## IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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### m 99-30012

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### U NITED 

### S TATES ON 

### B EHALF OF



### C AL 

### ’ S 

### A/C AND 

### E LECTRIC



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Plaintiff-Appellant,

VERSUS



### T HE 

### F AMOUS 

### C ONSTRUCTION 

### C ORPORATION 

### ;

C APITOL 

### I NDEMNITY 

### C ORPORATION



### ,

Defendants-Appellees.

_________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

_________________________

May 16, 2000

Before REAVLEY, SMITH, and EMILIO M.

GARZA, Circuit Judges.

JERRY E. SMITH, Circuit Judge: *

Having won its Miller Act claim 1 against

federal contractor The Famous Construction

Corpo r ation (“Famous”) and its surety, Capitol I ndem

ni ty Corporation (“Capitol”), for amounts o wing on unpaid construction and

repair work, subc ont ractor Cal’s A/C and

Electric (“Cal’s”) appeals a partial su mmary judgment dismissing its Louisiana state law

claim for attorney’s fees. 2 Because the district

court incorrectly concluded that the Miller Act

preclude s supplemental jurisdiction over Cal’s’

related state claim fo r fees, we vacate and

remand, noting that, because the district court

rendered its decision on November 30, 1998,

* Pursu ant to 5 T H C IR. R. 47.5, the court has

determined that t his opinion should not be

published and is not precedent except under the

limited circumstances set forth in 5 TH C IR

. R.

47.5.4.

1 See 40 U.S.C. § 270a et seq. (imposin g bonding requirements for federal contracts and

establishing federal cause of action to r ecover on such bonds). 2 See L A

. R EV

. S TAT

. A NN

. § 9:2784(C) (“If the

contractor or subcontractor without reasonable

cause fails to make any payment t o his

subcontractors and suppliers within fourteen

consecutive days of the receipt of payment from the

owner for improvements to an immovable,

. . . the

contractor or s ubcontractor shall be liable for

reasonable attorney fees for the collecti on of the

payments due the subcontractors and suppliers.”).2

it could not have tak en into account this

court’s opinion announced the next day in

United States ex rel. Varco Prud en Bldgs. v.

Reid & Gary Strickland Co. , 161 F.3d 915,

918-19 (5th Cir. 1998).

I.

Federal district courts can exercise

supplemental jurisdiction “o ver all . . . claims

that are so related to claims in the action

within such original jurisdiction [of the district

court] that they form part of the same case or

controversy under Article III of t he United

States Constitution.” 28 U.S.C. § 1367. The

parties do not c ontest that Cal ’s’ state l aw

action fo r fees is sufficiently related, for §

1367 purposes, to its Miller Act claim. The

district court read F.D. Rich Co. v. United

States ex rel. Indus. Lu m ber Co.

, 417 U.S.

116 (1974), however, as construing the Miller

A ct to bar supplemental jurisdiction over

otherwise rela t ed state law claims for

attorney’s fees.

F.D. Rich did no such thing; it stated that

the Miller Act does not “explicit ly provide for

a n award of attorneys’ fees to a successful

plaintiff.” I

d. at 126. The Court further held

that “[t]he Miller Act provides a federal cause

of action, and the scope of the remedy as well

as the substance of

t he rights created thereby

is a matter of federal not state law.” I d.

at 127.

F.D. Rich thus announced only that Miller

Act claims themselves do not incorporate state

law remedies such as attorney’s fees; it did not

read the Ac t to preclude the pursuit of state

causes of action for fees in addition to Miller

Ac t claims. 3 As we announced in V arco Pruden, “[w]e do not read F .D. Rich to prohibit an award of

at t o rneys’ fees under a

state claim over which the court has exercised

supplementary jurisdiction in a Miller Act

case.” 161 F.3d at 918-19. 4 We therefore

vacate, concluding that Cal’s may pursue attorney’s fees under Louisiana law.

This r esult is not, however, mandated by

the Prompt P ayment Act Amendments of

1988. 5 The Prompt Payment Act, 31 U.S.C.

