GE Supply v. C & G Enterprises, Inc.

United States Court of Appeals
For the First Circuit

No. 99-1571

GE SUPPLY, THE UNITED STATES OF AMERICA FOR THE USE
AND BENEFIT OF THE GE SUPPLY, A DIVISION OF GENERAL ELECTRIC
COMPANY,

Plaintiff, Appellee,

v.

C&G ENTERPRISES, INC.,
AMERICAN INSURANCE COMPANY,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Jose Antonio Fusté, U.S. District Judge]

Before

Torruella, Chief Judge,

Campbell and Wallace*, Senior Circuit Judges.

Paul T. DeVlieger, with whom Harry R. Blackburn &
Associates, P.C. was on brief for appellants.
Andrés R. Neváres-González, with whom José A. Sánchez
Alvarez, Melissa Reyes Pérez, and Neváres, Sánchez-Alvarez &
Mendez were on brief for appellee.

*Of the Ninth Circuit, sitting by designation.
 May 2, 2000

CAMPBELL, Senior Circuit Judge. Defendants, appellants

G & C Enterprises, Inc. (“G & C”) and American Insurance Company

("American") appeal from the district court’s grant of summary

judgment pursuant to the Miller Act in favor of plaintiff,

appellee the United States for the use and benefit of GE Supply

("GE Supply"). We affirm the judgment below, although on

grounds somewhat different from those relied upon by the

district court.

I.

We describe the relevant facts in the light most

favorable to the appellant. See New York State Dairy Foods,

Inc. v. Northeast Dairy Compact Comm'n, 198 F.3d 1, 3 (1st Cir.

1999). G & C entered into a contract with the United States to

perform electrical services on the United States Naval Station

Commissary Facility in Puerto Rico ("the Project"). American,

as surety, issued a payment bond on behalf of G & C in

connection with the Project. GE Supply and its affiliate, GE

Caribe, provided materials to G & C for use in the Project.2 GE

Supply's last delivery of materials to G & C was on July 2,

1996. GE Supply enclosed an invoice with each delivery.

2GE Caribe is not a party to this suit.

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Printed on the reverse side of the invoices were terms and

conditions, which included the statement that "[e]ach invoice

shall be due and payable within its own terms." The invoices

also contained an integration clause:

This document contains the complete and
exclusive statement of the terms of the
contract between us. It supercedes all
previous requests, quotations or agreements.
Any additional or different terms will not
be part of the contract unless approved by
GE Supply in writing.

Also included in the terms and conditions was a provision

stating: “In the event of non-payment, you agree to pay us

reasonable attorney’s fees and court costs, if any, incurred by

us to collect payment and interest charges.”

G & C failed to pay on outstanding invoices. GE Supply

notified American of G & C’s nonpayment within ninety days of

the last delivery, but American refused to pay GE Supply under

the payment bond. On June 11, 1997, GE Supply filed a complaint

against G & C and American in the District Court for the

District of Puerto Rico pursuant to the Miller Act, 40 U.S.C. §

270a et seq. GE Supply erroneously attached to the complaint an

invoice used by GE Caribe, which contained different terms and

conditions from the invoices GE Supply had sent to G & C. The

terms and conditions on the GE Caribe invoices stated “Each

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shipment or delivery shall be deemed to have been sold under a

separate and independent contract.”

On August 12, 1998, GE Supply moved for summary

judgment. Defendants opposed that motion and cross-moved for

summary judgment, contending that the invoices on which GE

Supply sought to recover represented separate and independent

contracts, many of which were completed outside the one-year

limitation period contained in the Miller Act, id. § 270b(b).

Specifically, defendants maintained that GE Supply's claim was

time-barred to the extent it was based on materials it supplied

to G & C prior to June 11, 1996.3

While under the mistaken belief that no opposition had

been filed, the district court allowed GE Supply's motion for

summary judgment on September 10, 1998. Defendants moved for

reconsideration on the grounds that it had, in fact, timely

responded to GE Supply's motion. On October 6, 1998, the court

allowed the motion and vacated its summary judgment order,

stating that it would consider the matter anew.

