Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02690/USCOURTS-ca10-88-02690-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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U . JP J. L _i • 

<Ufw StiU C;m,o,t of Appaals 

'rcnth Cirruit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

AUG 8 1989 

ERNEST W. HAHN, INC., a 

California corporation, 

Plaintiff-Appellant, 

v. 

) 

) 

) 

) 

) 

) 

) 

M. MORRIN & SONS, INC., a/k/a) 

MORRIN CORPORATION, a Utah ) 

corporation; MARATHON STEEL ) 

COMPANY, an Arizona ) 

corporation; PLACER'S INC., ) 

a Utah corporation, AMERICAN ) 

TESTING LABORATORIES, INC., ) 

a Utah corporation, OTTO ) 

BUEHNER, d/b/a BUEHNER ) 

CONCRETE, a Utah corporation, ) 

Defendants, 

and AETNA LIFE AND CASUALTY 

COMPANY, a Connecticut 

corporation, 

Defendant-Appellee. 

) 

) 

) 

) 

) 

) 

) 

) _______________ ) 

MORRIN CORPORATION, a Utah 

corporation, 

Third-Party Plaintiff, 

v. 

MILLARD ARCHULETA ASSOCIATES, 

INC., a California 

corporation, HILLMAN BIDDISON 

AND LOEVENGUTH, a California 

corporation, ADVANCED 

PROTECTION COMPANY, INC., a 

Utah corporation, and PARSON 

READY MIX, INC., a Utah 

corporation, 

Third-Party Defendants. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) _______________ ) 

No. 88-2690 

ROBERT L. HOECKER 

Clerk 

(D.C. No. NC85-006S) 

(N.D. Utah) 

Appellate Case: 88-2690 Document: 01019974347 Date Filed: 08/08/1989 Page: 1 
PLACERS' INC., a Utah 

corporation, 

) 

) 

) 

v. 

Fourth-Party Plaintiff, ) 

) 

) 

) 

AMERICAN TESTING LABORATORIES,) 

INC., a Utah corporation. ) 

) 

Fourth-Party Defendant. ) 

________________ ) 

ORDER AND JUDGMENT* 

Before LOGAN, SEYMOUR and BALDOCK, Circuit Judges. ** 

Plaintiff-appellant Hahn entered into a contract with the 

Ogden City Neighborhood Development Agency to build a parking 

facility. Hahn subcontracted with M. Morrin & Sons, Inc. (Morrin) 

to perform the work. The subcontract provided: "Subcontractor to 

provide Performance Bond naming the Contractor and Owner as 

Obligees." Subcontract art. 7. Thus, Hahn (obligee) required 

Morrin (principal and obliger) to obtain a performance bond, which 

Morrin did obtain from Aetna (surety) on June 11, 1979. The 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

** After examining the briefs and appellate record, this panel 

as determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a). 10th Cir. R. 34.1.9. The cause therefore is ordered 

submitted without oral argument. 

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Appellate Case: 88-2690 Document: 01019974347 Date Filed: 08/08/1989 Page: 2 
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{ 

performance bond contained the following provision: 

Any suit under this bond must be instituted before the 

expiration of two years from the date on which final 

payment under the subcontract falls due. 

Subcontract Performance Bond, Form A. The certificate for final 

payment was issued on or about August 18, 1981. 

Structural failures occurred at the parking facility. On 

January 15, 1985, Hahn sued Morrin for breach of the subcontract, 

in addition to alleging other theories of liability. On March 2, 

1987, Hahn amended its complaint and named Aetna in an attempt to 

recover under the performance bond. Upon recommendation of the 

magistrate, the district court granted summary judgment in favor 

of Aetna finding that the two-year contractual limitation barred 

Hahn's attempt to sue on the performance bond. Our jurisdiction 

to review this final judgment arises under 28 U.S.C. § 1291. 

This case should be handled with dispatch. On appeal, Hahn 

contends that there is a genuine issue of material fact concerning 

whether Hahn had actual knowledge of the two-year limitation 

period contained in the performance bond. We agree with the 

district court and the magistrate that such a fact is not 

material, given that Hahn expressly required Morrin to obtain a 

performance bond which was obtained prior to construction. A 

dispute concerning a fact which is not material will not preclude 

summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

248 (1986). 

Hahn's reliance upon Hoeppner v. Utah Farm Bureau, 595 P.2d 

862 (Utah 1979), a case in which a one-year contractual limitation 

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Appellate Case: 88-2690 Document: 01019974347 Date Filed: 08/08/1989 Page: 3 
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period in a homeowner's policy was not enforced absent actual 

knowledge of the period, is unavailing. In Anderson, the 

homeowner repeatedly sought a copy of the policy, and the insurer 

did not tell her about the limitation period during the time she 

was without a policy. 595 P.2d at 865. The case turns on 

equitable considerations not present in this different commercial 

setting. 

Hahn's other contention on appeal is that, in the absence of 

actual knowledge of a shorter period, the six-year limitation 

period of Utah Code Ann. § 78-12-23(2) (1987) applies, not the 

two-year limitation period contained in the bond. Appellant's 

Brief at 20. Limitation periods shorter than six years are 

disfavored in Utah as to insurance contracts, but "stipulations 

contained in a policy of insurance, if reasonable, are valid, 

binding and enforceable." Anderson v. State Farm Fire & Casualty 

Co., 583 P.2d 101, 103 (Utah 1978). When the surety issued the 

bond naming Hahn as obligee, and when the two-year limitation 

period ran, Utah law only prohibited limitation periods of less 

than one year for insurance contracts. Utah Code. Ann. 

§ 31-19-19(l}(c} (1974); see also Lister v. Great American Ins. 

Co. of New York, 484 P.2d 156, 159 (Utah 1971) (applying Utah 

insurance code to suretyship contracts). We are unconvinced by 

Hahn's public policy argument on this point. 

The obligee clearly brought its suit against the surety out 

of time; no rational trier of fact could find otherwise. See 

Anderson, 477 U.S. at 251-52. Summary judgment was an appropriate 

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Appellate Case: 88-2690 Document: 01019974347 Date Filed: 08/08/1989 Page: 4 
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termination of the obligee's claim against the surety. See 

Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). The judgment 

of the district court is 

AFFIRMED. 

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Entered for the Court 

Bobby R. Baldock 

Circuit Judge 

Appellate Case: 88-2690 Document: 01019974347 Date Filed: 08/08/1989 Page: 5