§ 3901 et seq.

, confers additio nal rights and

duties on federal contractors and

subcontractors. The 1988 amendments

additionally provide that

t his section [of the Prompt Payment

Act] shall n o t limit or impair any

contractual, administrative, or judicial

remedies otherwise available to a

contractor or a subcontractor in the

event of a dispute invol ving late

payment or nonpayment by a prime

3 Indeed, the plaintiff in F.D. Rich did not even

seek a state law-based claim for attorney fees, for

California law did not provide such an action.

Ins tead, the plaintiff sought to incorporate

California state policy into the federal Miller Act

. See F.D. Rich , 417 U.S. at 126-18 (“Looking to

California law, the Court of A p peals found an

award of attorneys’ fees proper because [California

law] allowed for the recovery of attorneys’ fees in

(continued...) (...continued)

state actions on the bonds of contractors for state

and municipal public works projects

. . . [t hough

that statute was] inapplicable to construct ion

p rojects of the United States. The Court of

Appeals nonetheless he ld that since federal law

cont r ols Miller Act recoveries, it was free to look

to ‘state policy’ rather than state law

. . . .”). Here,

by contrast, the plaintiff looks to Louisiana state

law, and not the Miller Act, for relief.

4 See also United States ex rel. Garre tt v.

M idwest Constr. Co. , 619 F.2d 349, 352-53 (5th

C ir. 1980) (“Under [ F

.D. Rich ], federal common

law governs the claim for attorney’s fees in Miller

Act cases

. . . . F

.D. Rich proscribes attorney’s

fees in Miller Act cases absent a co n trolling

c ontractual or statutory provision.”); but see

United States ex rel. Howell Crane Serv. v. U.S.

Fidelity & Guar. Co.

, 861 F.2d 110, 112 (5th Cir.

1 988) (holding that no state law claim for

attorney’s fees should be inferred from pleadings

because “[t]he clear holding of F.D. Rich is that

attorney’s fees are

not generally available in a

Miller Act suit e ven when state law provides for

such an award.”).

5 S e e Pub. L. No. 100-496, 102 Stat. 2455,

2460-63, § 9 (codified at 31 U.S.C. § 3905)

.3

contractor or deficient subcont ract performance or nonperformance by a

subcontractor.

31 U.S.C. § 3905(j). Cal’s would have us

recognize th at § 3905(j) effectively overrules

the construction of the Miller Act o ffered by

F.D. R ich, 6 but the text plainly limit s itself to one particular section of the Prompt Payment

Act. Any bars to additional remedies erected

by th e Miller Act are left untouched by

§ 3905(j). We therefore do not rely on the

Prompt Payment Act, but instead conclude

that F .D. Rich found no such barrier in the

Miller Act in allowing Cal’s to proceed on its

Louisiana claim.

Fina lly, because we follow the lead of

Varco Pruden in holding that F .D. Rich did

not preclude state-based actions for attorney’s

fees to accompany Miller Act claims, we need

not entertain Cal’s alternative argument that

§ 1367 implicit ly overrule s F .D. Rich

. Because F.D. Rich did no t bar supplemental

jurisdiction over state law claims, there was

nothing in that opinion for § 1367 to overrule.

II.

Famous and Capitol argue that the district

court should be affirmed, notwithsta nding

Varco Pruden

, because Cal’s’ Louisiana claim

fails on the merits. Louisiana law states:

If the contractor or subcontractor

wi t hout reasonable cause fails to make

any payment to his subcontractors and

suppliers within f

ourteen consecutive

days of the receipt of payment from the owner for improvements to an

immovable,

. . . the contrac tor or

subcontractor shall be liable f o r

reasonab l e attorney fees for the

collection of the payments due the

subcontractors and suppliers.

6 A few district courts, in addition to the district

court in this case, have support ed this approach.