On October 26, 1998, GE Supply filed a response to

defendants’ cross-motion for summary judgment asserting, inter

alia, that a GE Caribe invoice (including the provision "[e]ach

3G & C also asserted an estoppel argument based on GE
Supply’s continuation of shipments after G & C failed to pay.
G & C does not press this argument in its appellate brief.

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shipment or delivery shall be deemed to have been sold under a

separate and independent contract") was incorrectly attached to

its complaint due to an attorney’s error. GE Supply provided

the court with its own invoices containing the correct terms and

conditions. GE Supply also admitted that it had erroneously

included in its damages calculation sums allegedly due to GE

Caribe. It acknowledged that it was not entitled to recover

those sums, and withdrew claims in the amount of $20,939.51.

On November 3, 1998, defendants filed a Motion for

Leave to File a Reply Brief so it could address the “new” terms

and conditions printed on the correct invoices. The district

court did not act on this motion, and defendants never filed the

reply brief. On November 18, 1998, the district court entered

an opinion and order reaffirming its earlier order granting

summary judgment to GE Supply. See United States ex rel. GE

Supply v. G & C Enterprises, Inc., 29 F. Supp. 2d 49 (D.P.R.

1998). As to the issue of statute of limitations, the court

concluded that, upon examination of the correct invoices, “GE

Supply did not enter a ‘series of contracts’ with G & C, but

rather agreed to provide G & C with the necessary materials for

the Project through a series of shipments . . .” Id. at 53.

Accordingly, it held that the complaint was timely filed. The

district court entered a judgment for damages in the amount of

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$134,034.52 and awarded attorney’s fees in the amount of twenty

percent of the judgment.

On December 2, 1998, defendants filed a motion for

relief from judgment pursuant to Fed. R. Civ. P. 59(e) and 60.

They contended that the district court erred in applying the

summary judgment standard; that it failed to construe the terms

and conditions in accordance with their plain and ordinary

meaning; and that it erred in awarding attorneys’ fees. On

March 5, 1999, the district court entered another opinion and

order denying defendants’ motion. It stated that additional

briefing would not have changed defendants’ argument that each

invoice was a separate contract, and that “[d]efendants had

ample opportunity to make all necessary points.” The court

clarified that its earlier judgment was to exclude the claims

relating to materials supplied by GE Caribe. Defendants appeal

from the district court’s grant of summary judgment.

II.

This Court reviews orders for summary judgment de novo,

construing the record in the light most favorable to the

nonmovant and resolving all reasonable inferences in that

party's favor. See Houlton Citizens' Coalition v. Town of

Houlton, 175 F.3d 178, 184 (1st Cir. 1999). This standard of

review does not limit us to

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the district court's rationale; we may affirm the entry of

summary judgment on "any ground revealed by the record." Id.

Defendants argue that the district court erred in

determining that there was a single agreement between G & C and

GE Supply for materials, rather than a series of separate and

independent contracts. Hence, they contend, the court

incorrectly concluded that the entirety of GE Supply’s claim was

timely filed under the Miller Act. Defendants also argue that

the district court erred in awarding attorney’s fees against

American.

"The Miller Act requires a general contractor

performing a contract valued at over $25,000 on any public

construction project to obtain a performance bond for the

protection of persons supplying labor and material in the

prosecution of the work on the project." United States ex rel.

Water Works Supply Corp. v. George Hyman Constr. Co., 131 F.3d

28, 31 (1st Cir. 1997); 40 U.S.C. § 270a(a)(2). Persons who

have "furnished labor or material" to a public construction

project may sue to recover from the payment bond any amount owed

to them. 40 U.S.C. § 270b(a).

