A&C CONSTRUCTION & INSTALLATION, CO. WLL, Plаintiff-Appellant, v. ZURICH AMERICAN INSURANCE COMPANY and THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Defendants-Appellees.
No. 19-3325
United States Court of Appeals For the Seventh Circuit
ARGUED MAY 26, 2020 — DECIDED JUNE 30, 2020
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 17-cv-04307 — Harry D. Leinenweber, Judge.
Before FLAUM, SCUDDER, and ST. EVE, Circuit Judges.
I. Background
This dispute arises from a federal construction project with the United States Army Corps of Engineers for the construction of two billets on the Al Udeid Air Base in Qatar. Thе Miller Act provides that on any contract of more than $100,000 for “the construction, alteration, or repair of any public building or public work of the Federal Government” the contractor must supply “[a] payment bond with a surety satisfactory to the officer for the protection of all persons supplying labor and material in carrying out the work provided for in the contract for the use of each person.”
Amec Foster Wheeler awarded certаin work on the project to a subcontractor, Black Cat Engineering & Construction WLL—first mechanical work and later additional fire suppression work. Black Cat,
A&C later subcontracted some of the ductwork under the MEP Agreement to Raymond Nahra for Electrical & Mechanical Works Co., W.L.L. (“RNC“). Thus, on the project, RNC was a third-tier subcontractor. From all accounts, RNC performed work on the project through the project‘s completion date in February 2017.
The relationship between Black Cat and A&C eventually deteriorated. On December 16, 2015, Black Cat terminated A&C from the Fire Suppression Agreement. The sureties contend thаt A&C had already stopped most of its work related to the MEP Agreement in November 2015 and that A&C last performed any work on the project on May 16, 2016. A&C disputes this characterization, primarily as it relates to the date it last performed any work on the project. Specifically, A&C insists that, despite the termination, it continued to provide labor and equipment after that date because its equipment remained on the site for Black Cat‘s use, and it continued to provide supervision of one of its subcontractors (RNC) through the project‘s completion on February 28, 2017. Accordingly, A&C assеrts that the date it last performed labor or supplied material for the project was February 28, 2017.
It is undisputed, however, that A&C provided its notice under the Miller Act on August 16, 2016. That notice claimed that Black Cat owed A&C $8,449,710 for “Mechanical, Electrical and Plumbing and Fire Suppression works.” As to the “[d]аte on which the last of the labor, services, equipment or materials were furnished,” A&C stated that “[c]ertain A&C equipment remains onsite.”
A&C filed its complaint on June 7, 2017, alleging a single Miller Act claim against the sureties for payment on the bond in the amount of $8,637,423. After discovery, the sureties moved for summary judgment, arguing that A&C‘s last day of work was—at the latest—May 16, 2016. The notice date, August 16, 2016, is ninety-one days after May 16, 2016, and outside of the mandatory ninety-day notice period. A&C also did not file suit until June 7, 2017, more than one year after the sureties allege A&C last provided labor or material on the project. A&C disputed the May 16, 2016, date and instead argued that it leased equipmеnt to Black Cat that was utilized on the project up until its conclusion on February 28, 2017, and its subcontractor RNC also continued to provide labor until the completion date. Thus, A&C countered, it filed the lawsuit within one year of that date. Further, as to the fact that its Miller Act notice was served far more than ninety days before its alleged last day of work, A&C simply argued that it “provided too much notice” and there was nothing that barred it from providing the notice earlier than required.
The district court granted the sureties’ motion for summary judgment. The court found that even if A&C was able to use leаsed equipment to Black Cat as its claimed last day of work performed as a legal matter, the argument still failed because
Based on some admitted misstatements in the district court‘s opinion, A&C filed a post-judgment motion pursuant to
Nevertheless, A&C seized on these mistakes and argued for the first time that, according to the district court‘s own reasoning, “if A&C is not entitled to recover for work performed after the date of its notice (as the Court has held), then the last datе of recoverable work was on August 16, 2016, the date of the notice.” A&C now contended that it served its Miller Act notice “contemporaneous[ly] with work performed by A&C (in the form of, at the least, leasing equipment),” and, because its complaint “was filed within one year of that date,” it was “not barred from seeking payment for its pre-notice work.” The district court denied A&C‘s Rule 59(e) motion, “apologi[zing] for the sloppy proof reading” but “not[ing] that it cited and applied the correct standard” throughout the opinion. Despite the few misstаtements, the court found that it committed no manifest error of fact or law.
