Northwest Limestone Co. v. State Department of Transportation

499 N.W.2d 8, 1993 Iowa Sup. LEXIS 86, 1993 WL 120732
CourtSupreme Court of Iowa
DecidedApril 21, 1993
DocketNo. 91-1911
StatusPublished
Cited by3 cases

This text of 499 N.W.2d 8 (Northwest Limestone Co. v. State Department of Transportation) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northwest Limestone Co. v. State Department of Transportation, 499 N.W.2d 8, 1993 Iowa Sup. LEXIS 86, 1993 WL 120732 (iowa 1993).

Opinion

CARTER, Judge.

Great American Insurance Company (Great American), the surety for the general contractor on a highway surfacing project, appeals from a judgment establishing the claims of two unpaid subcontractors against that portion of the contract price required to be retained pursuant to Iowa Code chapter 573 (1991). The general contractor’s interest in these retained funds had been assigned to Great American before this action was commenced. The subcontractors in question, Northwest Limestone Co., Inc. (Northwest Limestone) and Fort Dodge Asphalt Company (Fort Dodge Asphalt), brought separate actions to adjudicate their rights to the statutory retain-age and to recover on the bond. These cases were consolidated and tried together.

In the district court, the appellee subcontractors contended that they held valid claims against funds due the general contractor but retained by the public corporation pursuant to Iowa Code sections 573.12, .13, and .14 (1991). In addition, both appel-lees claimed that Great American, as surety, had acted in a manner that estopped it from opposing appellees’ claims to these retained funds. Great American alleged that both of the appellees failed to commence the present action within the time required by Iowa Code section 573.16 (1991). The district court ruled that appel-lees’ action was not barred by the time limitation specified in section 573.16. The court rejected appellees’ claims of estoppel but upheld their claims to the funds under the statutory claim procedure in chapter 573.

On our de novo review, we agree with the district court that no estoppel has been proven by appellees. We disagree, howev[10]*10er, with that court’s conclusions that appel-lees’ actions were not barred by the time limitation contained in section 573.16. We reverse that portion of the decision and remand the case for an order denying both claims.

The public project that gave rise to this dispute involved the surfacing of 15.24 miles of Highway 7 between Manson and Fort Dodge. The agency dealing for the state on the project was the Iowa Department of Transportation (IDOT). The general contractor on the project was Dieseth Specialty Company (Dieseth), whose surety was Great American. Northwest Limestone subcontracted with Dieseth to furnish 530 cubic yards of concrete on the project for $28,366. Fort Dodge Asphalt subcontracted with Dieseth to provide concrete patches, hot mix asphalt, and equipment rental for approximately $111,500.

A corporate officer of Northwest Limestone heard a rumor that Dieseth was in financial difficulty. The office manager of Fort Dodge Asphalt heard a similar rumor. This prompted both of these subcontractors to file a claim with IDOT for amounts still owed them under their subcontracts on this project. Fort Dodge Asphalt’s claim in the amount of $5121.05 was received by IDOT on May 8, 1990. -Northwest Limestone’s claim in the amount of $24,177.66 was received by IDOT on May 25, 1990.

Receipt of these two claims was acknowledged in writing by IDOT. The agency’s written response, in each instance, advised the subcontractor claimant that, “[b]y filing a claim, the claimant is only protecting his right to institute an action within the time prescribed by law, in the district court in the county in which the labor or materials were furnished. The Iowa Department of Transportation cannot pay any such claims.”

Great American has never denied that the amounts of these two subcontractor claims represent sums legally owed by the general contractor. Appellees have recovered judgment against Dieseth for these claimed amounts. There is also no dispute concerning whether these claims were filed with IDOT within the time prescribed by law. Such claims may be filed “at any time before the expiration of thirty days immediately following the completion and final acceptance of the improvement.” Iowa Code § 573.10(1). Both of these claims were filed in May 1990, and completion and final acceptance did not take place until June 28, 1990. The primary issue presented by Great American does not involve the time the claims were filed with IDOT, but rather the time appellees’ action to adjudicate these claims was filed in the district court.

I. Whether Section 573.16 Bars Appel-lees’ Action to Recover the Statutory Retainage.

Section 573.16 provides in part:

The public corporation, the principal contractor, any claimant for labor or material who has filed a claim, or the surety on any bond given for the performance of the contract, may, at any time after the expiration of thirty days, and not later than sixty days, following the completion and final acceptance of said improvement, bring action in equity in the county where the improvement is located to adjudicate all rights to said fund, or to enforce liability on said bond.

(Emphasis added.) Northwest Limestone’s action was commenced 111 days after the date of completion and final acceptance of the project. Fort Dodge Asphalt’s claim was commenced 118 days after that date.

The district court determined that the failure of these two subcontractors to commence an action not later than sixty days following completion and final acceptance only barred their right to recover against Great American on the bond. The court concluded that, in equity, the section 573.16 time restriction did not preclude these claimants from asserting a right against “the retainage fund that is still there.” Great American challenges this interpretation. It argues, correctly we believe, that a statute of limitations operates alike in both law and equity. As this court has observed:

Although it is the rule in some jurisdictions that the statute of limitations does [11]*11not apply eo nomine to suits in equity, “in this State our statute, ex vigore suo, operates in both courts alike, and not in equity by the mere discretion or courtesy of the chancellor.”

Anderson v. Anderson, 234 Iowa 277, 282, 12 N.W.2d 571, 574 (1944) (quoting Relf v. Eberly, 23 Iowa 467, 469 (1867)). Great American urges that the statute of limitations contained in section 573.16 is applicable to all of the matters to which that section relates. It asserts that section 573.16 expressly contemplates an action “to adjudicate all rights to said fund, or to enforce liability on the bond.”

The distinction that the trial court drew with respect to barring actions to recover on the bond but not barring actions to recover against the statutory retainage has been recognized by this court in cases involving late-filed claims. In Southern Surety Co. v. Jenner Bros., 212 Iowa 1027, 237 N.W. 500 (1931), we stated:

While it is true that appellees’ claims were thus filed with the district court, with its consent, yet such filing was not within the thirty-day period contemplated by the first [paragraph of section 573.10] previously mentioned. Nevertheless, ap-pellees seek to establish their claims through the second paragraph of [that section].

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
499 N.W.2d 8, 1993 Iowa Sup. LEXIS 86, 1993 WL 120732, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northwest-limestone-co-v-state-department-of-transportation-iowa-1993.