Mavis Mechanical v. Hanover Insurance Co

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
THE UNITED STATES OF AMERICA FOR
THE USE OF MAVIS MECHANICAL
SERVICES, INCORPORATED,
Plaintiff-Appellant,
v.
THE HANOVER INSURANCE COMPANY,
Defendant-Appellee.
No. 98-1946
and
SIEGURD W. MONROE, trading as S.
W. Monroe Construction Company;
S. W. MONROE CONSTRUCTION
COMPANY,
Defendants,
LINDA J. MONROE,
Third Party Defendant.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Marvin J. Garbis, District Judge.
(CA-97-1469-MJG)
Argued: March 2, 1999
Decided: July 6, 1999
Before ERVIN, Circuit Judge, VOORHEES, United States District
Judge for the Western District of North Carolina, sitting by
designation, and FABER, United States District Judge for the
Southern District of West Virginia, sitting by designation.
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Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: John B. Stolarz, Baltimore, Maryland, for Appellant.
Francis Joseph Nealon, BALLARD, SPAHR, ANDREWS & INGER-
SOLL, L.L.P., Washington, D.C., for Appellee. ON BRIEF: Eric C.
Lund, BALLARD, SPAHR, ANDREWS & INGERSOLL, L.L.P.,
Washington, D.C., for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Appellant Mavis Mechanical Services, Inc. ("Mavis"), a subcon-
tractor on a federal construction project, brought a Miller Act claim
for payment against appellee Hanover Insurance Company
("Hanover"), the issuer of a performance bond for the project. See 40
U.S.C.A. § 270a-d (West 1986 & Supp. 1999). The Miller Act man-
dates that general contractors awarded federal construction projects
execute performance bonds for the protection of their subcontractors.
See § 270a(a). Claims against these bonds are subject to a strict stat-
ute of limitations: the Miller Act requires that a claim must be filed
within one year of the date that a subcontractor last supplied labor or
material to the project. See § 270b(b). Following a bench trial, the
district court ruled that Mavis' claim was time-barred under the stat-
ute; after considering the parties' briefs and oral arguments, we
affirm.
I.
In 1992 the federal government contracted with Siegurd W. Mon-
roe, doing business as S. W. Monroe Construction Company
2
("Monroe"), to replace sprinkler, fire loop, and storm lines at the
Washington National Records Center ("Records Center") in Suitland,
Maryland. The General Services Administration ("GSA") adminis-
tered the contract on behalf of the government. Pursuant to the
requirements of the Miller Act, which covers contracts for the con-
struction or alteration of federal public buildings, Monroe obtained a
payment bond for the protection of his subcontractors. See 40
U.S.C.A. § 270a(a). Monroe subsequently entered into a subcontract
with Mavis for the performance of mechanical work at the Records
Center.
The Records Center project was plagued by numerous delays occa-
sioned when Monroe failed to submit paperwork promptly and fell
short of construction timetables. Monroe also failed to pay its subcon-
tractors on a timely basis. Dissatisfied with the general contractor's
performance, in December of 1996 the GSA terminated its contract
with Monroe.
As of November 1995, Mavis had performed substantially all of its
obligations under the subcontract with Monroe. The single task
remaining was for Mavis to install a "siamese" valve in the water line
to permit the fire department water access in the event of an emer-
gency.
Mavis did not complete this final task. Months later, in March of
1996, Mavis wrote to Monroe complaining of overdue payments and
demanding that Monroe pay all outstanding invoices if the contractor
wished for Mavis to install the siamese valve. Monroe did not
respond. On March 12, 1996, Mavis wrote to Hanover, asserting a
claim for payment of past due invoices and advising the insurer of
Mavis' intent to file suit under the Miller Act to recover against the
performance bond.
Hanover replied with a May 14, 1996, letter requesting that Mavis
document the timeliness of its Miller Act claim by supplying the
insurer with records indicating when labor or materials were last sup-
plied to the project. Mavis did not do so; nor did the subcontractor file
its threatened lawsuit. Not until March of 1997 did Mavis reply to
Hanover by once again requesting payment of Monroe's past due
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accounts. Attached to this letter was a single requisition for the
amount of $20,904.
Hanover responded to this second letter by again requesting that
Mavis document the last day that it supplied labor or materials to the
Records Center project. Mavis did not produce the requested docu-
mentation; instead, on May 1, 1997, the subcontractor filed suit
against Hanover and Monroe, alleging a right to payment under the
Miller Act.
