United States ex rel. Wellman Engineering Co. v. MSI Corp.
United States ex rel. Wellman Engineering Co. v. MSI Corp.
Opinion of the Court
The United States District Court for the Western District of New York, John 0. Henderson, Judge, entered judgment on a Miller Act (40 U.S.C. §§ 270a, 270b) bond in favor of use-plaintiff Wellman Engineering Company, and the obligor and surety on the bond appeal. Affirmed.
Appellants MSI Corporation and Fullerton Construction Co., as a joint venture known as Zarpas-Fullerton Joint Venture (Zarpas), were successful bidders on a government project for construction of a Bomarc missile site near Niagara, New York. Appellant Aetna Casualty & Surety Company is surety on Zarpas’ Miller Act bond on the contract.
Appellee, Wellman Engineering Company, contracted to furnish the Seneca Industrial Machine Corporation with certain hydraulic actuator and latch mechanisms needed by Seneca as part of a hydraulic system for opening and closing massive missile launcher roofs to be installed at a missile site then under construction by Zarpas, the general contractor for the Government project. Zarpas entered into a contract with Seneca entitled “Subcontract for Supply” whereunder Seneca was to manufacture and supply at the job-site the hydraulic system for opening and closing the roofs in accordance with contract specifications, sections 52 and 53 of the prime contract, including a designated change order, at a price of $85,000. Seneca did not have contractual responsibility for nor did it have anything to do with the installation of the system.
After Wellman had furnished all the mechanisms in accordance with the contract specifications, Seneca defaulted on its contract with Wellman and Well-man sought recourse against Zarpas. Timely notice of non-payment was given to Zarpas in accordance with the provisions of the Miller Act, and when Zarpas and its surety, the appellant Aetna Casualty & Surety Company refused payment, Wellman instituted this suit. The District Court, in finding for Wellman, held that Seneca was a subcontractor and that simply because Seneca did not perform any work on the job-site did not mean, as the court interpreted the Supreme Court decision in MacEvoy v. United States, 322 U.S. 102, 64 S.Ct. 890, 88 L.Ed. 1163 (1944), that Seneca must be considered a materialman. One who supplies material to a materialman is not protected by the Act. Considering the degree of responsibility assumed under Seneca’s contract, the type of work involved, the type of payment, and the nature and form of the agreement between the parties, the court concluded that Seneca was a subcontractor and not a materialman and that Wellman was therefore entitled to relief under the Miller Act.
We think that the court was correct in looking at the total picture here. It has been held, properly, we believe, that MacEvoy does not confine the resolution of the issue to expert opinion in the trade. United States for the Use and Benefit of Gulfport, etc. v. Monaco & Sons, 222 F.Supp. 175 (D.Md. 1963), reversed on other grounds 336 F.2d 636 (4 Cir. 1964). While some courts have limited the definition of subcontractors under the Act to on-site performers, others have not, and we would not so narrowly read MacEvoy. See Basich Bros. Construction Co. et al. v. United States for the Use of Turner et al., 159 F.2d 182 (9 Cir. 1946). The Miller Act was substituted for the Heard Act to provide' a separate payment bond on government contracts for the protection of subcontractors and materialmen in response to complaints of undue delay in collecting on the single bond for performance and payment provided for by the Heard Act, caused by the priority given to the government rights under the performance provisions of the bond. The Congressional Committee reports did not specify that protection was confined to those working on the job-site, but indicated that the protection was not, however, to extend to an endless chain of suppliers. “A sub-subcontractor may avail himself of the protection of the bond by giving written notice to the contractor, but that
The judgment is affirmed.
Reference
- Full Case Name
- UNITED STATES of America for the Use of WELLMAN ENGINEERING COMPANY v. MSI CORPORATION and Fullerton Construction Co., Comprising a joint venture known as Zarpas-Fullerton Joint Venture, and Aetna Casualty & Surety Company
- Cited By
- 11 cases
- Status
- Published