IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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m 99-30012

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UNITED STATES ON BEHALF OF

CAL’S A/C AND ELECTRIC,

Plaintiff-Appellant,

VERSUS

THE FAMOUS CONSTRUCTION CORPORATION;

CAPITOL INDEMNITY CORPORATION,

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 claim1against

federal contractor The Famous Construction

Corporation (“Famous”) and its surety,

CapitolIndemnity Corporation (“Capitol”), for

amounts owing on unpaid construction and

repair work, subcontractor Cal’s A/C and

Electric (“Cal’s”) appeals a partial summary

judgment dismissing its Louisiana state law

claim for attorney’sfees.2 Because the district

court incorrectlyconcluded that the Miller Act

precludes supplemental jurisdiction over Cal’s’

related state claim for fees, we vacate and

remand, noting that, because the district court

rendered its decision on November 30, 1998,

 

* Pursuant to 5TH CIR. R. 47.5, the court has

determined that this opinion should not be

published and is not precedent except under the

limited circumstances set forth in 5TH CIR. R.

47.5.4.

 

1

See 40 U.S.C. § 270a et seq. (imposing

bonding requirements for federal contracts and

establishing federal cause of action to recover on

such bonds).

 

2

See LA.REV. STAT.ANN. § 9:2784(C) (“If the

contractor or subcontractor without reasonable

cause fails to make any payment to his

subcontractors and suppliers within fourteen

consecutive days ofthe receipt of payment fromthe

owner for improvements to an immovable, . . . the

contractor or subcontractor shall be liable for

reasonable attorney fees for the collection of the

payments due the subcontractors and suppliers.”).
2

it could not have taken into account this

court’s opinion announced the next day in

United States ex rel. Varco Pruden Bldgs. v.

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

918-19 (5th Cir. 1998).

I.

Federal district courts can exercise

supplemental jurisdiction “over 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 the United

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

parties do not contest that Cal’s’ state law

action for 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. Lumber Co., 417 U.S.

116 (1974), however, as construing the Miller

Act to bar supplemental jurisdiction over

otherwise related state law claims for

attorney’s fees. 

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

the Miller Act does not “explicitly provide for

an award of attorneys’ fees to a successful

plaintiff.” Id. 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 the rights created thereby

is a matter of federal not state law.” Id.

at 127. 

F.D. Rich thus announced only that Miller

Act claimsthemselves do not incorporate state

law remediessuch as attorney’sfees; it did not

read the Act to preclude the pursuit of state

causes of action for fees in addition to Miller

Act claims.3 As we announced in Varco

Pruden, “[w]e do not read F.D. Rich to

prohibit an award of attorneys’ 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 result is not, however, mandated by

the Prompt Payment Act Amendments of

1988.5 The Prompt Payment Act, 31 U.S.C.

§ 3901 et seq., confers additional rights and

duties on federal contractors and

subcontractors. The 1988 amendments

additionally provide that

this section [of the Prompt Payment

Act] shall not limit or impair any

contractual, administrative, or judicial

remedies otherwise available to a

contractor or a subcontractor in the

event of a dispute involving 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.

Instead, 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 Appeals 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 . . . [though

that statute was] inapplicable to construction

projects of the United States. The Court of

Appeals nonetheless held that since federal law

controls 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. Garrett v.

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

Cir. 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 controlling

contractual 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.

1988) (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 even when state law provides for

such an award.”).

 

5

See Pub. L. No. 100-496, 102 Stat. 2455,

2460-63, § 9 (codified at 31 U.S.C. § 3905).
3

contractor or deficient subcontract

performance or nonperformance by a

subcontractor.

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

recognize that § 3905(j) effectively overrules

the construction of the Miller Act offered by

F.D. Rich,6but the text plainly limits itself to

one particular section of the Prompt Payment

Act. Any bars to additional remedies erected

by the 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.

Finally, because we follow the lead of

Varco Pruden in holding that F.D. Rich did

not preclude state-based actionsfor attorney’s

fees to accompany Miller Act claims, we need

not entertain Cal’s alternative argument that

§ 1367 implicitly overrules F.D. Rich.

Because F.D. Rich did not 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, notwithstanding

Varco Pruden, because Cal’s’ Louisiana claim

fails on the merits. Louisiana law states:

If the contractor or subcontractor

without reasonable cause fails to make

any payment to his subcontractors and

suppliers within fourteen consecutive

days of the receipt of payment from the

owner for improvements to an

immovable, . . . the contractor or

subcontractor shall be liable for

reasonable 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 supported 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 state law claims

against a contractor orsuretymay be preempted by

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

subsequently superseded by the Prompt Payment

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

have addressed the issue.
4

LA. REV. STAT. ANN. § 9:2784(C) (emphasis

added).