The purpose of the Miller Act is "to protect persons

supplying labor and material for the construction of federal

public buildings in lieu of the protection they might receive

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under state statutes with respect to the construction of

nonfederal buildings." United States ex rel. Sherman v. Carter,

353 U.S. 210, 216 (1957); see also F.D. Rich Co. v. United

States ex rel. Indus. Lumber Co., 417 U.S. 116, 122 (1974). The

Act is "highly remedial" and entitled to a "liberal

construction." See J.W. Bateson Co. v. United States ex rel.

Bd. of Trustees, 434 U.S. 586, 594 (1978). Keeping in mind

these principles, we turn to defendants’ arguments.

A. Statute of Limitations

The statute of limitations contained in the Miller Act

provides that a suit must be commenced "after the expiration of

one year after the day on which the last of labor was performed

or material was supplied by [the supplier]." 40 U.S.C. §

270b(b). Here, it is undisputed that GE Supply's last delivery

to G & C was on July 2, 1996, and that GE Supply filed its

complaint under the Miller Act on June 11, 1997.

The district court interpreted the language printed on

the invoices to conclude that they represented a single

agreement between GE Supply and G & C, not a series of separate

and independent contracts, as defendants alleged. Accordingly,

it concluded that no part of GE Supply's claim is time-barred

under the Miller Act. See id. While we agree with the district

court’s ultimate conclusion, we reach it not on the basis of

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state-law contract interpretation, but on the Miller Act itself.

The plain language of § 270b(b) fixes the relevant

deadline as one year from "the day on which the last of . . .

material was supplied." There is nothing ambiguous about this

provision, and so we must give effect to its obvious meaning.

See General Elec. Co. v. Southern Constr. Co., 383 F.2d 135, 138

(5th Cir. 1967). The text of § 270b(b) references only the time

that the last material was supplied; it does not advert to

whether or not the contractor and the supplier treated the

separate shipments of project material under the bond as being

governed by a distinct contract. Regardless of whether each

invoice represented in certain respects a separate contract as

between the parties, it is undisputed that GE Supply provided

material for a single project, and that American issued a single

payment bond on behalf of G & C in connection therewith. Hence,

since GE Supply brought its Miller Act claim within the one-year

period following the day on which it supplied the last material

for the Project, its entire claim is timely. See id.; United

States ex rel. Trane Co. v. Raymar Contracting Corp., 406 F.2d

280 (2d Cir. 1968) (Kaufman, J., dissenting).

In so holding, we follow such authority as there is

addressing this question. In his dissenting opinion in Trane,

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Judge Kaufman considered whether a plaintiff should be permitted

to recover for material delivered under two separate agreements

for the same project, where only one delivery took place within

a year of filing. 4 See Trane, 406 F.2d at 283 (Kaufman, J.,

dissenting). He concluded that the statute’s plain language and

underlying policies permitted plaintiffs to proceed with a claim

encompassing both agreements:

It is more in keeping with Congressional
intent for us to construe the one-year
limitation as running only once for each
supplier on a job, commencing on the last
day he supplied any material for work under
the prime contract. Not only does this
result better comport with the literal
language of § 270b(b), which contains no
requirement that the time limit should run
separately for each separate claim, as does
§ 270b(a) (dealing with the 90 day notice
provision), but I believe it wiser doctrine.
Otherwise, a materialman would be required
to bring multiple suits to recover for
materials which he supplied to a single
project under separate contracts spread over
several years. Piecemeal litigation is a
plight to be avoided wherever feasible.

4In Trane, the plaintiff sought to recover compensation
under the Miller Act for air-conditioning equipment it had
supplied for a project, as well as for electric motors that were
subsequently supplied by another company pursuant to a different
agreement. See Trane, 406 F.2d at 282. Only the motors were
supplied within a year before plaintiff filed its complaint.
The majority in Trane did not base its holding on the issue
before us. Rather, it concluded that the plaintiff did not
timely file its Miller Act claim because it was not a party to,
and had not ratified, the agreement to provide electric motors.
See id.

