United States ex rel. Bangor Roofing & Sheet Metal Co. v. T. W. Cunningham, Inc.

141 F. Supp. 205, 1956 U.S. Dist. LEXIS 3253
CourtDistrict Court, D. Maine
DecidedApril 24, 1956
DocketCiv. No. 763
StatusPublished
Cited by4 cases

This text of 141 F. Supp. 205 (United States ex rel. Bangor Roofing & Sheet Metal Co. v. T. W. Cunningham, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Bangor Roofing & Sheet Metal Co. v. T. W. Cunningham, Inc., 141 F. Supp. 205, 1956 U.S. Dist. LEXIS 3253 (D. Me. 1956).

Opinion

CLIFFORD, District Judge.

This is an action brought under the Miller Act, 40 U.S.C.A. § 270a-270e. It was commenced by the filing of a complain with this Court on September 25, 1953.

The case arises out of a contract executed on August 17, 1950, between the plaintiff and T. W. Cunningham, Inc., one of the defendants in this action. It was in the nature of a sub-contract, stemming from a contract dated August 16, 1950, between T. W. Cunningham, Inc. (also referred to hereinafter as the prime contractor) and the United States of. America, relating to the construction of buildings and utilities at Caswell, Maine.

The defendants, Peerless Casualty Company and General Reinsurance Corporation are sureties on the payment bond issued pursuant to the terms of the Miller Act. By their answer, these defendants admit that the sum of “$7,-800.11, balance of said subcontract price, and $385.78 for said additional items remains due and unpaid.”

The only question for determination in this case, therefore, is whether or not the action was instituted within one year after the date of final settlement of the contract, as required by section 270b (b) of the Miller Act.

According to section 270c of the Miller Act, the date of final settlement as certified by the Comptroller General, is conclusive upon the parties. A recent amendment, enacted on May 11, 1954, has clarified the extent to which the certification of the final settlement date is conclusive. 41 U.S.C.A. § 321. Prior to the enactment of the amendment decisions of government officers rendered pursuant to the standard dispute clauses in government contracts were held to be final absent fraud on the part of such officials. United States v. Wunderlich, 342 U.S. 98, 72 S.Ct. 154, 96 L.Ed. 113. The purpose of the enactment was to overrule the Wunderlich decision. Under section 321, as amended, the determination by the government officials is final and conclusive “unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence.” (Emphasis supplied.)

Contrary to the contentions of the defendants, this Court is of the opinion that section 321 is applicable and controlling in this matter. The legislative history of the enactment clearly indicates that Congress intended to establish a general policy for review of decisions made by government officials. H. R. No. 1380, 83rd Congress, Second Session, 1954, U.S.Code Congressional and Administrative News 1954, p. 2191. And this policy “should not be interpreted in a niggardly manner.” United States v. Lennox Metal Manufacturing Co., 2 Cir., 225 F.2d 302, 319.

In this matter, the Comptroller General certified August 28, 1952, as the date of final settlement. Suit was commenced approximately thirteen months later. Since this is beyond the time within which suit must be instituted, the defendants moved for summary judgment. This motion, however, was denied by this Court in an opinion and order dated October 28, 1955, because there was a genuine issue of material fact as to whether the date of final settlement was supported by substantial evidence.

During the hearing on the motion for summary judgment, both parties agreed that should the motion be denied, a hearing should be had on the merits in order to ascertain the proper date of final settlement. The entire matter, however, was submitted on various affidavits, exhibits and depositions, without a formal hearing.

[208]*208The depositions were of Mr. E. V. Coons and Mr. O. Knowles Blanchard, both of whom were employed in the General Accounting Office of the United States. Mr. Blanchard, who first went to work with the office in 1935, had, at the time of the deposition, the status of attorney adviser. Since 1939, he has been constantly engaged in making determinations or recommendations as to the date of final settlement of government contracts for and on behalf of the Comptroller General. Over the course of many years, he has made “thousands” of determinations or recommendations of this kind.

The material facts, as found by this Court, are as follows: The contract between T. W. Cunningham, Inc., and the Government was to have been fully performed by April 5, 1951. The work, however, was not completed until February 15, 1952. But on December 27, 1951, the General Accounting Office sent a form questionnaire to the Corps of Engineers, U. S. Army, Office of the Division Engineer (hereinafter referred to as the Division Office), Boston, Massachusetts. The purpose of the questionnaire was to ascertain facts from which the date of final settlement could be determined.

The letter was not answered until August 29, 1952, around eight months later. On the preceding day, Mr. C. J. Murray, Chief, Construction Division of the Division Office, signed an office memorandum, addressed to Chief, Legal Branch of the same office. The memorandum stated the account to date, based on the contract and twelve change orders. It indicated a balance due the contractor of $20,984.-52, and an offsetting amount due the Government of $37,500 for liquidated damages for failure to complete the work on schedule, leaving a net amount due the Government of $16,515.48. On the basis of this memorandum, the Division Office recommended August 28, 1952, as the date of final settlement, explaining that on this date “ * * * the amount of the balance administratively found due the Government from the contractor under the contract was approved by C. J. Murray, Chief, Construction Division, New England Division, Corps of Engineers.” (Emphasis in original.) The response to the questionnaire also contained information that the work was completed and accepted by the Government on February 15, 1952.

Subsequent to August 28, 1952, however, the Government reversed its previous position and waived its claim for liquidated damages by a modification to the contract, whereby February 15, 1952, and not some other prior date, was accepted as the completion date of the Caswell Project. Accordingly, a new account was prepared and approved, which reflected a balance due the prime contractor of $20,984.52.

The first manifestation of a different attitude on the part of the Government is a letter dated September 4, 1952, and signed by the contracting officer of the Division Office. It informed T. W. Cunningham, Inc., that the Caswell Project “has been accomplished in a satisfactory manner and is accepted as of February 15, 1952.” A formal order, referred to as Change Order Thirteen, establishing February 15, 1952, as the date of completion of the contract, was approved by the Chief Administrative Assistant to the contracting officer on September 17, 1952. There is no direct evidence as to when Change Order Thirteen was executed except that it bears the date of January 2, 1952.

This order, modifying the contract, expressly provided for acceptance by T. W. Cunningham, Inc. Transmittal of Change Order Thirteen to T. W. Cunningham, Inc., for its approval, however, was not accomplished until September 24, 1952. On the day following its receipt, namely, on September 26, 1952, the prime contractor mailed its acceptance of the modification to the Division Office.

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141 F. Supp. 205, 1956 U.S. Dist. LEXIS 3253, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-bangor-roofing-sheet-metal-co-v-t-w-cunningham-med-1956.