United States ex rel. Chevron Asphalt Co. v. Maryland Casualty Co.

316 F. Supp. 750, 1970 U.S. Dist. LEXIS 11217
CourtDistrict Court, E.D. California
DecidedJune 23, 1970
DocketCiv. No. S-1181
StatusPublished
Cited by5 cases

This text of 316 F. Supp. 750 (United States ex rel. Chevron Asphalt Co. v. Maryland Casualty Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. California 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. Chevron Asphalt Co. v. Maryland Casualty Co., 316 F. Supp. 750, 1970 U.S. Dist. LEXIS 11217 (E.D. Cal. 1970).

Opinion

MEMORANDUM AND ORDER

MacBRIDE, Chief Judge.

This is a motion for summary judgment by the plaintiff in a Miller Act case (40 U.S.C. §§ 270a-270d). Defendants concede their liability for the amount of the prayer except for attorney fees. The subcontract and the bond made no provision for award of attorney fees. The only question to be decided is whether attorney fees are awardable in Miller Act cases in California absent a provision to that effect in the contract or surety bond.

Defendants place primary reliance on B. C. Richter Contracting Co. v. Continental Casualty Co., 230 Cal.App.2d 491, 41 Cal.Rptr. 98 (1964). The California District Court of Appeal, applying federal law, held on similar facts that no attorney fees could be awarded. The court first determined that under federal Miller Act law1 the surety is liable for attorney fees only when its principal, the contractor, would be liable for attorney fees under state law. It then determined that Cal.Govt.Code § 4207, which authorizes payment of attorney fees in actions against the surety on a contractor’s bond, was applicable only to public works of the State of California and its political subdivisions and agencies. It concluded that because the project involved was a Federal rather than a state project, § 4207 did not apply und no attorney fees could be awarded. The court rejected the holding of United States for Use and Benefit of Western Steel Co. v. Reliance Insurance of Philadelphia, Pa., 227 F.Supp. 939 (D.Mont. 1964), which had awarded attorney fees under a similar Montana statute. In that case Judge East looked to the state’s public policy rather than the express language of the statute. He reasoned that since Montana awarded attorney fees under its equivalent of the Miller Act, the Miller Act plaintiff should also be entitled to attorney fees in federal court. The California District Court of Appeal felt that this ran “counter to the current of federal decisional law.” 230 Cal.App.2d at 506-507, 41 Cal.Rptr. at 108. Later federal decisions have vindicated Judge East’s view which I adopt to award attorney fees in this case.

The question of whether the court may award attorney fees in Miller Act cases absent some written agreement of the [752]*752parties has never been directly decided by the Ninth Circuit Court of Appeals. See United States for Use of Getz Bros. & Co. v. Markowitz Bros. (Delaware), Inc., 383 F.2d 595, 598 (9th Cir. 1967); Travelers Indemnity Company v. United States, 362 F.2d 896, 899 (9th Cir. 1966). In language which it later characterized as dictum, see United States for Use of Getz Bros. & Co. v. Markowitz Bros. (Delaware), Inc., supra 383 F.2d at 598, the court indicated that the state law of the forum governed the award of attorney fees in Miller Act cases. See Macri v. United States, 353 F.2d 804, 811 (9th Cir. 1965); see also Sam Macri & Sons, Inc. v. United States of America, 313 F. 2d 119, 130 (9th Cir. 1963). Although other courts are not unanimous2 I believe the better view is that principally developed in the Fifth Circuit which awards attorney fees when they would be awarded under state law. See e.g., United States Fidelity & Guar. Co. v. Hendry Corporation, 391 F.2d 13 (5th Cir. 1968); Transamerica Insurance Company v. Red Top Metal, Inc., 384 F.2d 752 (5th Cir. 1967); United States for Use and Benefit of Caldwell Foundry and Machine Company v. Texas Construction Company, 237 F.2d 705 (5th Cir. 1955); see also United States for Use and Benefit of Western Steel Co. v. Reliance Insurance Co. of Philadelphia, Pa., supra; United States for Use and Benefit of Miller & Bentley Equipment Co. v. Kelly, 192 F. Supp. 274, 279 (D.Alaska 1961).

The dispute here is whether to apply the state law literally or to apply the state’s public policy as evidenced by its statutes. An examination of the rationale for looking to state law at all provides the answer. The claim for attorney fees must be part of the federal statutory right created by the Miller Act; it does not originate in either common law or California statutes. See Transamerica Insurance Company v. Red Top Metal, Inc., supra 384 F.2d at 754. It is therefore a matter of federal law which is being decided. The Miller Act is silent on the question of attorney fees. It does not provide that they may or may not be allowed, nor does it specify that the question is to be determined according to state law. Id. at 756. The courts therefore look to the purpose of the Miller Act. The Miller Act was passed to provide security to persons who provide labor and materials on federal public works to take the place of mechanics’ liens granted under state law to persons who work on private property. Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 380, 37 S.Ct. 614, 61 L.Ed 1206 (1917). These persons could not acquire such liens on federal property. Since the Miller Act was intended to take the place of state lien laws, it is natural to attempt to provide the same protection under the Miller Act as is provided under state law. Thus, the courts should seek to provide laborers and materialmen with a cause of action including the same ingredients in federal court collecting under the Miller Act as they would have in state courts collecting for non-federal projects. One of these ingredients is attorney fees.

We see no reason why a contractor whose remedy stems from a federal statute should have the question of attorneys’ fees governed by a different law from that governing a contractor whose remedy arises under state law, when the federal remedy was intended to be in lieu of the state remedy. Persons who provide labor and materials on public works have no lien rights against the United States. The Miller Act itself reflects the Nation’s interest in seeing that mechanics and materialmen engaged in work for the national government are .protected at least as well as are those engaged in private work whom the state protects. It seems reasonable therefore to look to state policy to determine whether the “protection” afforded by “payment” encompasses full reeoup[753]*753ment of all costs and damages, such as attorneys’ fees. We hold, therefore, that the supplier’s statutory right to “payment” includes the right to attorneys’ fees — if the work is performed in a state allowing a supplier on private projects to recover such fees. (Transamerica Insurance Company v. Red Top Metal, Inc., supra 384 F.2d at 756) [emphasis in original]

This is not an Erie-type case where the federal court applies state law. United States Fidelity & Guaranty Co. v. Hen-dry Corporation, supra 391 F.2d at 21. In Erie cases the court must apply the law precisely as it exists. Here the court is looking to state law to determine what the federal law should be — filling an interstice in the Miller Act.

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Bluebook (online)
316 F. Supp. 750, 1970 U.S. Dist. LEXIS 11217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-chevron-asphalt-co-v-maryland-casualty-co-caed-1970.