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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