Wyandotte Electric Supply Co. v. Electrical Technology Systems, Inc.
499 Mich. 127
| Mich. | 2016Background
- KEO was the principal contractor on a Detroit Public Library renovation; Westfield issued the required payment bond; ETS was KEO’s electrical subcontractor and Wyandotte supplied materials to ETS as a sub‑subcontractor.
- Wyandotte had a longstanding open‑account agreement with ETS (2003) that included a 1.5% monthly time‑price differential (18% APR) and a 33% collection/attorney‑fees clause; Wyandotte also submitted a project quote repeating the time‑price differential.
- Wyandotte sent the statutorily required 30‑day and 90‑day notices by certified mail to KEO, Westfield, ETS, and the governmental unit; the 30‑day notice apparently never reached KEO though it was mailed; the 90‑day notice was received.
- ETS did not fully pay Wyandotte; Wyandotte sued KEO and Westfield under the Public Works Bond Act (PWBA), MCL 129.201 et seq.; trial court awarded unpaid balance, time‑price differential, attorney fees, and postjudgment interest under MCL 600.6013(7).
- The Court considered (1) whether actual receipt by the principal is required when statutory certified‑mail notice is used, (2) whether contract terms (time‑price differential and attorney fees) between supplier and subcontractor are recoverable on a PWBA bond claim, and (3) which statutory postjudgment interest provision applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether actual receipt by the principal contractor is required when the claimant complies with MCL 129.207 notice (certified mail) | Wyandotte: compliance with statute (certified mail within time) satisfies notice; no additional receipt requirement | KEO/Westfield: actual receipt by KEO is required; because KEO did not receive the 30‑day notice, Wyandotte lacks standing on the bond | Court: No actual‑receipt requirement when claimant complies with MCL 129.207; mailing by certified mail as prescribed satisfies service (Pi‑Con remains binding for noncompliant delivery methods) |
| Whether time‑price differential and contractual attorney fees owed by subcontractor are recoverable on the PWBA bond | Wyandotte: “sum justly due” is measured by claimant’s underlying contract(s), so contractually specified time‑price differential and attorney fees are recoverable | Defendants: bond/liability limited to price of labor/materials; no privity so defendants shouldn’t be liable for collateral contractual terms | Court: Time‑price differential recoverable as part of the sum justly due; attorney fees also recoverable here because they were part of the parties’ ongoing contract and reflected parties’ expectations (majority). Chief Justice Young and Justice Zahra would not allow attorney fees (dissent/partial concurrence) |
| Proper postjudgment interest statute: MCL 600.6013(7) (instrument rate) vs MCL 600.6013(8) (general rate) | Wyandotte: judgment body includes contractual rate; apply (7) to use contract rate | Defendants: judgment derives from statute (PWBA) so (7) does not apply; use (8) | Court: Judgment was rendered on the statutory PWBA claim, not on a written instrument; MCL 600.6013(7) does not apply; postjudgment interest must be calculated under MCL 600.6013(8) |
Key Cases Cited
- Pi‑Con, Inc. v. A J Anderson Constr. Co., 435 Mich. 375 (1990) (statutory certified‑mail rule for PWBA and Pi‑Con rule that non‑statutory method may suffice if actual receipt proved)
- Fleisher Eng'g & Constr. Co. v. United States ex rel. Hallenbeck, 311 U.S. 15 (1940) (Miller Act analysis that certified‑mail requirement was meant to assure receipt and to provide proof when receipt not shown)
- Price Bros. Co. v. Charles J. Rogers Constr. Co., 104 Mich. App. 369 (1981) (service/finance‑charge treated as integral part of contract price — relevant to recoverability of time‑price differential)
- Beck v. Park West Galleries, Inc., 499 Mich. 40 (2016) (treating related written instruments together to determine parties’ intent)
- United States ex rel. Maddux Supply Co. v. St. Paul Fire & Marine Ins. Co., 86 F.3d 332 (4th Cir. 1996) (Miller Act analog: circuits allow recovery of interest and attorney fees when they are part of subcontractor’s contract)