Pi-Con, Inc. v. a J Anderson Construction Co.

458 N.W.2d 639, 435 Mich. 375
CourtMichigan Supreme Court
DecidedJuly 30, 1990
Docket83682, (Calendar No. 3)
StatusPublished
Cited by17 cases

This text of 458 N.W.2d 639 (Pi-Con, Inc. v. a J Anderson Construction Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pi-Con, Inc. v. a J Anderson Construction Co., 458 N.W.2d 639, 435 Mich. 375 (Mich. 1990).

Opinions

[378]*378Archer, J.

At issue is whether the plaintiff, Pi-Con, Inc., who furnished materials and services to a subcontractor on a public works project, may recover money owed for those materials and services under the provisions of a public works payment bond, where the notice of furnishing materials and services was sent to defendant general contractor, A. J. Anderson Company, by ordinary mail, but not, as required by statute, by certified mail.

We hold that, so long as Pi-Con timely sent notice which otherwise complies with the notice requirements of the public works bond act, MCL 129.207; MSA 5.2321(7), and Pi-Con proves by a preponderance of the evidence that Anderson timely received notice, Pi-Con’s failure to send notice via certified mail will not preclude recovery on the bond.

i

Pi-Con entered into a contract with Brian & Gregory Contracting Company, a subcontractor of Anderson, to furnish materials and services for a construction project at Cass Technical High School in Detroit for which Andérson was the general contractor. The contract between Pi-Con and Brian & Gregory is dated November 4, 1982. Pi-Con asserts that it began furnishing materials and services pursuant to the contract on November 22, 1982.

The statute provides that a claimant not having a direct contractual relationship with a general contractor shall not have a right of action upon a public works payment bond unless two written notices are served, the first within thirty days after the first furnishing of materials or labor, and [379]*379the second within ninety days of the last furnishing of materials or labor.1

The statute further provides that the notices "shall be served by mailing the same by certified mail.”2

Pi-Con claimed in its affidavit in support of its motion for summary disposition that it mailed notice to Anderson and the Detroit Board of Education, with a copy to Brian & Gregory, on Decem[380]*380ber 15, 1982, advising that Pi-Con was supplying materials and services to Brian & Gregory for the Cass Technical project. The notice was sent by ordinary first-class mail and not, as required by the statute, by certified mail. Anderson asserts that a copy of the December 15 notice could not be found in Anderson’s file, and alleges it never received it.

Pi-Con, on September 6, 1984, within ninety days of the last furnishing of materials or labor, notified Anderson and the school board by certified mail that Brian & Gregory owed Pi-Con $25,140.

Brian & Gregory had by then filed for bankruptcy. This action was commenced to recover on the payment bond. The circuit court granted Pi-Con’s motion for summary judgment on the basis that Anderson had actual notice of Pi-Con’s work on the Cass Technical project.3

The Court of Appeals reversed, holding, in reliance on decisions of that Court,4 "that mailing notice by regular mail, despite evidence of actual notice, does not satisfy the statute and that strict compliance with the statute’s notice requirements is required.”5We reverse.

ii

We are guided by the decision of the United States Supreme Court in Fleisher Engineering & Construction Co v United States ex rel Hallenbeck, [381]*381311 US 15; 61 S Ct 81; 85 L Ed 12 (1940). There, in an action brought on behalf of a subcontractor against the principal contractor to recover on a public works payment bond, the Court held that where actual receipt of the notice and the sufficiency of its statements had not been challenged, the failure to send notice by registered mail would not prevent recovery on the bond.

Fleisher construed the Miller Act, 40 USC 270b(a), the federal public works bond on which Michigan’s statute is modeled. The notice requirements of the Miller Act are nearly identical with those of the statute at issue here, except the federal statute requires notice to the general contractor of a public works project only once, within ninety days from the date on which the subcontractor completes its work.6

The Supreme Court held that substantial compliance with the notice requirements was sufficient to perfect an action on the bond:

We think that the purpose of this provision [notice by certified mail requirement] as to manner of service was to assure receipt of the notice, not to make the described method mandatory so as to deny right of suit when the required written notice within the speciñed time had actually been [382]*382given and received. In the face of such receipt, the reason for a particular mode of service fails. It is not reasonable to suppose that Congress intended to insist upon an idle form. Rather, we think that Congress intended to provide a method which would afford sufficient proof of service when receipt of the required written notice was not shown. [Fleisher, supra at 19. Emphasis added.]

We agree. Applying Fleisher’s reasoning to Michigan’s public works bond statute as illuminated by prior case law, we hold that a claimant on a bond may maintain an action on the bond upon establishing compliance with four substantive elements of the notice provisions of MCL 129.207; MSA 5.2321(7). First, a claimant must prove that the principal contractor actually received notice. Second, the notice must relate "the nature of the materials being furnished or to be furnished, or labor being performed or to be performed and identify[] the party contracting for such labor or materials and the site for the performance of such labor or the delivery of such materials . . . .”7 Third, the notice sent must have been written. Fourth, the notice must have been received within the time limits prescribed by the statute.

This Court established the fourth element in People ex rel Wheeling Corrugating Co v W L Thon Co, 307 Mich 273; 11 NW2d 886 (1943). In that case we denied recovery to a claimant who was sixty days tardy in giving notice of the completion of its work, holding that the time limits contained within the public works bond act were mandatory. Cf. People ex rel Chasteen v Michigan Surety Co, 360 Mich 546; 104 NW2d 213 (1960).

As to the third element, this Court established [383]*383in People ex rel F Yeager Bridge & Culvert Co v Cooke Contracting Co, 372 Mich 563; 127 NW2d 308 (1964), that provision of written notice was required under the statute. "Mere knowledge by a surety that a certain party had furnished materials is insufficient notice.” Id. at 565. See also Square D Environmental Corp v Aero Mechanical, Inc, 119 Mich App 740; 326 NW2d 629 (1982). Federal courts interpreting the Miller Act have also held that for a notice to a contractor to be sufficient, it must be written. See, e.g., United States ex rel Excavation Construction, Inc v Glenn-Stewart-Pinckney Builders & Developers, Inc, 388 F Supp 289, 296-297 (D Del, 1975).

The second element, regarding the detail required in the notice, was clarified in Wheeling, where this Court stated that conversations between the general contractor and the surety regarding the several parties furnishing materials on the project could not fulfill the notice requirement.

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Pi-Con, Inc. v. a J Anderson Construction Co.
458 N.W.2d 639 (Michigan Supreme Court, 1990)

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Bluebook (online)
458 N.W.2d 639, 435 Mich. 375, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pi-con-inc-v-a-j-anderson-construction-co-mich-1990.