Thus,Louisiana law allowsCal’sto recover

attorney’s fees from Famous, the contractor,

though not from Capitol, the surety.7

Furthermore, as we have previously held,

“recovery on the bond must be under the

Miller Act.” Varco Pruden, 161 F.3d at 919.8

Cal’s therefore may proceed against Famous

but not Capitol.

Famous presentstwo arguments, under LA.

REV. STAT. ANN. § 9:2784(C), why it should

not be held liable for attorney’s fees and

asserts that remand is inappropriate because

Cal’sfailed to comply with FED.R. APP. P. 10.

We address each argument in turn.

A.

First, Famous claimsthat it had “reasonable

cause” to refuse to make payment 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

requestedSSfurther evidence that the dispute

was joined in good faith on the part of

Famous.9 

Moreover, Famous had paid the undisputed

amounts in full; only the disputed amounts

were kept from Cal’s.10 Therefore, according

to Famous, Cal’s cannot prove that Famous

lacked reasonable cause not to make payment,

as required to obtain attorney’s fees under

Louisiana law.

We may affirmon any ground supported by

the record, even if it was not the basis for

judgment.11 Nevertheless, rejection on the

merits of Cal’s request for attorney’s fees

under § 9:2784(C) requires particular factual

findings that the district court did not 

makeSSindeed, had no need to make.12

Therefore, remand is necessary 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 . . . failsto make any payment to

his subcontractors and suppliers within

fourteen consecutive days of the receipt of

payment from the owner.” § 9:2784(C)

(emphasis 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 Howell against USF&G.

Thus, there is no basis for a pendant jurisdiction

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 Act is not the

exclusive remedy available to suppliers in some

cases, it is the exclusive remedy available to a

supplier against a surety (or the surety’s guarantor

in this case) on a Miller Act payment bond.”).

 

9

See Contractors Supply & Eq-Orleans v.

J. Caldarera & 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 cause to withhold

(continued...)

(...continued)

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

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

 

10 Cf. Unis v. JTS Constructors/Managers,

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

(reasoning that “because no disputes existed

between the parties over the Palmetto Creek

Project, it was unreasonable for JTS Constructors

to withhold payment”).

 

11

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”).

 

12 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 the 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 Famousthat

the VA never paid for. 

That is, the VA never paid for work

ordered by Famous, despite Cal’s repeated

warnings that such work did not comply with

Famous’s contract with the VA and thus

would not be eligible for federal

reimbursement. Therefore, if, on remand,

Famous does not establish reasonable cause

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

directed to award Cal’s attorney’s fees, but

only those fees that were necessary to obtain

payments for which Famous was previously

compensated by the VA.13

Cal’s claims that Famous should be

estopped from asserting nonpayment by the

VA as a defense, because Famous

unreasonably 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

payment from the owner, and Cal’s does not

provide anyalternative theoryunder Louisiana

law to justify recovery of attorney’s fees.

C.

Remand therefore is necessary, because the

record does not permit us to render judgment

onCal’s claimunder § 9:2784(C). The district

court erroneously dismissed this claim for lack

of supplemental jurisdiction. Therefore, on

remand it will have its first opportunity to

address the claim on the merits.

Famous and Capitol, however, blame any

deficienciesin 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’sfailed to

notify them that it ordered only an incomplete

transcript, inadequate to support Famous and

Capitol’s merits defense.

It is the duty of the appellant either to

“order from the reporter a transcript of such

parts of the [district court] proceedings not

already on file as the appellant considers

necessary,” or “file a certificate stating that no

transcript will be ordered.” FED. R. APP. P.

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

decides to order something lessthan the entire

transcript, it must “file a statement of the

issues that the appellant intends to present on

the appeal and must serve on the appellee a

copy of both the order or certificate and the

statement.” FED.R. APP. P. 10(b)(3)(A). The

appellee then has the opportunity to order

other parts of the proceedings to be included

in the record on appeal. FED. R. APP. P.

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

Cal’s satisfied in toto the requirements of

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

Capitol with 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 appeal.” Id. The

appellate rules do not require, as Famous and

Capitol seem to suggest, that an appellant

specifically warn appellees that it is not

ordering a complete transcript. Famous and

Capitol may regret failing to take the

opportunity to order additional parts of the

transcript for appealSSparticularly because

Varco Pruden has forced them to press

alternative legal theoriesSSbut the fault lies

with Famous and Capitol, and not Cal’s.

VACATED and REMANDED.

 

13

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

fundsthe 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 absence of

specific language in the contract providing for that

contingency.”).