Alexander Construction Co. v. C & H Contracting, Inc.

354 N.W.2d 535, 1984 Minn. App. LEXIS 3531
CourtCourt of Appeals of Minnesota
DecidedSeptember 11, 1984
DocketCX-84-712
StatusPublished
Cited by7 cases

This text of 354 N.W.2d 535 (Alexander Construction Co. v. C & H Contracting, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alexander Construction Co. v. C & H Contracting, Inc., 354 N.W.2d 535, 1984 Minn. App. LEXIS 3531 (Mich. Ct. App. 1984).

Opinion

OPINION

PARKER, Judge.

This is a construction bond case. The appellants are the City of Maplewood (Ma-plewood), which initiated the construction project, and American Druggists’ Insurance Company (ADI), the insurer which furnished the public contractor’s bond for the project. The respondents are C & H Contracting, Inc. (C & H), the contractor, and Alexander Construction Co., Inc. (Alexander), a subcontractor. C & H defáulted on the project and did not pay Alexander for its work. Alexander, after filing notice of a bond claim, brought suit against C & H and appellants. The trial court granted summary judgment for Alexander. On appeal, appellants contend that Alexander did not timely file its notice of claim. They also challenge the award of attorneys’ fees and prejudgment interest. We affirm as modified.

FACTS

In May 1980 Maplewood awarded a public works contract to C & H for streets, storm and sanitary sewers, curbing, gutters and water mains on Cope Avenue. Pursuant to Minn.Stat. § 574.26 (1982), C & H furnished Maplewood a public contractor’s bond issued by ADI for $175,048.25, the amount of the contract.

C & H subcontracted with Alexander for some of the work on the project. Alexander completed its work in September 1980 but was not paid by C & H. Todd Young, Alexander’s attorney, called Maplewood officials five times between February and July 1981 to inquire if the project had been accepted. Each time he was informed that the city had not accepted it. Alexander filed notice of a bond claim in June 1981.

The trial court found that, as a matter of law, the project was completed and approved on October 15,. 1981, when the Ma-plewood City Council formally resolved to accept it, but postponed final payment until the legal aspects of C & H’s default could be resolved. Maplewood made final payment to C & H in April 1983.

Alexander initially sought $67,409.49 for its work; its January 5, 1984, summary judgment motion sought only $62,990.24. The summary judgment awarded Alexander that undisputed figure plus $5,000 in attorneys’ fees and prejudgment interest from the day the company filed its notice of bond claim.

ISSUES

1. Did the trial court err in finding that, as a matter of law, the Cope Avenue project was completed and accepted by Ma-plewood on October 15, 1981, and that, therefore, Alexander’s June 1981 notice of bond claim was timely filed?

2. Did the trial court err in awarding attorneys’ fees and prejudgment interest?

DISCUSSION

Summary judgment is appropriate if the pleadings, affidavits and other documents before the court clearly show there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Rule 56.03, Minn. R.Civ.P. The moving party has the burden of proof, and the court must resolve all doubts and factual inferences against the moving party. Nord v. Herreid, 305 N.W.2d 337, 339 (Minn.1981). One cannot successfully oppose a motion for summary *538 judgment by relying upon general, conclu-sory statements. The non-moving party must demonstrate that at the time the motion is made specific facts are in existence which create a genuine issue for trial. Erickson v. General United Life Insurance Co., 256 N.W.2d 255, 259 (Minn.1977).

I

Minn.Stat. § 574.31 (1982) provides:

No action shall be maintained on any such bond unless within 90 days after the completion of the contract and acceptance thereof by the proper public authorities, the claimant shall file a written notice * * * in the office of the auditor of the county letting the contract or the county in which such municipal corporation * * * is situate * * *.

Strict compliance with the notice requirement is a condition precedent to maintenance of an action against a surety on a contractor bond. Spetz & Berg, Inc. v. Balboa Insurance Co., 353 N.W.2d 233, at 235 (Minn.Ct.App.1984). However, the statute of limitations does not begin to run until there has been both completion and acceptance. Wheeler Lumber Bridge & Supply Co. v. Seaboard Surety Co., 218 Minn. 443, 447, 16 N.W.2d 519, 521 (1944). Therefore, the date of the later of the two is critical in this case.

Appellants contend that the affidavits of City Engineer Kenneth Haider and City Manager Barry Evans create a fact question as to when the work was accepted. Both affidavits state that all work on the project was completed and in use by January 1981. In addition, Haider’s affidavit states “that it is your affiant’s opinion that the project was completed and accepted as of January, 1981 despite no formal resolution being passed by the City of Maplewood due to the fact that no application was made by C & H for final payments.”

Deposition testimony by both Haider and Evans suggests that the project was not completed until after January 1981. However, even if we accept January 1981 as the completion date, the affidavits do not raise a material issue of fact. Neither affidavit offers any evidence to show the trial court erred in finding that the project was not formally accepted until October 15, 1981. They merely suggest that completion and use should be equated with acceptance.

It is true that acceptance may be expressed by words or conduct. Guaranteed Gravel & Sand Co. v. Aetna Casualty & Surety Co., 174 Minn. 366, 371, 219 N.W. 546, 548 (1928). However, that conduct must be sufficient to fix the time of acceptance with certainty:

Because of the extensive scope of the department’s activities, it seems highly desirable that the time of acceptance should be made certain and readily available to those who have performed labor or furnished material on the job. The performance of a highway contract may, and frequently does, involve extensive areas and require many months for completion. Where and to what office or officer must a claimant go to ascertain when the statutory period of limitation has begun?

Wheeler Lumber Bridge & Supply Co. v. Seaboard Surety Co., 218 Minn, at 447-48, 16 N.W.2d at 521 (1944) (emphasis in original).

Common sense mandates that claimants must be able to determine the time of acceptance with certainty so they will know when to file notice. To require Alexander to police the project constantly to determine the exact moment it was first used (including the storm and sewer drains) would be unreasonable and unworkable.

Alexander’s notice of claim was filed before Maplewood formally resolved to accept the Cope Avenue project on October 15, 1981. Therefore, the notice was timely.

II

Appellants also challenge the trial court’s award of attorneys’ fees and prejudgment interest. Minn.Stat.

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Bluebook (online)
354 N.W.2d 535, 1984 Minn. App. LEXIS 3531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alexander-construction-co-v-c-h-contracting-inc-minnctapp-1984.