See United States ex rel. Don Siegel Constr. Co.

v. Atul Constr. Co., 85 F. Supp. 2d 414, 416 n.1

(D.N.J. 2000) (stating that, though “at least one

federal district court has held that a

subcontractor’s supplemental sta t e law claims

against a contractor or surety may be preempted by

the Miller Act . . . the holding in that case was

subsequently superseded by the Prom pt Payment

Act”). We are aware of no courts of appeals that

have addressed the issue.4

L A

. R EV

. S TAT

. A NN

. § 9:2784(C) (emphasis

added).

Thus, Louisiana law allows Cal’s to recover

at t o rney’s fees from Famous, the contractor,

t hough not from Capitol, the surety. 7

Furthermore, as we have previously held,

“recovery o n t he bond must be under the

Miller Act.” V

arco Pruden

, 161 F.3d at 919. 8

Cal’s therefore may proceed against Famous

but not Capitol.

Famous presents two arguments, under L A

. R EV

. S TAT

. A NN

. § 9:2784(C ), why it should

not be held liable for attorney’s fees and

asserts that remand is inappropriate because

Cal’s failed to comply with F ED

. R. A PP

. P. 10.

We address each argument in turn.

A.

First

, Famous claims that it had “reasonable

cause” to refuse to make payme nt and

therefore cannot be made to pay fees under

§ 9:2784(C). Famous and Cal’s disputed the

amount owed. In fact, the district court

granted less than what Cal’s originally had

requested 

### S

S further evidence that the dispute

was joined in good faith on the part o f

Famous. 9 Moreover, Famous had paid the undisputed

amounts in ful l; o nly the disputed amounts

were kept from Cal’s. 10 Therefore, according

to Famous, Cal’s cannot prove th a t Famous

lacked reasonable cause not to make payment,

a s required to obtain attorney’s fees under

Louisiana law.

We may affirm on any ground supported by

the record, even if it w as no t the basis for

judgment. 11 Nevertheless, rejection o n the

merit s of Cal’s request for attorney’s fees

under § 9:2784(C) requires particular factual

findings that the district court did not

make 

### SS inde ed, had no need to make. 1 2

Therefore, remand is necessa r y to determine

whether Famous had reasonable cause not to

pay Cal’s.

B.

Second

, the statute allows recovery of

attorney’s fees only

“[i ]f the contractor or

subcontractor

. . . fails to make any payment to

his subcontractors and suppl iers w ithin

fourt een consecutive days of the receipt of

payment from the ow ner

. ” § 9:2784(C)

(emp hasis added). The VA made a series of

7 See Howell Crane

, 861 F.2d at 113 (“[Surety]

USF&G ’s only involvement with [subcontractor]

Howell was its Miller Act bond. No state law

claim was asserted by How e ll against USF&G.

Thus, there is no basis for a pendant juris d iction

award of attorney’s fees against USF&G.”).

8 See also Bernard Lumber Co. v. LanierGervais Corp. , 560 So.2d 465, 467 (La. App. 1st

Cir. 1990) (“While the Miller A ct is not the

exclusive remedy available to suppliers i n some

cases, it is the exclusive reme dy available to a

supplier against a surety (or the surety’s guarantor in this case) on a Miller Act payment bond.”).

9 See Contractors Supp ly & Eq-Orleans v.

J. Ca ldarera & Co. , 734 So. 2d 755, 759 (La.

App. 5th Cir. 1999) (“The trial judge determined

that the amount demanded by the plaintiff was out

of proportion to the amount owed, therefore the

defendant had reasonable caus e to withhold

(continued...) (...continued)

payments. . . . [T]he trial court did not err in

denying the plaintiff attorney fees . . . .”).

1 0 Cf. Unis v. JTS Constructors/Manage rs,

Inc.

, 541 So. 2d 278, 281 (La. App. 3d Cir. 1989)

(reasoning that “because no disputes existed

between th e parties over the Palmetto Creek

Project, it was unreasonable for JTS Constructors

to withhold payment”).

1 1 See Zuspann v. Brown , 60 F.3d 1156, 1160

(5th Cir. 1995) (“We are free to uphold the district

court’s judgment on any basis that is supported by

the record.”); Wooton v. Pumpkin Air, Inc.

