In the

United States Court of Appeals

For the Seventh Circuit

No. 00-2853

United States of America for the use and benefit

of Aldridge Electric Company, Inc., and Reliance

Insurance Company,

Plaintiffs-Appellants,

v.

Pickus Construction & Equipment Co., Inc.,

and The American Insurance Company,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 98 C 3261--Ruben Castillo, Judge.

Argued March 29, 2001--Decided May 4, 2001

 Before Easterbrook, Rovner, and Diane P.

Wood, Circuit Judges.

 Easterbrook, Circuit Judge. Pickus

Construction was the general contractor

for the Damage Control Building at the

Great Lakes Naval Training Center in

Illinois, and because the United States

was the client the project was covered by

the Miller Act, 40 U.S.C. secs. 270a270d. Pickus hired Metrick Electric Co.

to work on the project. As the Miller Act

requires, Pickus secured a bond (through

American Insurance Co.) for the benefit

of Metrick, which posted its own bond

(through Reliance Insurance Co.) for the

benefit of Pickus and the Navy. Before

completing the electrical installation

Metrick became insolvent and stopped

work. Reliance assumed Metrick’s

obligation to finish the project and also

acquired Metrick’s rights (including its

right to be paid for successful

completion). Reliance engaged Aldridge

Electric Co., which finished the project

to the Navy’s satisfaction. Pickus paid

Reliance the full price that had been

promised to Metrick. But Reliance wants

more. It contends that Pickus’s delay in

completing the Damage Control Building

increased the expense of the electrical

work by some $400,000, which Reliance

says it had to pay Aldridge and wants
Pickus to cover; when Pickus refused,

Aldridge and Reliance brought this suit

under the Miller Act against Pickus and

American. At the close of plaintiffs’

case in a bench trial, the district judge

concluded that Pickus does not owe

anything on top of the price it

negotiated with Metrick. See Fed. R. Civ.

P. 52(c).

 Our first question is: Why is Aldridge

a plaintiff? Reliance has paid Aldridge

the full agreed price for its work, and

it is hard to see how Pickus could owe

Aldridge anything. Any loss as a result

of Pickus’s scheduling problems has been

borne by Reliance, not Aldridge. At oral

argument counsel said that Aldridge and

Reliance had agreed to share any recovery

from Pickus, but this does not make

Aldridge a proper plaintiff any more than

a lawyer working on contingent fee

becomes a party to the case. If Reliance

had promised to pay half of its winnings

to its ceo as a bonus, or to its bank to

retire a loan, neither the ceo nor the

bank would become entitled to sue Pickus.

The only entity in privity with Pickus,

and the only one arguably entitled to

extra compensation, is Reliance, which

stepped into Metrick’s shoes and must be

treated as Pickus’s electrical

subcontractor. Our conclusion that

Aldridge is not a proper party enables us

to pretermit some tricky questions, such

as whether Aldridge, as a subsubcontractor, made a timely claim. Cf.

United States ex rel. S&G Excavating,

Inc. v. Seaboard Surety Co., 236 F.3d 883

(7th Cir. 2001). The district court’s

problematic decision to disregard the

statutory requirements for claims by subsubcontractors, 40 U.S.C. sec.270b(a), is

accordingly a subject on which we express

no opinion.

 Aldridge’s presence in the case had an

unfortunate effect at trial, for the

district judge concentrated his attention

on its nonexistent claims and did not

discuss the more substantial claims that

Reliance possesses (if only by

subrogation from Metrick) as Pickus’s

electrical subcontractor. Most of the

district judge’s oral findings of fact,

delivered immediately after plaintiffs

rested, deal with Aldridge’s situation.

