Appellant proceeded in an orderly and business-like fashion by first submitting their claim to INA before rushing to the courthouse. We granted review and now reverse.

In Bell v. Brady, 346 Pa. 666, 31 A.2d 547 (1943), this Court held that “a cause of action accrues only when one has the right to institute a suit,” 31 A.2d at 549. Normally, one has the right to institute a suit when a wrong has been done, a duty has been breached, or an injury has been inflicted. See, Guida v. Giller, 406 Pa. 111, 176 A.2d 903 (1962); Foley v. Pittsburgh-Des Moines Co., 363 Pa. 1, 68 A.2d 517 (1949); Chittenholm v. Giffin, 357 Pa. 616, 55 A.2d 324 (1947). It may sometimes be difficult to determine at just what point in time an injury has occurred or a duty has been breached. See, Sicola v. First National Bank of Altoona, 404 Pa. 18, 170 A.2d 584, 87 A.L.R.2d 1044 (1961). Nonetheless, at whatever point in time the wrong was completed, the wronged party’s cause of action ordinarily accrues at that point in time, and the statute of limitations *31begins to run therefrom. That cannot be the case, however, where, as here, even though the wrong has been done, the aggrieved party must, by statute, wait some period of time (and sometimes also make a formal demand or perform some other act) before being granted access to the courts. One does not have the “right” to institute a suit if, by statute, the courts cannot hear it. The contrary result would be unfair and unjust and would undermine the intent of the legislature to provide a fixed period of time within which suits may be brought, free of unexpected and unforeseeable shrinkage. In this connection, see, Bond v. Gallen, 469 A.2d 556, 503 Pa. 286 (1983).

We, therefore, hold that Appellant had one year from the expiration of the statutory ninety day waiting period to bring suit against INA.

Our holding is in accord with the law across the country. Unless a statute provides otherwise, the statute of limitations begins to run at the time when a complete cause or right of action accrues or arises, which occurs as soon as the right to institute and maintain a suit arises.
The general rule, as embodied in most statutes, is that, unless a statute specifically provides otherwise, as, for example, a statute specifically providing that the statute of limitations shall run from a particular event which may precede the time where the liability actually arises, the statute of limitations begins to run at the time when a complete cause or right of action accrues or arises, and only at such time, that is, as soon as the right to institute and maintain a suit arises, or when there is a demand capable of present enforcement. An action may accrue at the time of a wrongful act, although the limitations period does not always begin on the date the wrong is committed.
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54 C.J.S. Limitations of Actions, § 81 (footnotes and case citations omitted.)

*32See also, 54 C.J.S. Limitations of Actions, § 93. In Young v. City of Seattle, 191 P.2d 273, 30 Wash.2d 357, 3 A.L.R.2d 704 (1948), the Supreme Court of the State of Washington considered a city charter provision requiring that claims for damages against the City be presented within thirty days after the happening of the tortious event and that no suit could be instituted until sixty days after the presentation of the claim. That distinguished Court held the charter provision to be valid and that it had the effect of delaying the date on which plaintiffs’ cause of action first accrued under a three year state statute of limitations. The court quoted 1 Wood on Limitations, 4th Ed., 684, § 122a:

Statutes of limitation commence to run against a cause of action from the time it accrues, or from the time when the holder thereof has the right to apply to the court for relief, and to commence proceedings to enforce his rights. The time when a cause of action has accrued within the statutes of limitations means the time when plaintiff first became entitled to sue.

We therefore hold that a statutorily imposed time ban against filing suit acts as a toll on the applicable statute of limitations which does not begin to run until the expiration of the banned period. In this case, the ninety day ban to filing suit delayed the commencement of the one year statute of limitations until January 20, 1983 and the commencement of the action on December 2, 1983 was timely.

Reversed.

FLAHERTY, J. files a dissenting opinion in which NIX, C.J., joins.