To establish the jurisdictional basis for a Miller Act claim, Mavis
alleged in its complaint that one year had not expired since the date
it last supplied labor to the Record Center project. At trial Mavis
argued that it performed labor within the statutory period on two sep-
arate occasions in 1996: first, when the subcontractor attended a GSA
project planning meeting on October 21st; and second, when John
Mavis, the company's vice president, visited the jobsite on November
4th with another Mavis employee and made a brief, unsuccessful
attempt to install the siamese valve.
At the close of the evidence, the district court entered a default
judgment against Monroe because the contractor had failed to appear
and defend the lawsuit. The court awarded Mavis the amount of all
its unpaid invoices, with the exception of the $125 that Mavis billed
for its alleged site visit of November 4th, 1995. The district court also
entered judgment for Hanover, holding that Mavis' claim against the
insurer's payment bond was time-barred under the Miller Act.1 Mavis
appeals this latter ruling.
II.
We review the district court's conclusions of law de novo. See
United States v. St. Paul Fire & Marine Ins. Co., 86 F.3d 332, 334
(4th Cir. 1996). We will reverse the court's factual findings only upon
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1 Prior to trial the district court denied Mavis' motion for leave to
amend its claim to allege additional "delay" damages. Because we affirm
the ruling on liability, we need not reach Mavis' claim, argued on appeal,
that the Miller Act permits a subcontractor to recover damages other than
those strictly attributable to the costs of labor and materials.
4
evidence of clear error. See id. A finding of fact is clearly erroneous
if the reviewing court "on the entire evidence is left with a definite
and firm conviction that a mistake has been committed." See United
States v. United States Gypsum Co., 333 U.S. 364, 395 (1948).
The Miller Act grants any person who has "furnished labor or
materials in the prosecution of the work provided for [in a federal
construction contract]", 40 U.S.C.A. § 270b(a), the right to sue the
issuer of the payment bond, provided that "no such suit shall be com-
menced after the expiration of one year after the day on which the last
of the labor was performed or material supplied by[the subcontrac-
tor]," 40 U.S.C.A. § 270b(b).
The district court concluded that Mavis' attendance at the October
21st meeting did not constitute labor for the purpose of computing the
Miller Act's statute of limitations. As an initial matter, the court noted
that the subcontract did not require Mavis to attend this type of "proj-
ect coordination" meeting. Equally significant in the court's view was
the fact that by the date of the meeting, Mavis had essentially com-
pleted its work on the Records Center project, and thus had no efforts
left to coordinate with other subcontractors.2
Finding no legal or factual errors, we will not disturb the district
court's ruling that for Mavis, the October 21st meeting was merely an
overhead expense insufficient to constitute labor within the meaning
of the Miller Act. See General Ins. Co. of Am. v. The United States
of America for the Use of Audley Moore & Son, 409 F.2d 1326, 1327
(5th Cir. 1969) ("Labor furnished in the prosecution of the work is not
co-terminus with the outer limits of all duties provided by the con-
tract.").
With respect to Mavis' November 4th, 1996, attempt to install the
siamese valve, the district court found that the subcontractor failed to
prove by a preponderance of the evidence that it had actually fur-
nished labor on this occasion. The court weighed Mr. Mavis' uncor-
roborated account of the site visit against the following facts: (1)
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2 The court found that Mavis' one remaining contractual obligation, the
installation of the siamese valve, involved only a trivial amount of labor
and constituted less than 0.5% of the value of the contract.
5
Mavis had previously refused in writing to install the valve without
payment of past due accounts; (2) Mavis submitted no contemporane-
ous records or bills for the attempted installation; (3) Mavis purport-
edly failed to install the valve because Mr. Mavis, an experienced
contractor, neglected to bring the correct tools for the job; and (4)
Mavis never returned to the site to complete what he admitted was a
very simple task.
After our review of the record, we cannot say that the district court
clearly erred in concluding that Mavis did not attempt to install the
siamese valve. Because we affirm this factual finding, we need not
consider whether, as a matter of law, Mavis' brief attempt to install
the valve would establish the jurisdictional basis for a Miller Act
claim, although we express doubt that this is so.
III.
For the aforementioned reasons, the judgment of the district court
is affirmed.
AFFIRMED
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