## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-3913

___________ Consolidated Electrical & Mechanicals, * Inc., United States of America for the * Use and Benefit of a Corporation, * * Appellee, * * v. * * Biggs General Contracting, Inc., a * Corporation; Firemen’s Insurance * Company of Newark, New Jersey, * a Corporation, * * Appellants. *

___________ Appeals from the United States District Court for the No. 97-4048 Eastern District of Missouri.

___________ Consolidated Electrical & Mechanicals, * Inc., United States of America for the * Use and Benefit of a Corporation, * * Appellant, * * v. * * Biggs General Contracting, Inc., a * Corporation; Firemen’s Insurance *The Honorable E. Richard Webber, United States Distr ict Judge for the Eastern 1 District of Missouri. -2- Company of Newark, New Jersey, * a Corporation, * * Appellees. *

___________ Submitted: December 18, 1998 Filed: February 1, 1999

___________ Before WOLLMAN, BEAM, and LOKEN, Circuit Judges.

___________ WOLLMAN, Circuit Judge. Consolidated Electrical & Mechanicals, Inc. (Consolidated) is a use-plaintiff in this action against Biggs General Contracting, Inc. and Fireman’s Insurance Company of Newark (Defendants) under the Miller Act, 40 U.S .C. §§ 270a-270d. After a bench trial, th e district court found Defendants liable under the Act, but held tha t 1 Consolidated was not entitled to damages for lost profits. Both sides appeal. W e affirm.
I.
In 1992, Biggs entered into a general contract with the federal government t o const ruct and remodel Missouri Air National Guard buildings at the St. Loui s Interna tional Airport. Biggs awarded Consolidated the subcontract for installin g electr ical fixtures and equipment. Pursuant to the Miller Act, Biggs obtained a payment bond for the project from Fireman’s.-3-

The proje ct was plagued by delays, primarily caused by the discovery o f asbestos, bad weather, power supply outages, and structural demolition problems

. Despite numero us requests from Consolidated, Biggs failed to promptly issue revised construction schedules. Th is caused significant financial injury to Consolidated in the formof increased storage and material costs. Biggs also failed to provide adequat e access to th e work site, which resulted in idle time and labor inefficiencies fo r Consolid ated. Because Consolidated was not responsible for the delays, it requested addition al payment from Biggs for its increased costs. Biggs refused, pendin g resoluti on of its request for additional payment from the government. Consolidate d then brought this action for payment.
The district

court found that Biggs was partially at fault for the delay damages. Accordingly, it held Defendants liable for $71,540 in damages under the Act. Th e court denied Consolidated’s claim for an additional ten percent in lost profits.
II.
We review the district court’s factual findings for clear error. See Handeen v. LeMaire ( In re LeMaire ), 898 F.2d 1346, 1349-50 (8th Cir. 1990) (en banc) (quoting Anderson v. City of Bessemer City , 470 U.S. 564, 573-75 (1985)) . A finding is clearly erroneous if “‘although there is evidence to support it, t he reviewing court on the entire evide nce is left with the definite and firm conviction that a mistake has bee n committed. ’” Anderson , 470 U.S. at 573 (quoting United States v. United State s Gyp sum Co. , 333 U.S. 364, 395 (1948)). We review the district court’s lega l conclusi ons de novo. See Nodaway Valley Bank v. Continental Cas. Co. , 916 F.2 d 1362, 1364-66 (8th Cir. 1990) (discussing the distinction b etween questions of law and questions of fact); United States ex rel. Morris Constr., Inc. v. Aetna Cas. Ins. Co. , 908 F.2d 375, 377-78 (8th Cir. 1990) (holding that a determination of eligibility for relief under the Miller Act was a mixed question of law and fact, and thus subject to de novo review).-4- A.
Def endants argue that the district court clearly erred in finding Biggs partiall y at fault for Consol idated’s damages. We disagree. Although the government initially caused t he asbestos-removal delays, Biggs exacerbated the delays and increase d Consolidated’s damages in several ways. After learning of the delays, Biggs failed to provide Consolidated revised construction schedules, despite numerous requests

. Biggs also failed to conduct on-site progress meetings, coordinate the work of it s subcontr actors, and provide Consolidated with electricity and proper access to th e wor k site. This resulted in well-documented economic injury to Consolidated in th e form of increased costs of materials and labor.
Defendants also argue that the district court erred as a matter of law in holding them liable for all of Consolidated’s damages after acknowledging that Biggs was only partially at fault. This question is one of first impression in this Circuit.
Because subcontractor s may not impose a lien on government-owned property, the Miller Act ensures that they can recover for materials and labor contributed t o pub lic projects. See F.D. Rich Co. v. United States ex rel. Industrial Lumber Co. , 417U.S. 116 , 121-22 (1974) (citing 40 U.S.C. §§ 270a, 270b); Department of th e Army v. Blue Fox, Inc. , No. 97-1642, 1999 WL 17684 (U.S. Jan. 20, 1999); Unite d States ex rel. Olson v. W.H. Cate s Constr. Co. , 972 F.2d 987, 989-90 (8th Cir. 1992). Th e Act is to be construed broadly because of its remedial nature. See Clifford F

