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Western Surety Co. v. Hudson Insurance Co.

United States District Court, D. New Jersey

April 10, 2017

WESTERN SURETY COMPANY, Plaintiff,
v.
HUDSON INSURANCE COMPANY, et al., Defendants.

          OPINION

          WILLIAM J. MARTINI, U.S.D.J.

         Plaintiff Western Surety Company, as assignee of N-Powell, brings this action pursuant to the Miller Act, 40 U.S.C. §§ 3131-34, against Defendants Hudson Insurance Company and M.E.R.I.T., Inc. Plaintiff alleges, inter alia, that Defendants owe Plaintiff an unpaid sum of $232, 359.06, plus interest, under the Miller Act. The Miller Act allows subcontractors who have “furnished labor or material” to a federal construction project to bring suit to recover any unpaid amounts owed to them. 40 U.S.C. § 3133(b)(1). A Miller Act claim must be brought “no later than one year after the day on which the last of the labor was performed or material was supplied.” 40 U.S.C. § 3133(b)(4).

         Defendant M.E.R.I.T. now moves for partial summary judgment on Plaintiff's Miller Act claim, asserting that Plaintiff's claim is time-barred because it was filed outside of the Miller Act's one-year statute of limitations. Plaintiff opposes the motion. For the reasons set forth below, Defendant's motion for partial summary judgment is DENIED.

         I. BACKGROUND

         The Parties

         N-Powell is a commercial construction contractor that performs construction work on public and private construction projects. Named Plaintiff Western Surety Co. is the contract surety for N-Powell, and the assignee of N-Powell's claims against Defendants.[1]

         Non-Moving Defendant Hudson Insurance Company is the payment bond surety for Defendant M.E.R.I.T. Moving Defendant M.E.R.I.T. (hereinafter “Defendant”) is a commercial construction contractor who was awarded a contract by the United States Army Corps of Engineers (“USACE”), and subsequently entered into a subcontract agreement with Plaintiff for labor and materials for that project.

         Relevant Factual Background

         The following facts are undisputed unless otherwise noted.

         In April 2014, Defendant was awarded a contract by the USACE for the maintenance dredging of Shoal Harbor and Compton Creek in Belford Township, New Jersey (hereinafter, “the Project”). ECF No. 30 (Am. Compl.) ¶ 13.

         Defendant entered into a subcontract with Plaintiff in which Plaintiff agreed to provide a portion of the labor and materials for the Project. ECF No. 37, Ex. A (Subcontract). Under the subcontract, Plaintiff was to perform all work identified in a work proposal Plaintiff had submitted to Defendant, and all work “as per Contract W912DS-14-C-0013.” Id. The time of performance was also “as per Contract W912-DS-14-C-0013.” Id. Plaintiffs Proposal included base bid work, option work, and providing miscellaneous supplies. ECF No. 37, Ex. B. The Project was initially set to conclude sometime in 2014; however, due to several delays in work and additional option work and change orders agreed upon by both parties, the project end date was repeatedly extended. See, e.g.., ECF No. 37., Ex. D, pp. 36 (January 2015 change order), 40-43 (April 2015 revised option work) 62-66 (Extra work letters). On March 29, 2016, Plaintiff submitted a “proof of claim” for payment under the surety payment bond to Defendant, identifying June 25, 2015, as the last day labor was performed under the subcontract. Id. pp. 2-4.

         The parties' key point of dispute is when Plaintiffs last day of work occurred for purposes of the statute of limitations under the Miller Act. The present action was filed on June 22, 2016, so Plaintiffs last day of work must have been on or after June 22, 2015 in order for the action to be timely.

         Defendant asserts that Plaintiffs last day of work was no later than June 12, 2015. ECF No. 37-2 (Def SOF) ¶¶ 5-6. In support of this contention, Defendant provides, inter alia, the following evidence:

• A Certified Payroll Report, signed and certified by Plaintiffs Payroll Administrator, showing work billed through June 12, 2015, and marked with a handwritten ...

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