Hartford Fire Insurance v. Trustees of the Construction Industry

208 P.3d 884, 125 Nev. 149, 125 Nev. Adv. Rep. 16, 2009 Nev. LEXIS 29
CourtNevada Supreme Court
DecidedMay 28, 2009
Docket49059
StatusPublished
Cited by6 cases

This text of 208 P.3d 884 (Hartford Fire Insurance v. Trustees of the Construction Industry) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hartford Fire Insurance v. Trustees of the Construction Industry, 208 P.3d 884, 125 Nev. 149, 125 Nev. Adv. Rep. 16, 2009 Nev. LEXIS 29 (Neb. 2009).

Opinion

*151 OPINION

By the Court,

Gibbons, J.:

The Ninth Circuit Court of Appeals has certified two questions of law to this court concerning various trustees’ attempts to collect unpaid contributions owed to employee-benefit trust funds. This matter arose when a public works subcontractor failed to contribute to employee-benefit trust funds, which were created as part of a collective bargaining agreement between the subcontractor and its employees’ union. After the subcontractor failed to pay employee-benefit contributions owed to the trusts, the trusts’ trustees sued, in federal court, the general contractor and its surety to recover the unpaid contributions. The trustees sued the general contractor under NRS 608.150, which makes general contractors liable for their subcontractors’ employees’ unpaid wages, including fringe-benefit trust-fund contributions. They sued the surety under NRS 339.035(1), which allows “any claimant who has performed labor or furnished material” under a bonded, public works construction contract and who has not been paid in full, to bring an action on the payment bond to recover the amount due.

Just before trial, however, the surety moved for summary judgment, contending that the trustees had failed to meet a condition precedent to recovery: providing the general contractor with the notice required by NRS 339.035(2), which provides that “[a]ny claimant who has a direct contractual relationship with any subcontractor,” but no such direct relationship with the general contractor, “express or implied,” may bring an action on a payment bond only if the claimant provided written notice of the claim to the general contractor. In response, the trustees also moved for summary judgment against the surety and the general contractor. The federal district court apparently disagreed that notice was required and granted summary judgment to the trustees. The surety and the general contractor then appealed to the Ninth Circuit Court of Appeals, which subsequently certified to this court two questions under NRAP 5. *152 The certified questions ask us to determine whether the trustees must comply with NRS 339.035(2)’s notice requirement to recover (1) on the payment bond against the surety, and (2) against the general contractor under NRS 608.150.

The first question’s answer is informed by the nature of the trustees’ standing to recover against the payment bond under NRS 339.035, which is loosely based on their status as third-party beneficiaries to the labor agreement. That is, because the trustees are third-party beneficiaries, we conclude that they should be able to represent the employees who have claims against the surety. The trustees consequently stand in the employees’ shoes for purposes of recovering on the payment bond under NRS 339.035.

The answer to die first question, then, is yes, notice is required to proceed with claims against the bond. Because the employees would be required to provide notice of their claims to the general contractor before recovering on the payment bond under NRS 339.035’s clear terms, the trustees, standing in their shoes, likewise are required to do so.

The answer to the second question is no, the trustees are not required to provide notice to proceed with NRS 608.150 claims against the contractor. NRS 608.150 is in a statutory chapter completely separate from NRS 339.035, and NRS 608.150 plainly does not require that the trustees provide the contractor with notice of their claims before seeking to recover from the contractor under that statute.

FACTS AND PROCEDURAL HISTORY

Appellant Richardson Construction, Inc., was a general contractor on various southern Nevada public works projects. To secure payment for any subcontracted labor and materials provided to the public works construction projects, as NRS 339.035 requires, Richardson entered into bond agreements with appellant Hartford Fire Insurance Company and its related entity, appellant Hartford Accident and Indemnity Company (collectively, Hartford). Under the bond agreements, Hartford and Richardson were jointly and severally liable for labor, materials, and equipment contributed to the projects. Hartford asserts, moreover, that as part of the bond agreements, Richardson agreed to indemnify Hartford for any recovery on the payment bond.

Richardson then subcontracted some of its work to Desert Valley Landscape & Maintenance, Inc. Desert Valley was party to a “memorandum labor agreement” with the local chapter of a laborers’ union, Laborers’ International Union of North America, Local 872. Under the labor agreement, Desert Valley was required to render payments, i.e., fringe-benefit contributions, to certain employee-benefit trust funds administered on behalf of its employees, includ *153 ing those who worked on the Richardson public works project. The trust funds were created under an agreement between Local 872 and various southern Nevada contractor associations, pursuant to the federal Labor Management Relations Act, 29 U.S.C. § 186(c)(5) (2006) (describing a valid employee-benefit trust fund), and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1002 (2006) (defining an employee-benefit plan). They provided pension, health coverage, and vacation benefits to employees of companies that were parties to labor agreements with Local 872.

Although Desert Valley was required to render payments to the trusts for Richardson projects’ employees, it never did so. Consequently, in September 1998, respondents, the trusts’ trustees, instituted an action against Desert Valley in federal district court, asserting a cause of action under ERISA, which generally provides that an employer must comply with its obligation arising under a labor agreement to make employee-benefit contributions. See 29 U.S.C. § 1145 (2006).

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Cite This Page — Counsel Stack

Bluebook (online)
208 P.3d 884, 125 Nev. 149, 125 Nev. Adv. Rep. 16, 2009 Nev. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hartford-fire-insurance-v-trustees-of-the-construction-industry-nev-2009.