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UNITED STATES EX REL. B. KATCHEN IRON WORKS v. STA

January 31, 1958

UNITED STATES of America, For the Use and on Behalf of B. KATCHEN IRON WORKS, Inc., a New Jersey corporation, Plaintiff,
v.
STANDARD ACCIDENT INSURANCE COMPANY and Daniel J. Cronin, Inc., Defendants



The opinion of the court was delivered by: WORTENDYKE

This action was instituted against Standard Accident Insurance Company under the Miller Act, 40 U.S.C.A. 270a-270e. Plaintiff (Katchen) was a subcontractor with Daniel J. Cronin, Inc. (Cronin) for the construction of a Naval Air Turbine Test Station under a general contract with the United States of America, Departmenr of the Navy, Bureau of Yards and Docks. In compliance with 270a(2) of Title 40, Cronin, as principal, and Standard Accident Insurance Co. (Standard), as surety, entered into a payment bond to the United States of America, dated December 12, 1952, conditioned as in said subsection required.

Plaintiff's original complaint sought recovery from Standard, upon the payment bond, of the amount of $ 2,165.86 for extras, and $ 23,601.79 alleged to represent a balance due from Cronin under its contract with Katchen. That complaint was filed on November 15, 1956. Upon leave duly granted by the Court, an amended complaint was filed in this action, joining Cronin as a defendant with Standard, and praying judgment against both defendants for $ 23,601.79, which Katchen claims is the balance due to it from Cronin upon the subcontract between those parties. In this amended complaint Katchen pleads that 'less than one year has expired since the date of the final settlement' of Cronin's contract with the United States, and, with respect to this allegation, Standard answered that it neither admitted nor denied the same but put Katchen to its proof thereof. Cronin also answered the amended complaint and interposed a counterclaim against Katchen for damages for failure to perform the contract between Katchen and Cronin. In its 'Reply' Katchen has joined issue upon the allegations of Cronin's counterclaim.

 At a pretrial conference held in this case on November 20, 1957, counsel for Standard expressed his client's position as follows:

 Leave was accordingly granted to Standard to amend its answer by pleading the foregoing contention affirmatively. At the same conference, counsel for Katchen took the position that if 270b of Title 40 is construed to mean that the one-year limitation therein prescribed commenced to run from the time actually fixed by the Comptroller General as final settlement date on the prime contract (regardless of actual date of the completion), the section would be unconstitutional. The Court therefore directed Katchen to raise this question of constitutionality in the form of an amended reply and granted leave to Standard to address a motion to the affirmative defenses presented by such a pleading for the purpose of testing their sufficiency.

 Such an amended reply was accordingly filed. Katchen alleged therein that the one-year period prescribed by Section 270b 'commenced to run from the date on which the United States Comptroller General actually fixed the 'final settlement' date, regardless of the date fixed. The Comptroller General fixed the date on February 18th, 1957. The 'final settlement' date thereby fixed was June 14, 1955. Plaintiff commenced this action November 16, 1956, and was, therefore, in time.' Katchen further pleaded that if the one-year period did not commence to run from February 18, 1957, then Katchen had a reasonable time from that date within which to institute this action 'inasmuch as, on February 18, 1957, which was the fixing date, more than one year had already elapsed from the date of 'final settlement' fixed.' Katchen further contended in the pleading referred to that if 270b is construed as prohibiting commencement of an action against the surety more than one year after the date of 'final settlement' regardless of the date upon which the date of final settlement was determined, that section, together with 270c, which authorizes the Comptroller General to fix the date of final settlement and renders his determination thereof conclusive, would be unconstitutional.

 Standard, upon due notice, has moved to strike the defenses set forth in Katchen's said amended reply and for judgment of dismissal of Katchen's amended complaint insofar as Standard is concerned. These motions rely upon a copy of an undated Certificate, under the letterhead of the United States General Accounting Office, Office of the General Counsel, which reads as follows:

 'To Whom It May Concern:

 'Having been specially designated to make such certificate pursuant to section 311(e) of the act of June 10, 1921, 42 Stat. 20, I hearby certify, in accordance with section 3 of the act of August 24, 1935, 49 Stat. 793, that final settlement under contract No. NOY-73193, Specification No. 34372, dated December 12, 1952, between the United States, represented by the contracting officer, and the contractor, Daniel J. Cronin, Inc., was made June 14, 1955.

 '(Signed) R. E. Ramsey Associate General Counsel.'

 The quoted document bears, in respective different locations thereon, the stamped dates 'July 118 1957' and 'October 16, 1957.'

 In opposition to the foregoing motion, Katchen's attorney, Irving Mandelbaum, has filed his own affidavit and what purports to be an affidavit of W. W. Gentry, Lt., C.E.C., U.S.N., Resident Officer in Charge of Construction, apparently sworn to March 12, 1956. The affidavit of this attorney sets forth a copy of a letter dated December 11, 1957, to deponent from R. E. Ramsey, Associate General Counsel in the United States General Accounting Office, which states that the certificate of final settlement previously furnished by the Comptroller General was dated February 18, 1957, "evidencing on its face the time of our determination." The Gentry affidavit contains what purports to be a copy of Lt. Gentry's letter of January 18, 1956, to Katchen and concludes 'that on February 9th, 1956 I wrote to Daniel J. Cronin, Inc. advising it that the job had been completed and accepted and requesting that it submit a final invoice.' From this affidavit it appears that the deponent was Resident Officer in Charge of Construction at the Cronin job here in question, and, in the copy of his letter to Katchen incorporated in the affidavit, he advised that: "All contract work has been completed and accepted, with the exception of the aluminum drip flashing still required on doors numbered 31 through 34 as detailed on Yards and Docks Drawing Number 517825. Since this is a very minor item, it will probably be completed soon, at which time the Resident Officer in Charge of Construction will accept all work and initiate closing the contract."

 The present motion is, in effect, one for summary judgment under Rule 56(b) of the Rules of Civil Procedure, 28 U.S.C.A., or for judgment on the pleadings, or to strike pursuant to subdivision (c) or (f) of Rule 12.

 It is apparently the rule in this Circuit that, on a motion to dismiss, the pleading attacked 'must be viewed in the light most favorable to the' pleader and that the pleading 'should not be dismissed unless it appears to a certainty' that the pleader 'would not be entitled to relief under any state of the facts which could be proved in support of his claim; further, no matter how likely it may seem that the pleader will be unable to prove his case, he is entitled, upon averring a claim, to an opportunity to try to prove it.' Frederick Hart & Co. Inc. v. Recordgraph Corp., 3 Cir., 1948, 169 F.2d 580, 581. The same decision is ...


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