City Electric v. Industrial Indemnity Co.

683 P.2d 1053, 1984 Utah LEXIS 813
CourtUtah Supreme Court
DecidedApril 19, 1984
Docket18610
StatusPublished
Cited by7 cases

This text of 683 P.2d 1053 (City Electric v. Industrial Indemnity Co.) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City Electric v. Industrial Indemnity Co., 683 P.2d 1053, 1984 Utah LEXIS 813 (Utah 1984).

Opinions

HALL, Chief Justice:

This is an action under the former public contractors’ bond statutes 1 in which plaintiff City Electric, a material supplier, seeks recovery against a general contractor and its surety2 for the bálance owing on materials and supplies alleged to have been furnished to a subcontractor.

On or about the 22nd day of August, 1979, defendant Valley Builders, Inc. (hereinafter “Valley”), a general contractor, entered into a contract with the North San-pete School District to construct a new elementary school building in Pairview, Utah. On that occasion, a performance bond was executed by defendants Valley and Industrial Indemnity Company in favor of the school district.3 On the following day, August 23,1979, Valley engaged as its electrical subcontractor a firm known as Alert Electrical Associates (hereinafter “Alert”). The contract between Alert and Valley provided that Alert would be paid a sum of $153,386 in monthly installments. [1055]*1055By the summer of 1980, all but $13,641.33 of this amount had been paid by Valley.

Alert obtained the electrical supplies necessary to complete the Fairview job from at least three suppliers, the principal of which appears to have been the plaintiff. Payments for the materials purchased from plaintiff were made by Alert until January or February of 1981. On or about February 27, 1981, plaintiff gave written notice to defendants Valley and Industrial Indemnity, as well as to Alert, of its claim for delinquent payments on the Alert account.4 Subsequently, in July, 1981, plaintiff contacted the president of Valley Builders, Arlo Jensen, and informed him that the Alert account was still delinquent and that the balance owing thereon was approximately $24,000. That conversation resulted in an agreement between Valley and the plaintiff whereby Valley would tender to plaintiff the balance of $13,614.33 owing on the electrical subcontract with Alert. This amount was to be tendered by check payable to the joint order of plaintiff and Alert. Endorsement of the check by both payees would constitute a waiver of all liens against the Fairview project. Furthermore, according to plaintiffs evidence regarding the agreement, negotiation of the check was to be contingent upon plaintiff’s securing a promissory note and security from Alert to cover the difference between the amount owing on the account and the amount of the check. The check (dated August 7, 1981) was tendered in accordance with the agreement, and there was no further communication between plaintiff and Mr. Jensen until summons was served upon Valley some four months later (on or about December 7, 1981).

Upon receiving the check from Valley, plaintiffs witness testified that contact was made with Alert’s principals, but plaintiff was unable to obtain the desired note and security agreement. Thus, plaintiff did not seek Alert’s endorsement on the check in order to negotiate the same, inasmuch as to do so would be to relinquish its only source of security, the bonded Fair-view project.

The instant action was commenced on November 23, 1981. At trial, plaintiff introduced two sets of invoices and sales slips against the Alert account totaling $65,251.09. The first set represented the materials that had been paid for, the total of which was some $43,885.89. The second or unpaid set totaled $21,365.20. Plaintiff also introduced into evidence the check for $13,641.33, which had been tendered to plaintiff pursuant to the aforementioned agreement between Valley and plaintiff. At the suggestion of the trial court, this check became the basis for a stipulation between the parties whereby Valley agreed to issue a new check payable solely to plaintiff in turn for the latter’s agreement to indemnify Valley against any claim Alert might have against it. Thus, the amount sought by plaintiff was effectively reduced to $7,723.87 5 or some twelve percent of the total value of the materials it claims to have furnished.

The trial court found that plaintiff failed to sustain the burden of proving that it furnished the materials for which it sought recovery and, further, that its action was not timely filed. The court granted judgments of no cause of action on plaintiff’s complaint and in favor of each of the defendants. In addition, it incorporated into the judgment the stipulation of the parties wherein plaintiff was to be awarded $13,-641.33 and defendant Valley Builders was to be indemnified against possible claims of Alert. The court declined to award attorney fees or costs to either party.

On appeal, plaintiff contends that (1) the trial court imposed an erroneous burden of proof in that it required plaintiff to show that the materials furnished to the Fair-view job were actually incorporated therein; (2) even assuming the trial court’s burden of proof were correct, the further re[1056]*1056quirement that delivery of the materials to the job site be proven was erroneous; (3) the court erred in holding that plaintiffs action was not timely; (4) the court’s alternative inconsistent findings of fact constitute an improper and capricious attempt to insure against reversal; and (5) the evidence does not support the court’s findings and conclusions.

Defendant Valley Builders cross-appeals for costs and attorney fees.

Plaintiff’s first three contentions relate to the provisions of former U.C.A., 1953, § 14-1-6, which provided in pertinent part:

Every claimant who has furnished labor or materials in the prosecution of the work provided for in such contract in respect of which a payment bond is furnished under this act ... shall have the right to sue on such payment bond .... [N]o such suit shall be commenced after the expiration of one year from the date on which the claimant ... furnished or supplied the last of the material for which such suit is brought _ [Emphasis added.]

We are first called upon to determine the burden of proof contemplated by the underscored provision of the foregoing statute, to wit: “furnished labor or materials in the prosecution of the work provided for in such contract.” The burden imposed by the trial court is set forth in its conclusions of law as follows:

The plaintiff had the burden of proof to show that the materials were not only furnished to the subcontractor, but that such materials were used in the job in question, and failing such proof cannot recover on the performance of material-man’s bond. [Emphasis added.] [Conclusions of Law #3.]

Plaintiff's version of the appropriate burden under the subject provision is that a claimant must prove only that the materials were “furnished” to the subcontractor in connection with a particular project, but not that the specific materials furnished were actually “used” or “incorporated” into the structure. This position rests primarily upon the decision of this Court in Mine & Smelter Supply Co. v. General Insurance Co. of America.6 There, a ma-terialman furnished electrical supplies to a subcontractor for use in the construction of a college administration building. The ma-terialman recovered judgment in the trial court against the surety pursuant to the terms of § 14-1-6. The surety appealed, claiming that the trial court erred in including in the judgment the cost of materials furnished that were used by the electrical subcontractor on other jobs.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Weese v. Davis County Commission
834 P.2d 1 (Utah Supreme Court, 1992)
State v. Menzies
845 P.2d 220 (Utah Supreme Court, 1992)
O'NEAL v. Division of Family Services
821 P.2d 1139 (Utah Supreme Court, 1991)
Buehner Block Co. v. UWC ASSOCIATES
752 P.2d 892 (Utah Supreme Court, 1988)
Harline v. Campbell
728 P.2d 980 (Utah Supreme Court, 1986)
City Electric v. Industrial Indemnity Co.
683 P.2d 1053 (Utah Supreme Court, 1984)

Cite This Page — Counsel Stack

Bluebook (online)
683 P.2d 1053, 1984 Utah LEXIS 813, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-electric-v-industrial-indemnity-co-utah-1984.