, 869 F.2d 848, 850 n.1 (5th Cir. 1989) (stating that

judgment “may be affirmed on appeal for reasons other than those asserted or relied on below”).

1 2 The intensely factual nature of this dispute is

reflected in the briefs of both parties, and that

remand for further proceedings is warranted is

reflected in th e paucity of record references by

either side.5

payments to Famous, including compensation

for part of the work performed by Cal’s.

Cal’s, however, also did work for Famous that

the VA never paid for.

That is, the VA never paid for work

ordered by Famous, despite Cal’s r epeated

warnings that such work did not comply with

Famous’s c ontract wi th the VA and thus

wo uld not be eligible for federal

reimbursement. Therefore, if, on remand,

Famous doe s not establish reasonable cause

for failing to pay Cal’s, the district court is

directed t o award Cal’s attorney’s fees, but

only those fees that were neces sary to obtai n

payments for which Famous was previously

compensated by the VA. 13

Cal’s claims that Famous should be

estopped from asserting nonp a yment by the

VA as a defense, because Famous

unrea so nably failed to request additional

payments from the VA to ensure full

compensation for Cal’s. But nothing in the

text of § 9:2784(C) suggests any opportunity

for relief where the contractor has not received

paym ent from the owner, and Cal’s does not

provide any alternative theory under Louisiana

law to justify recovery of attorney’s fees.

C.

Remand therefore is necessary, because the

record does not permit us to render judgment

on Cal’s claim under § 9:2784(C). The district

court erroneously dismissed this claim for lack

of supplem

e ntal jurisdiction. Therefore, on

remand it will h ave its first opportunity to

address the claim on the merits. Famous and Capitol, however, blame any

deficiencies in the record not on the procedural

posture of this case, but on Cal’s. They assert

that record omissions should be construed

against Cal’s on the ground that Cal’s failed to notify them that it ordered only an incomplete

transcript, inadequate to support Famous and

Capitol’s merits defense.

It i s the duty of the appellant either to

“order from the reporter a t ranscript of such

parts of the [district court] proceedings not already on file as t he appellant considers

necessary,” or “file a certificate stating that no

t ranscript will be ordered.” F E D

. R. A PP

. P.

10(b)(1). Moreover, where the appellant

decides to order something less than the entire

transcript, it must “file a statem ent of the

issues that the appellant intends to present on

the appeal an d must serve on the appellee a

copy of both the order or certi ficate and the

statement.” F E D

. R. A PP

. P. 10(b)(3)(A). The

appellee then

has the opportuni ty to order

o t her parts of the proceedings to be included

in the record on

appeal . F E D

. R. A PP

. P.

10(b)(3)(B)-(C).

Cal’s satisfied in toto th e requirements of

rule 10(b)(3)(A). It served Famous and

Capitol wit h its transcript order and with its

notice of appeal, which adequately articulated

a “statement of the issues that the appellant

intends to present on the appe al.” I d. The

appellate rules do not require, as Famous and

Capitol seem to suggest, that an appellant

specifically warn appellees that i t is not

ord ering a complete transcript. Famous and

Ca p itol may regret failing to take the

opportuni ty to order a ddit ional parts of the

transcript for appeal 

### SS

particularly because

Varco Pruden has forced t hem to press

alternativ e legal theories 

### S S but the fault lies

with Famous and Capitol, and not Cal’s.

VACATED and REMANDED. 1 3 See Gitz v. Quality Restorations

Contractors, Inc. , 508 So. 2d 170, 172 (La. App.

4th Cir. 1987) (Ciaccio, J., concurring) (“[Section

9:2784(C) ] is a punitive statute that regulates the

timely payment of the sub-contractor out of those

funds the contractor receives as progress payments

from the owner . It does not and cannot shift the

risk of non-payment by the owner from the general

contractor to the sub-contractor in the absen ce of

specific language in the contract providing for that

contingency.”).