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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

STRUCTURES UNLIMITED, INC.,

 

Plaintiff,

v.

FIRST NATIONAL SURETY COMPANY OF

AMERICA, and DOES 1 through 10 inclusive,

Defendant.

CIV S-04-1140 PAN (JFM)

ORDER

—NFN—

On November 3, 2005, defendant First National Surety moved for summary

judgment pursuant to Fed. R. Civ. P. 56 on plaintiff’s complaint filed June 15, 2004 under the

Miller Act, 40 U.S.C. § 3131 et seq. This case proceeds before this court by consent of the

parties. 28 U.S.C. § 636(c); E. D. Cal. L. R. 73-301. Plaintiff is represented by Thomas M.

Papez; defendant is represented by Matthew P. Shelton. As oral argument was unnecessary to

resolve this matter, the hearing scheduled for December 14, 2005, was vacated and the court

issues this order. E. D. Cal. L. R. 78-230(h).

Upon review of defendant’s motion and all papers in support and opposition

thereof, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:

/////

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I. BACKGROUND

Prior to November 2001, Buddy’s Contracting Service, Inc. (“Buddy’s”)

entered into a prime contract with the U.S. Navy to construct a concrete pad and enclosure over a

sludge dewatering bed at the Marine Corps Mountain Warfare Training Center in Bridgeport,

California. On October 15, 2001, defendant First National executed a payment bond for the

benefit of Buddy’s, guaranteeing payment to all subcontractors. 40 U.S.C. § 3131(b)(2).

On November 16, 2001, Buddy’s subcontracted with plaintiff Structures

Unlimited, Inc. (“Structures”) for construction of the enclosure over the dewatering beds for a

fixed price of $239,700.00. Structures foreman James Murphy arrived at the site on August 13,

2002, to commence work but discovered that the concrete pad necessary to commence

installation of the enclosure was not completed by Buddy’s and that a significant number of the

laminated panels that were to be part of the enclosure were damaged. Structures commenced 

work five days later, when the pad was ready, and despite the need that several laminated panels

be replaced. The parties agreed that the replacement panels would be installed in Spring 2003; 

they were in fact installed in July 2003. Nonetheless, a final inspection was conducted October

1, 2002, and the Navy took possession on October 2, 2002. Pursuant to the parties’ subcontract,

Structures warrantied its work for one year commencing October 1, 2002; however, warranty was

extended for a year commencing with the July 2003 installation. 

Structures billed Buddy’s for 100% of the work on August 14, 2002 ; while the

bill included a notarized statement of project completion, a cover letter of the same date

explained “we are currently on site installing our portion of the above mentioned project, and

expect to be complete by the end of the month, with the possible exception of minor punch list

items.” 

Buddy’s paid Structures $23,970.00 on September 30, 2002, and $172,584.00 on

November 29, 2002, leaving a balance of $43,146.00 Buddy’s filed for bankruptcy in January

2004. On June 15, 2004, plaintiff filed this complaint seeking damages in the amount of

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$43,146.00, plus attorney fees and costs.

Defendant seeks summary judgment based on their assertion Structures’

complaint was not filed within one year “after the day on which the last of the labor was

performed or material was supplied” by Structures, as required by 40 U.S.C. § 3133(b)(4).

Defendant made the same assertion in its motion to dismiss, which this court

denied on November 15, 2004, for the following reasons (at pp. 2-3):

The motion is based upon an exhibit to the complaint showing that Structures

charged the full contract price by invoice dated August 14, 2002. In opposition,

Structures points to paragraph 11 of the complaint wherein Structures alleged that

“on or about July 24, 2003, after Structures had substantially performed its

obligations under the subcontract, Buddy’s breached the subcontract in that it

failed to pay Structures.” . . . It is not plain from the complaint that this action is

time-barred. The contract, which is attached to the complaint, contains elaborate

provision for payment that neither party has addressed. It is possible but not

inevitable that all labor and material had been provided by August 14, 2002. It is

equally possible that the last of the labor was performed or material supplied on or

about July 24, 2003. 

 The only change in defendant’s contention is the standard to be applied.

