Okee Industries, Inc. v. National Grange Mutual Insurance

623 A.2d 483, 225 Conn. 367, 1993 Conn. LEXIS 101
CourtSupreme Court of Connecticut
DecidedApril 13, 1993
Docket14583
StatusPublished
Cited by43 cases

This text of 623 A.2d 483 (Okee Industries, Inc. v. National Grange Mutual Insurance) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Okee Industries, Inc. v. National Grange Mutual Insurance, 623 A.2d 483, 225 Conn. 367, 1993 Conn. LEXIS 101 (Colo. 1993).

Opinion

Peters, C. J.

The issue in this appeal is whether an unpaid subcontractor seeking to recover on a payment bond furnished for a public construction contract has adequately complied with the notice requirements contained in General Statutes § 49-42 (a).1 Alleging nonpayment for materials supplied to the worksite, the plaintiff, Okee Industries, Inc., doing business as Hardware Specialities, Inc. (subcontractor), brought an action against the defendant Jon Butler Building and Remodeling (general contractor) and the named defendant, National Grange Mutual Insurance Company (surety).2 After a hearing, the trial court rendered summary [369]*369judgment in favor of the surety, from which the subcontractor appealed to the Appellate Court. We transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c) and now reverse.

The trial court’s memorandum of decision and the record establish the following facts. Pursuant to General Statutes § 49-41,3 the surety executed a payment [370]*370bond for a state financed construction project in East Windsor, naming the general contractor as principal and designating the suppliers of labor and materials as the beneficiaries of the bond. According to its complaint, the subcontractor supplied hardware items for the project in accordance with its contract with the general contractor, but remains unpaid to the extent of $37,742.90.

After unsuccessfully demanding payment from the general contractor,4 the subcontractor sent written notice of its claim to the surety on six separate occasions. Even though only one of these notices was sent by certified or registered mail, the notices were timely and adequately apprised the surety of the substance of the subcontractor’s claim.5 The surety refused to pay the subcontractor.

In the subcontractor’s action against the surety for breach of the surety’s obligations under the payment bond, the trial court concluded that the subcontractor was not entitled to enforce its right to payment under the bond because it had failed to serve timely notice on the general contractor, as required by § 49-42 (a). Because the statute requires a claimant to give proper notice both to the principal on the bond and to the surety, the court granted the surety’s motion for summary judgment and denied the subcontractor’s motion for partial summary judgment.

The subcontractor, in its appeal from the judgment, does not dispute that § 49-42 (a) makes compliance with the statutory notice requirements a precondition to its recovery on the surety bond. American Masons’ Supply Co. v. F. W. Brown Co., 174 Conn. 219, 224, 384 A.2d 378 (1978); Pittsburgh Plate Glass Co. v. Dahm, [371]*371159 Conn. 563, 565, 271 A.2d 55 (1970). The subcontractor’s obligation to give notice to the general contractor of its claim on a payment bond, even if the subcontractor and the general contractor have a direct contractual relationship, was added by an amendment to the statute in 1987. Public Acts 1987, No. 87-345, § 2.6 Accordingly, § 49-42 (a) now expressly provides that any “person who has furnished labor or material . . . may enforce his right to payment under the bond by serving a notice of claim within one hundred eighty days after the date on which he . . . furnished the last of the material for which the claim is made, on the surety that issued the bond and a copy of the notice on the contractor named as principal in the bond.” (Emphasis added.) The statute thus permits the surety to assert as a defense to an action on the bond not only a lack of timely notice to the surety itself, but also a lack of “a copy of the notice” to the general contractor.

The issue before us, therefore, is whether the subcontractor, after having repeatedly notified the surety in writing of a claim for payment in the amount of $37,742.90, adequately gave “a copy of the notice” to the general contractor. The statutory requirement would have been met, on its face, if the subcontractor, in one of its timely written notices of claim to the surety, had appended a legend indicating that a copy was being sent to the general contractor, and had then proceeded to forward a copy as indicated. In this case, however, the subcontractor instead sent a letter that, although timely, was the mirror image of what the statute contemplates. On July 9, 1990, the subcontractor [372]*372wrote a letter to the general contractor, challenging the general contractor’s calculation of the amount remaining unpaid and demanding immediate payment by the general contractor. At the bottom of this letter, the subcontractor appended a notation indicating that a copy was being sent to the surety.7

Whether the July 9,1990 letter meets the statutory requirement that the general contractor be served with “a copy of the notice” that a claim is being asserted against the surety depends upon an assessment of how the letter fits into two somewhat conflicting lines of cases. On the one hand, as the surety notes, § 49-42 is a statutory cause of action that had no antecedents [373]*373at common law. “The statute having created the cause of action and prescribed the procedure, the mode of proceeding is mandatory and must be strictly complied with.” Pittsburgh Plate Glass Co. v. Dahm, supra, 565; New Britain Lumber Co. v. American Surety Co., 113 Conn. 1, 7-8, 154 A. 147 (1931); Wickes Mfg. Co. v. Currier Electric Co., 25 Conn. App. 751, 757, 596 A.2d 1331 (1991). On the other hand, as the subcontractor notes, § 49-42 is a remedial statute enacted to provide security for workers and materials suppliers unable to avail themselves of the protection of a mechanic’s lien. Nor’easter Group, Inc. v. Colossale Concrete, Inc., 207 Conn. 468, 477-79, 542 A.2d 692 (1988). Because “[t]he statutory requirement of a bond is designed to protect and benefit those who furnish materials and labor to the contractor on public work, in that they may be sure of payment of their just claims, without defeat or undue delay . . . such statutory provisions are to be liberally construed.” (Citations omitted; internal quotation marks omitted.) American Masons’ Supply Co. v. F. W. Brown Co., supra, 227; International Harvester Co. v. L. G. DeFelice & Son, Inc., 151 Conn. 325, 333, 197 A.2d 638 (1964).

We have not often applied maxims of strict construction and liberal construction to one and the same statute. As modern jurisprudence counsels, the explanation for this apparent paradox is found in an examination of the underlying fact patterns in the relevant cases. We have relied on the rule of strict construction when the issue was whether the claimant’s notice complied with the specific time requirements of the statute. Pittsburgh Plate Glass Co. v. Dahm, supra, 566;

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Bluebook (online)
623 A.2d 483, 225 Conn. 367, 1993 Conn. LEXIS 101, Counsel Stack Legal Research, https://law.counselstack.com/opinion/okee-industries-inc-v-national-grange-mutual-insurance-conn-1993.