Dover & Co. v. United Pacific Insurance

197 N.W.2d 126, 38 Mich. App. 727, 1972 Mich. App. LEXIS 1707

• Court: Michigan Court of Appeals
• Decided: February 25, 1972
• Docket: Docket 11632
• Status: Published

Opinions

R. B. Burns, P. J.

Plaintiff, a subcontractor, agreed to furnish labor and materials to the principal contractor in completing a construction contract with the State Highway Department. In accordance with state law the principal contractor obtained a surety bond from the defendant.¹

Plaintiff brought this suit against defendant-surety to recover the unpaid balance on the contract between plaintiff and its defaulting principal contractor. One of the controversies at the trial level concerned the effect of plaintiff’s failure to serve notice upon the State Highway Department within a statutorily-required 60-day period.

MCLA § 570.102 (Stat Ann 1970 Eev § 26.322) provides:

“In the case of a subcontractor, he shall within 60 days after furnishing the last material or supplies or performing the last work covered by his subcontract, serve a written notice in duplicate upon the board of officers or agents contracting on behalf of the state * * * , that he is a subcontractor for the doing of some part of such work * * * and that he relies upon the security of the bond by this act required to be given by the principal contractor, and the said board of officers or agents shall within 10 days thereafter furnish a copy of such notice to the sureties for the principal contractor.”

Nevertheless plaintiff’s motion for summary judgment was granted on the following grounds set out by the trial judge:

“Defendant, a paid surety had timely notice of plaintiff’s claim and * * * defendant would suffer no injury or damage if held liable to the plaintiff because of the fact that the State of Michigan has retained funds under the prime contract with the Trapp Construction Company [the principal contractor] which would indemnify the defendant from any injury or loss.” (Emphasis supplied.)

Plaintiff’s evidence as to timely notice consisted of two letters. A letter dated August 23,1970 from plaintiff to defendant recited that in August of 1969 plaintiff had last given materials and or services on the contract. The second letter, dated November 20, 1969, and from the State Highway Department, notified plaintiff that it had received plaintiff’s claim and had forwarded a copy to the defendant.

The Court in People, for use of Wheeling Corrugating Co v W L Thon Co, 307 Mich 273, 277 (1943) made compliance with the statutory notice provision “a condition precedent to recovery on the bond”.

Reversed and remanded for entry of judgment in accordance with this opinion.

T. M. Burns, J., concurred.

1 MCLA § 570.101 (Stat Ann 1970 Eev § 26.321).