For example, the judge disbelieved the

testimony of Aldridge’s managers that

they did not appreciate how far behind
the project was when they took over; the

judge also disbelieved testimony by these

managers to the effect that they thought

they had no option other than to work

extra fast (and at extra expense) to

catch up. The judge thought that Aldridge

should have understood (or readily could

have learned) that the Navy had decided

not to enforce the schedules in the

original contract. The district judge

also concluded that the project fell

behind by only eight days during the time

Aldridge was on the job, and that this

variation was within the norm for large

construction projects, and thus could not

have caused Aldridge any injury. What the

judge did not discuss, however, is

whether the 100-day delay before

Metrick’s insolvency caused injury by

requiring Metrick to rearrange its own

schedules in order to synchronize its

work with other components of the

project. A subcontractor is entitled to

compensation for extra expense caused by

the need either to delay or to accelerate

its work in order to mesh with the

progress of other contractors, whose

efforts may be essential to (or may

depend on) the work of the electrical

subcontractor. See, e.g., Consolidated

Electrical & Mechanicals, Inc. v. Biggs

General Contracting, Inc., 167 F.3d 432,

434-35 (8th Cir. 1999); Amp-Rite Electric

Co. v. Wheaton Sanitary District, 220

Ill. App. 3d 130, 580 N.E.2d 622 (2d

Dist. 1991). (We cite both federal and

state cases because the parties have

slighted choice-of-law issues; although

many courts assume that federal law

governs all issues if a bond had been

posted under the Miller Act, this is far

from clear. See Turner/Ozanne v.

Hyman/Power, 111 F.3d 1312 (7th Cir.

1997). But there is no salient difference

between Illinois law and the principles

other circuits have devised for Miller

Act litigation, so we need not pursue

this question.) As the successor to

Metrick’s rights, Reliance is entitled to

recover from Pickus (and American)

whatever Metrick could have recovered. It

is irrelevant for this purpose that

Aldridge replaced Metrick. Damages (if

any) depend on how a single contractor

that was on the job the whole time would

have been affected by the delay;

Metrick’s abandonment of the job neither

increases nor reduces Pickus’s exposure,

which should be evaluated as if Metrick

had been the electrical subcontractor
from start to finish. By concentrating on

what happened after Aldridge took over,

the district judge missed the boat.

 Now it may be that the parties rather

than the judge bear most of the

responsibility. Reliance, after all,

dragged Aldridge into this suit and

controlled the presentation of evidence

at trial. At oral argument counsel for

Pickus and American contended that

plaintiffs had devoted their case to

events after Metrick’s replacement,

effectively abandoning any claim that

Reliance holds as the subrogee of

Metrick’s rights. The problem with this

response is in the opening phrase: "At

oral argument . . .". Reliance squarely

presented a subrogation claim in its

brief--it is the basis for the bulk of

Reliance’s damages--and Pickus failed to

respond. Pickus not only neglected to

argue that Reliance had omitted such a

claim at trial but also offered no reply

of any other kind. By silence it

effectively conceded the core of

Reliance’s position. Pickus thus has

forfeited any entitlement to the benefit

of Reliance’s forfeiture at trial (if

there was one, a subject we need not

consider; though we add that the trial

record contains some evidence of injury

to Metrick, for otherwise a remand would

be pointless). Moreover, Pickus has

forfeited a second potential defense:

that in a contract (which the parties

call the Takeover Agreement) negotiated

between Pickus and Reliance after

Metrick’s default, Reliance may have

given up any entitlement to damages as

Metrick’s subrogee. Pickus does make a

short argument that Reliance has no claim

for breach of the Takeover Agreement, but

it does not attempt to use the Takeover

Agreement as a response to Reliance’s

subrogation claim. Perhaps this strategy

(or lack of one) suggests that it was

Pickus that persuaded the district judge

to concentrate on Aldridge almost

exclusively, and Pickus took itself in as

well. However that may be, now that

Aldridge is out of the case it is

essential to determine what claims

Metrick (and thus Reliance) may have

against Pickus.

 Because the district judge stopped the

trial without hearing defendants’ case,

what we have said about the events may

reflect the incompleteness of the
evidence. The record must be fleshed out,

and in light of Circuit Rule 36 this

means a complete new trial before a

different district judge.

Reversed and Remanded