. MacEvoy Co. v. United States ex rel . Calvin Tomkins Co. , 322 U.S. 102, 107 (1944); Ol son , 972 F.2d at 990. Several circuits have interpreted the Miller Act to allow full rec overy by a subcontractor when the general contractor is not wholly at fault for the delays. See Mai Steel Serv., Inc. v. Blake Cons tr. Co. , 981 F.2d 414, 418-20 (9th Cir. 19 92) (holding a general contractor liable for all of a subcontractor’s damages, eve n though th e delays were caused entirely by a third party); United States ex rel. T.M.S. Mechanical Contractors, Inc. v. Millers Mut. Fire Ins. Co. , 942 F.2d 946, 950-51 (5thWe note that a subcontractor may be barred from recovering delay damage s 2 w hen its own conduct was the primary cause of the delay. See Mai , 981 F.2d at 419 n.8; Mil lers Mutual , 942 F.2d at 952 n.14 . It is undisputed here, however, tha t Consolidated was without fault. -5- Cir. 1991) (holding a general contractor liable for all of a subcontractor’s damage s when de lays were partially caused by government’s discovery of asbestos); Unite d States ex rel. Pertun Constr. Co. v. Harvesters Group, Inc. , 918 F.2d 915, 917-19 (11th Cir. 1990) (holding a general contractor liable for all of a subcontractor’s damage s when delays were partially caused by government’s discovery of toxic wastes).
We a gree with the reasoning of these circuits. The Miller Act favors allowin g full re covery from a general contractor regardless of fault because general contractors have privity of contract with the government and can thus recover delay damage s directly from the government, while subcontractors c annot. (Indeed, Biggs brought suit against the g overnment for delay damages in this case.) This is one of the reason s Co ngress believed that subcontractors had inadequate protection under state law fo r t heir work on public projects. See Millers Mutual , 942 F.2d at 951; Pertun , 918 F.2d at 918. Acc ordingly, the district court properly found against Defendants on the issue of liability. 2
B.
Consolidated cross-appeals on the issue of lost profits. It contends that it ma y recover lost profits because the district court found that Biggs breached the contract

. In the alternative, Consolidated claims that it may recover lost profits because they fall within the scope of relief contemplated by the Miller Act. A surety’s liabili ty under the Miller Act is measured by the general contractor’s liability under the construction contract. See D&L Constr . Co. v. Triangle Elec. Supply Co. , 332 F.2d

1009, 1013 (8th Cir. 1964); W.F. Magann Corp. v. Diamond Mfg. Co. ,-6-

775 F.2d 1202, 1204 (4th Cir. 1985); United States ex rel . Leno v. Summit Constr. Co. , 892 F.2d 788, 791-92 (9 th Cir. 1989). Claims brought under the Miller Act, however, are fe deral causes of action and are separate and distinct from state law breach o f contract actions. See United States ex rel. Mariana v. Pir acci Constr. Co. , 405 F. Supp. 904, 906 (D.D.C. 1975) (holding that “the Miller Act provides a feder al cause of action, and the scope and substance of recovery are governed by federal rather than state law”); United States ex rel. Yo nker Constr. Co. v. Western Contracting Corp. , 935 F.2d 936, 940-42 (8t h Cir. 1991) (allowing subcontractor to recover full extent of contractua l damages because it pleaded a pend ent state law claim in addition to its claim under the Miller Act) . Therefore, a subcontractor must specifically plead a breach of contrac t clai m under state law in addition to raising a Miller Act claim if it wishes to recove r damages u nder a contract theory. See , e.g. , Leno , 892 F.2d at 791 (finding tha t subcontractor could not recover state law damages because it failed t o specifically plead a state law cause of action in addition to its Miller Act claim).
Consolid ated brought this claim “under the Miller Act.” Trial Tr. at 7 ; Appellee’s Br. at 15. The district court addressed only a claim under the Miller Act

. SeeMem. Op. of Sept. 26, 1997, at 12-16. Accordingly, we conclude that Con solidated did not raise a free-standing state law claim ag ainst Biggs for breach of contract. Thus, Consolidated’s a

rgument for lost profits pursuant to a breach of contract claim against Biggs must fail. Consolidated also argues that it may recover lost profits pursuant to its Miller Act claim. For this proposition, it cites Hensel Phelps Construction v. United States , 413 F.2d 701, 704 (10th Cir. 1969), and United States v. Transamerica Insurance , 881 F

. Supp. 1505, 1509 (D. Kan. 1995), which hold that lost profits are within the scope of the Miller Act. Decisions of the Fifth, Ninth, and Eleventh Circuits, however, hold that the Miller Act does not contem plate lost profits. See Millers Mutual , 942 F.2d at 952- 53; Mai , 981 F.2d at 418; Pertun , 918 F.2d at 919. Accord United States ex rel. Otis Elevator Co. v. Piracci Constr. Co. , 405 F. Supp. 908, 910 (D.D.C. 1975) (holding-7-

that “lost profit is precisely the type of breach of contract damage courts hav e consistently held to fall outside the scope of the Miller Act”). We agree with the reasoning of these latter cases . The Miller Act was not meant to replace subcontractors’ state law contract remedies, which allow for recovery of lost pro fits. Rather, it provides subcontractors an additional remedy to recover cost s expended in furnishing “labor or material in the prosecution of the work provided for in [a public construction] contract.” 40 U.S.C. § 270b(a). “A claim for profit does not involve actual outlay and thus ‘falls outside both the letter and the spirit of the [Miller] Act.’” Millers Mutual , 942 F.2d at 953 (quoting Otis Elevator , 405 F. Supp. at 910). Therefore, delay damages should be limited to out-of-pocket expenditures. See Oti s Elevator , 405 F. Supp. at 910. As noted above, nothing in the Miller Act prevents subcontractors from bringing state law breach of contract claims against general contractors to recover lost profits. Because l ost profits are not out-of-pocket expenditures for labor and materials , howev er, they are not within the scope of remedies provided under the Miller Act

. Accordingly, the district court was correct in denying Consolidated’s claim for los t profits on this basis. The judgment is affirmed. A true copy.
Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.