Defendant asks the court to reconsider the issue based on the entire file and the facts which

defendant alleges are undisputed. Plaintiff opposes the motion on the ground material facts

remain disputed.

II. STANDARDS FOR A MOTION FOR SUMMARY JUDGMENT

Summary judgment is appropriate when it is demonstrated that there exists “no

genuine issue as to any material fact and that the moving party is entitled to a judgment as a

matter of law.” Fed. R. Civ. P. 56(c).

Under summary judgment practice, the moving party 

always bears the initial responsibility of informing the district court

of the basis for its motion, and identifying those portions of “the

pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any,” which it believes

demonstrate the absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). “[W]here the

nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary

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judgment motion may properly be made in reliance solely on the ‘pleadings, depositions, answers

to interrogatories, and admissions on file.’” Id. Indeed, summary judgment should be entered,

after adequate time for discovery and upon motion, against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party’s case, and on which that

party will bear the burden of proof at trial. See id. at 322. “[A] complete failure of proof

concerning an essential element of the nonmoving party’s case necessarily renders all other facts

immaterial.” Id. In such a circumstance, summary judgment should be granted, “so long as

whatever is before the district court demonstrates that the standard for entry of summary

judgment, as set forth in Rule 56(c), is satisfied.” Id. at 323.

If the moving party meets its initial responsibility, the burden then shifts to the

opposing party to establish that a genuine issue as to any material fact actually does exist. See

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In attempting to

establish the existence of this factual dispute, the opposing party may not rely upon the

allegations or denials of its pleadings but is required to tender evidence of specific facts in the

form of affidavits, and/or admissible discovery material, in support of its contention that the

dispute exists. See Fed. R. Civ. P. 56(e); Matsushita, 475 U.S. at 586 n.11. The opposing party

must demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome

of the suit under the governing law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986); T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir.

1987), and that the dispute is genuine, i.e., the evidence is such that a reasonable jury could

return a verdict for the nonmoving party, see Wool v. Tandem Computers, Inc., 818 F.2d 1433,

1436 (9th Cir. 1987).

In the endeavor to establish the existence of a factual dispute, the opposing party

need not establish a material issue of fact conclusively in its favor. It is sufficient that “the

claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing

versions of the truth at trial.” T.W. Elec. Serv., 809 F.2d at 631. Thus, the “purpose of summary

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judgment is to ‘pierce the pleadings and to assess the proof in order to see whether there is a

genuine need for trial.’” Matsushita, 475 U.S. at 587 (quoting Fed. R. Civ. P. 56(e) advisory

committee’s note on 1963 amendments).

In resolving the summary judgment motion, the court examines the pleadings,

depositions, answers to interrogatories, and admissions on file, together with the affidavits, if

any. Fed. R. Civ. P. 56(c). The evidence of the opposing party is to be believed. See Anderson,

477 U.S. at 255. All reasonable inferences that may be drawn from the facts placed before the

court must be drawn in favor of the opposing party. See Matsushita, 475 U.S. at 587. 

Nevertheless, inferences are not drawn out of the air, and it is the opposing party’s obligation to

produce a factual predicate from which the inference may be drawn. See Richards v. Nielsen

Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff’d, 810 F.2d 898, 902 (9th Cir.

1987). Finally, to demonstrate a genuine issue, the opposing party “must do more than simply

show that there is some metaphysical doubt as to the material facts . . . . Where the record taken

as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no

‘genuine issue for trial.’” Matsushita, 475 U.S. at 587 (citation omitted).

III. ANALYSIS

40 U.S.C. § 3133(b)(4) provides:

An action brought under this subsection must be brought no later than one year

after the day on which the last of the labor was performed or material was

supplied by the person bringing the action.

In assessing when the “last of the labor was performed or material was supplied,”

the Ninth Circuit considers “whether the work was performed and the material supplied as ‘a part

of the original contract’ or for the ‘purpose of correcting defects, or making repairs following

inspection of the project.’” U. S. for Use and Benefit of Austin v. Western Elec. Co., 337 F.2d

568, 572-573 (9th Cir. 1964) (finding question of fact whether identified work was required to

“complete” the subcontract), quoting United States v. Gunnar I. Johnson & Son, Inc., 310 F.2d

899, 903 (8th Cir. 1962); accord, U.S. ex rel. J & A Landscape Co. v. Reza, Inc., 30 Fed. Appx.

