Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-06348/USCOURTS-ca10-94-06348-0/pdf.json

Nature of Suit Code: 130
Nature of Suit: Miller Act
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

UNITED STATES for the use of B&D MECHANICAL 

CONTRACTORS, INC., an Oklahoma corporation, 

Plaintiff-Appellant and Cross-Appellee, 

v. 

ST. PAUL MERCURY INSURANCE COMPANY, a 

Minnesota corporation, and NORTH AMERICAN 

CONSTRUCTION CORPORATION, a Texas 

corporation, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Defendants-Appellees 

) 

and Cross-Appellants.) 

Nos. 94-6348 & 

94-6355 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-94-254-W) 

Kent Frates and Kurt M. Rupert of Hartzo Conger & Cason, Oklahoma 

City, Oklahoma, for Plaintiff-Appellant and Cross-Appellee. 

John F. Fischer (Don G. Holladay with him on the briefs) of 

Andrews Davis Legg Bixler Milsten & Price, Oklahoma City, 

Oklahoma, for Defendants-Appellees and Cross-Appellants. 

Before MOORE, ANDERSON and BRORBY, Circuit Judges. 

BRORBY, Circuit Judge. 

This case addresses whether a valid forum selection clause. 

can override the venue provisions of the Miller Act, 40 U.S.C. 

§ 270b (b) . We hold that it does but find the forum selection 

clause at issue in this case invalid. The district court's order 

dismissing the case for lack of venue is reversed. 

Appellate Case: 94-6348 Document: 01019279170 Date Filed: 11/13/1995 Page: 1 
I. 

North American Construction Corporation (hereinafter 11 North 

American 11 ) contracted with the United States to install part of a 

ground water treatment system at Tinker Air Force Base in Midwest 

City, Oklahoma. St. Paul Mercury Insurance Company (hereinafter 

11 St. Paul 11 ) provided the payment bond to North American for the 

project. B&D Mechanical Contractors, Inc. (hereinafter 11 B&D 11 ) 

entered into a subcontract with North American to provide labor 

and services in the completion of the water treatment system. The 

subcontract contained a forum selection clause stating: 11 The 

Subcontract Agreement and any claims arising under it shall be 

governed by the laws of the State of Texas and exclusive venue 

shall be proper in Bexar County, Texas. 11 

B&D filed claims against North American and St. Paul under 

the Miller Act, 40 U.S.C. § 270a-c, and for breach of contract, in 

the United States District Court for the Western District of 

Oklahoma. North American and St. Paul moved to dismiss for 

improper venue under Fed. R. Civ. P. 12(b) (3). The district court 

granted the motion to dismiss holding that the Miller Act's venue 

provision was waived by the subcontract's forum selection clause. 

B&D appealed. North American and St. Paul cross-appealed the 

district court's order denying them attorney's fees. 

II. 

B&D raises three issues on appeal: (1) whether the district 

court erroneously concluded that the forum selection clause in the 

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subcontract mandated the case be brought in Bexar County, Texas; 

(2) whether the district court improperly resolved a factual issue 

against B&D in its ruling on North American's and St. Paul's 

Motion to Dismiss for Improper Venue; and (3) whether enforcing 

the forum selection clause would be unreasonable under the facts 

and circumstances of this case. 

III. 

B&D contends the district court erred in granting North 

American's and St. Paul's Motion to Dismiss for Improper Venue. 

We review a motion to dismiss based on the validity of a forum 

selection de novo. Riley v. Kingsley Underwriting Agency, Ltd., 

969 F.2d 953, 957 (lOth Cir.), cert. denied, 113 S. Ct. 658 

(1992). 

The interpretation of the Miller Act's venue provision in 

relation to a forum selection 

impression in the Tenth Circuit. 

to protect persons who supply 

construction of federal buildings. 

clause is an issue of first 

Congress enacted the Miller Act 

labor and materials for the 

Due to its remedial nature it 

is afforded a liberal construction. United States ex rel. Sherman 

v. Carter, 353 U.S. 210, 216 (1957). 

Although the language of the Miller Act, 40 U.S.C. § 270b(b), 

requiring that suits be brought in the judicial district where the 

contract was performed "and not elsewhere" seems to mandate strict 

conformance, judicial interpretation holds otherwise. While 

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dealing with the merits of another issue, the Supreme Court 

characterized § 270b(b) as being "merely a venue requirement." 

F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 

U.S. 116, 125 (1974). In United States ex rel. Pittsburgh Tank & 

Tower, Inc. v. G&C Enterprises, Inc., 62 F.3d 35, .36 (1st Cir. 