A&C now appeals from the district court‘s summary judgment ruling.
II. Discussion
This appeal presents a seemingly straightforward question—whether A&C‘s notice and civil action were timely under the Miller Act. The parties, howеver, dispute the correct date of the last work performed, which is the relevant triggering event from which the time periods run. We review the district court‘s summary judgment ruling de novo and consider facts and draw inferences in the light most favorable to the nonmoving party. Hall v. City of Chicago, 953 F.3d 945, 950 (7th Cir. 2020). Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Section 3133 of the Miller Act governs the right to bring a civil action on a payment bond, and provides two express timing requirements. First, a sub-subcоntractor must give “written notice to the contractor within 90 days from the date on which the person did or performed the last of the labor or furnished or supplied the last of the material for which the claim is made.”
Before we can decide the timeliness of A&C‘s notice and lawsuit, we must confront a threshold question regarding waiver. At summary judgment, A&C opposed the sureties’ motion on the basis that (1) its August 16, 2016 notice was timely because it provided “too much notice,” being served earlier than the claimed last date of work, February 28, 2017; (2) its lawsuit was timely filed оn June 7, 2017, because it was filed within one year of the claimed last date of work, February 28, 2017; and, therefore, (3) it was entitled to recover for all work performed through its claimed last day of work, February 28, 2017. In its post-judgment motion, A&C‘s position shifted to argue that: (1) its August 16, 2016 notice was timely fоr work performed on or before that date; (2) its lawsuit was timely filed within one year of the notice; and, therefore, (3) it was entitled to recover for its pre-notice work, or through August 16, 2016. Now on appeal, A&C continues to press its theory of partial recovery fоr pre-notice work only. That argument was not properly presented to the district court and, as a consequence, A&C has waived it.
The purpose of
A&C‘s attempt to characterize this argument as merely “narrow[ing] the issues on appeal” does not save the day. Though A&C nominally maintains the same claimed last day of work of February 28, 2017, A&C did not—before the district court entered judgment—discuss the pre-notice period as a separate recoverable period or its entitlement thereto. There was no mention of this pre-notice, рartial recovery theory in A&C‘s summary judgment briefing, and all of its allegations both before and during summary judgment related to full recovery for work performed through the project‘s completion in February 2017. It was not until after the district court issued its summary judgment opinion that A&C grabbed hold of сertain (erroneous) language and unveiled its new partial recovery theory, arguing that by the court‘s own reasoning it was now entitled to recover for its pre-notice work. Far from simply narrowing issues to present for appellate review, this
With the scope of our review settled, we turn to the quеstion properly before us. Though a factual dispute still exists regarding A&C‘s last day of work—the sureties assert May 16, 2016, and A&C claims February 28, 2017—we need not resolve that issue to decide the appeal. As the district court did, we will assume that the date A&C last performed work for purposes of its Miller Act claim is February 28, 2017. There is no dispute, however, that A&C served its Miller Act notice on August 16, 2016. As one of the strict preconditions to the right to bring a civil action on the payment bond, a sub-subcontractor must give “written notice to the contractor within 90 days from the dаte on which the person did or performed the last of the labor or furnished or supplied the last of the material for which the claim is made.”
III. Conclusion
The Miller Act aims to protect subcontractors on federal construction projects against nonpayment, but nonetheless demands strict сompliance with certain conditions precedent to the right to recover. Having waived its partial recovery argument for pre-notice work only, we are left with a straightforward question of whether A&C provided its required Miller Act notice within ninety days of the date it claimed for its last day of recoverable work. A&C did not and therefore cannot sue on the payment bond. The judgment of the district court is
AFFIRMED.