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708, 710 (9th Cir. 2002) (finding question of fact whether identified work “was performed before

Final Acceptance, and, therefore, pursuant to its contractual obligations”); U.S. for Use and Ben.

of Grinnell Corp. v. DNI, Inc., 106 F.3d 411, 1997 WL 30978, (9th Cir.1997) (finding that final

inspection of sprinkler system by experienced technician was pursuant to the parties’ contract); 

U.S. for Use and Benefit of P.W. Berry Co., Inc. v. General Elec. Government Engineering &

Management Services, 1994 WL 91977 (D.Ore. 1994) (finding question of fact whether

identified labor was required by parties’ subcontract based on principle that “inspection of work

already installed” or “correction of defective work” will not extend statutory period); T & A

Painting, Inc. v. U.S., 673 F.Supp. 994, 996 (N.D.Cal. 1987) (finding “warranty work”

equivalent to “repair work” outside the terms of the original contract).

Defendant relies on plaintiff’s own documents and oral representations, including

billing statements, demands for full payment and statements of project completion, to argue that

Structures performed the last of its labor and supplied the last of its material no later than

September 7, 2002. Plaintiff asserts that it represented its work to be complete in order to make

defendant’s billing cycle (“the 25 of the month”). Defendant also relies on a January 8, 2003 th

letter from the U.S. Navy contracting officer, which states that a final inspection was conducted

on October 1, 2002; that the Navy “took possession of the work completed under the above

subject contract on October 2, 2002;” that “the construction warranty period . . . commenced on

October 1, 2002, and continues for one year;” the “warranty issues regarding the delaminating

Kalwall roof and wall panels . . .forms part of the construction warranty” and requires an on-site

meeting in spring 2003 to “evaluate and determine if any action or replacement of Kalwall panels

are required;” and that any further work on the panels is to “be completed prior to the expiration

of the contract warranty period on September 30, 2003.”

Plaintiff asserts it completed only ninety percent of its subcontract work by

September 7, 2002, and that defendant’s site construction supervisor authorized completion of

the remaining ten percent of the work in Spring 2003. Plaintiff relies, for example, on the

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 The court is required to view the evidence most favorably to plaintiff. See, Suzuki 1

Motor Corp. v. Consumers Union of U.S., Inc., 330 F.3d 1110, 1132 -1133 (9th Cir. 2003),

quoting Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991) (“‘On summary

judgment, we must draw all justifiable inferences in favor of the nonmoving party, including

questions of credibility and of the weight to be accorded particular evidence’”). 

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deposition of its foreman, James Murphy, that Jim Price, Buddy’s site supervisor, authorized

Structures’ delay until Spring 2003 to torque screws, caulk edges and flashing, and paint, which

Murphy testified was work required by the parties’ contract, not warranty work. See Murphy

Depo., at pp. 35-37, 44-47. Plaintiff also asserts that it was required to warranty “the work” from

one year after the date of installation of the new panels in July 2003, although it is unclear

whether this “extended warranty” was on the entire enclosure or only the new panels, and how

this warranty satisfied the parties’ contractual agreement that Structures provide only a one-year

warranty “from date of substantial completion of the installation of the total building.”

Viewing the evidence most favorably to plaintiff, the court finds that plaintiff has 1

demonstrated a genuine issue of material fact on the central question–for which plaintiff bears

the burden of proof–whether plaintiff’s July 2003 installation of new panels and additional work

including torquing, caulking and painting, constituted the “last of the labor performed” or

“material supplied” within the meaning of 40 U.S.C. § 3133(b)(4). Questions of fact remain in

order to assess whether Structures’ July 2003 work was “required to complete the subcontract” or

was “for the purpose of correcting defects or making repairs” under the subcontract. Austin,

supra, 337 F.2d at 572-573. This issue is properly submitted to the trier of fact at trial.

Accordingly, for the foregoing reasons, defendant’s November 3, 2005 motion

for summary judgment is DENIED. 

DATED: April 6, 2006.

006:stru1140.ord

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