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Id. at 283 (internal citations omitted).

We are persuaded by Judge Kaufman’s analysis, as have

been the district courts considering this issue. See, e.g.,

United States ex rel. Speer v. Damco Contractors, Inc., No.

CIV.A. 85-7404, 1986 WL 8483, at *2 (E.D. Pa. Jul. 31, 1986);

United States ex rel. Grotnes Machine Works, Inc. v. Henry B.

Byors & Son, Inc., 454 F. Supp. 203, 205 (D.N.H. 1978); Alaska

Helicopters, Inc. v. Whirl-Wide Helicopters, Inc., 406 F. Supp.

1008, 1011 (D. Alaska 1976). This approach is consonant with

the purposes of the Miller Act and the courts’ duty to construe

its terms liberally. See Trane, 406 F.2d at 283 (Kaufman, J.,

dissenting); General Elec., 383 F.2d at 138-39. To the extent

that the Miller Act seeks to protect contractors by establishing

strict deadlines, that objective "must take a back seat to the

purpose of the overall statute, which is to provide recovery to

suppliers who have provided materials but not received

compensation." Water Works, 131 F.3d at 34 (citing Noland Co.

v. Allied Contractors, Inc., 273 F.2d 917, 20-21 (4th Cir. 1959)

(interpreting § 270b(a)).

Moreover, our disposition is consistent with this

court’s interpretation of a related provision in the Miller Act,

section 270b(a), which establishes a ninety-day deadline for

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notice of claim on a payment bond.5 See id. In Water Works, the

defendant construction company argued that each order under an

open account represented a separate contract with an individual

ninety-day limit. See id. We rejected that contention, holding

that the notice period for all of the deliveries begins on the

date of the last delivery to the project. See id.

B. Attorney’s fees

As the Miller Act does not itself authorize the courts

to award attorney’s fees to a successful plaintiff, the matter

of fees is left to federal common law. See F.D. Rich, 417 U.S.

at 126- 27. The so-called "American Rule" of fees applies,

under which attorney’s fees "are not ordinarily recoverable in

the absence of a statute or enforceable contract providing

therefor." Fleischmann Distilling Corp. v. Maier Brewing Co.,

386 U.S. 714, 717 (1967). In accordance with the exception for

an enforceable contract, several circuits have upheld fee awards

in Miller Act cases where the relevant contract provided for

attorney’s fees. See, e.g., United States ex rel. Maddux Supply

Co. v. St. Paul Fire & Marine Ins. Co., 86 F.3d 332, 336 (4th

5The notice provision states, in relevant part, that “any
person having direct contractual relationship with a
subcontractor . . . 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 ...
furnished or supplied the last of the material for which such
claim is made . . .” 40 U.S.C. § 270b(a) (emphasis added).

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Cir. 1996); United States ex rel. Reed v. Callahan, 884 F.2d

1180, 1185 (9th Cir. 1989); United States ex rel. Southeastern

Mun. Supply Co., Inc. v. National Union Fire Ins. Co., 876 F.2d

92, 93 (11th Cir. 1989); United States ex rel. Carter Equip. Co.

v. H.R. Morgan, Inc., 554 F.2d 164, 166 (5th Cir. 1977); D & L

Constr. Co. v. Triangle Elec. Supply Co., 332 F.2d 1009, 1013

(8th Cir. 1964).

Here, the terms and conditions printed on the relevant

invoices contained a fee-shifting provision stating: "In the

event of non-payment, you agree to pay us reasonable attorney’s

fees and court costs, if any, incurred by us to collect payment

and interest charges." The district court has made clear that

it based its award solely on those sums owed to GE Supply, and

not those allegedly owed to GE Caribe. Following the other

courts that have enforced fee-shifting in Miller Act agreement

cases, we hold that the district court did not err in awarding

attorney’s fees to GE Supply under the Miller Act.

Affirmed.

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