1995), the court held a contractual forum selection clause 

prevailed when it conflicted with the venue designated by the 

Miller Act. The G&C Enterprises court noted that even though the 

Supreme Court was not addressing a conflicting forum selection 

clause in F.D. Rich, the Court's designation that the statutory 

language was a mere venue requirement was "explicit and very hard 

for a lower federal court to ignore." Id. at 36. This court also 

finds such a designation hard to ignore. Interestingly, even 

prior to the F.D. Rich decision, courts deciding the issue had 

held almost without exception that the provision was a venue 

requirement. United States ex rel. Capolino Sons, Inc. v. 

Electronic & Missile Facilities, Inc., 364 F.2d 705, 707 (2d 

Cir.), cert. denied, 385 U.S. 924 (1966). It is well settled that 

venue provisions are subject to contractual waiver. National 

Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315 (1964). 

Three circuits have addressed forum selection clauses that 

conflict with the Miller Act's venue provisions. All three have 

held that as a mere venue requirement, § 270b(b) is subject to 

contractual waiver by a valid forum selection clause. See FGS 

Constructors, Inc. v. Carlow, 64 F.3d 1230, 1233 (8th Cir. 1995) 

(holding the Miller Act's venue requirement could be waived by 

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defendants); G&C Enterprises, 62 F.3d at 36; In re Fireman's Fund 

Ins. Cos., 588 F.2d 93, 95 (5th Cir. 1979) (holding the case for 

overriding the Miller Act particularly strong where forum 

selection clause was suggested by defendants the parties the 

act was designed to protect) . 

We are persuaded by our sister circuits and agree that a 

valid forum selection clause supersedes the Miller Act's venue 

provision. This case thus turns on whether the forum selection 

clause at issue is valid. To interpret a contract we "must give a 

written agreement that interpretation which was intended by the 

parties." Ader v. Hughes, 570 F.2d 303, 309 (lOth Cir. 1978). 

The clause at issue states that any claims arising under the 

contract shall be governed by Texas state law 11 and exclusive venue 

shall be proper in Bexar County, Texas." Those parties to this 

appeal, St. Paul and North American, urging us to apply the forum 

selection clause, state in their brief that "the contract at issue 

in this case designates a state court forum only. 11 The parties 

selection of a state court forum is fatal to the clause's 

enforceability. 

Although parties are able to contractually alter the Miller 

Act's venue provisions, they are not able to change its 

jurisdictional requirements. As Justice Frankfurter stated in 

Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165 (1939): 

The jurisdiction of the federal courts -- their 

power to adjudicate -- is a grant of authority to them 

by Congress and thus beyond the scope of litigants to 

confer. But the locality of a lawsuit the place 

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where judicial authority may be exercised -- though 

defined by legislation relates to the convenience of 

litigants and as such is subject to their disposition. 

Id. at 167-68. The Miller Act grants federal courts exclusive 

jurisdiction. United States v. Brandt Constr. Co., 826 F.2d 643, 

645 (7th Cir. 1987) (discussing how federa1 courts have 

unanimously held Miller Act jurisdiction to be exclusively 

federal), cert. denied, 484 U.S. 1026 (1988). See also United 

States ex rel. General Rock & Sand Corp. v. Chuska Dev. Corp., 55 

F.3d 1491, 1493 (lOth Cir. 1995). In a supplemental brief, St. 

Paul and North American suggest the federal district court for the 

Western District of Texas as an alternate forum; however, neither 

they nor we can rewrite the subcontract to choose a valid forum 

for them. Therefore, this forum selection clause which attempts 

to divest the federal courts of their exclusive jurisdiction to 

hear this case is void and u~enforceable. 

Because the forum selection clause is invalid, the Miller 

Act's venue provisions prevail and this case must be brought in 

the United States District Court for the Western District of 

Oklahoma, the federal district where the contract was to be 

performed. 

The invalidity of the forum selection clause renders B&D's 

other assertions moot. 

Our reversal of the district court's dismissal for improper 

venue renders North American's and St. Paul's cross-appeal moot. 

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As they are no longer the "prevailing parties" within the meaning 

of the attorney fee provision or the subcontract on this issue, 

they are clearly not entitled to attorney's fees regardless of any 

contractual interpretation. 

IV. 

We find the forum selection clause to be an invalid waiver of 

the Miller Act's venue provisions. The district court's judgment 

is REVERSED and this case is REMANDED to the district court for a 

trial on the merits. 

Our holding renders North American's and St. Paul's crossappeal moot. 

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