No. 85-175 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

ROBINTECH, INC., 

Plaintiff and Respondent, 

WHITE & McNEII, EXCAVATING, INC. , and TRANSAM.ERICA INSURANCE CO., 

Defendants and Appellants. 

APPEAL FROM: District Court of the Fourteenth Judicial District, 

In and for the County of Musselshell, 

The Honorable Roy RodQhiero, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Landoe, Rrown, Planalp & Momrners; James M. Kommers, 

Eozeman, Montana 

For Respondent: 

Sardine, Stephenson, Blewett & Weaver; ~illiam D. 

Jacobsen, Great Falls, Montana 

Submitted on briefs: Aug. 15, 1985 

Decided: November 6, 1985 

Filed : 

NO!/ 6 - 985 

. ,. 

Clerk 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

Defendants, prime contractor and its surety on a public 

works project, appeal summary judgment in favor of plaintiff, 

a materialman and supplier to a subcontractor, entered in the 

Fourteenth Judicial District, Musselshell County, on December 

28, 1984. The District Court determined that as a matter of 

law plaintiff was entitled to summary judgment in the amount 

of $47,639, pl-us interest at 6 percent and costs. 

We affirm. We hold that White & McNeil Excavating, 

Inc., as the prime contractor, was bonded by Transamerica 

Insurance Company to assure payment to its materialman, 

Robintech, under the public works bonding provisions in Part 

Two of Title 18, Chapter 2, MCA. We hold that White & McNeil 

had adequate legal notice on Robintech's claim, and Robintech 

was entitled to payment under the contract and under the 

bonding statutes. 

Both parties moved for summary judgment claiming that 

the material facts were undisputed. For its first issue on 

appeal, White & McNeil challenges the court's conclusion that 

Robintech was a supplier or a materialman to a subcontractor, 

alleging that Waterworks Supplies Company was a materialman 

and not a subcontractor. Therefore, appellant urges this 

Court, Robintech supplied a materialman and is not protected 

by the bond. For its second issue, appellant alleges error 

in the court's ruling that Robintech complied with 

$ 18-2-206, IJICA, by mailing invoices but failing to send 

notice by certified mail of any claim upon the bond. 

The facts material to the summary judgment follow. On 

June 9, 1982, the City of Roundup, Montana, entered into a 

public works contract with White & McNeil Excavating, Inc., 
for the construction of water main improvements to be incorporated into the city water system. White & McNeil, prime 

contractors on the project, executed a payment bond with 

co-defend.ant Transamerica Insurance Company as surety. 

The payment bond contained the following language: 

NOW, THEREFORE, if the PRINCIPAL shall 

romptly make payment -- to all persons, 

Firms, . - & corporations furnishinq 

materia.1~ for or ~erformina labor in the 

prosecution of -- t<e WORK p;ovided -- for in 

such contract, and any authorized exten- 

-- sion or modification thereof, includinq 

all amounts -- due for materials. lubricants, oil, gasoline, coal and coke, 

repairs on machinery, equipment and 

tools, consumed or used in connection 

-- with the construction --- of such WORK. . . . . [~mphasis added.] 

A further provision limited the claimants entitled to 

coverage : 

PROVIDED, that beneficiaries or claimants hereund.er shall be limited to the 

SUECONTRACTORS, and persons, firms and 

corporations having a direct contract 

with the PRINCIPAL or its 

SUBCONTRACTORS. 

The general contract defined a "subcontractor" as "an 

individual, firm or corporation having a contract with the 

CONTRACTOR or with any other SUBCONTRACTOR for the performance of the WORK at the site." "Work" was defined in the 

contract as " [all1 labor necessary to produce the construction required by the CONTRACT DOCUMENTS, and all materials 

and equipment incorporated --- or to be incorporated -- in the 

PROJECT." (Emphasis added.) 

White c McNeil contracted with Waterworks Suppl-ies 

Company as the sole direct supplier of pipe and all materials 

for the project, and Waterworks in turn contracted with 

Robintech to provide the pipe. Steve McNeil testified at his 

deposition tha.t he knew when they "were quoted the job, tha.t 
it was Robintech pipe." Robintech shipped its pipe directly 

to the project and a representative of White & McNeil signed 

for the pipe as consignee. The packing lists and receipts 

bore the Robintech letterhead. Before the project completion, Betty White, secretary of the prime contractor, realized that Waterworks was not paying for the Robintech pipe, 

so she withheld payments to Waterworks. 

The City Council of Roundup met and approved final 

payment to White & McNeil on or about August 3, 1982. On 

August 30, 1982, Robintech mailed a notice to the City of its 

claim against the bond executed between White & McNeil and 

Transamerica on the project, pursuant to notice requirements 

for a right of action, B 18-2-204, MCA. Defendants admitted 

that copies of this notice were mailed to them the next day, 

August 31, 1982. 

I 

Appellant contends that Waterworks Supplies was a 

materialman, not a subcontractor, to White & McNeil, and that 

Robintech supplied one who was not a subcontractor. Arguing 

that Rohintech did not have a direct contract with the principal or a subcontractor, appellant claims that Robintech did 

not qualify for protection under the limiting provision. 

We find no merit in appellant's contentions. Waterworks had a contract with the principal, White & McNeil, to 

provide materials, and Robintech had a contract with Waterworks to provide pipe. Robintech was covered under the 

limiting provision as well as the general bond. Furthermore, 

Robintech was protected under the bonding statutes for public 

works projects, 5 18-2-201, et seq., as a materialman providing materials for the prosecution of work under the contract. 
First, appellant incorrectly argues that Waterworks was 

only a supplier and not a subcontractor, apparently from a 

misconception that a subcontractor must perform labor at the 

work site. White & McNeil contracted with Waterworks to 

provide all its pipe for the public works project, knowing 

that the pipe would be supplied by Robintech. Under the 

general contract, work encompassed both labor and materials 

incorporated into the project. Waterworks was clearly a 

subcontractor on the project. The bond assured payment to a 

corporation having a direct contract with a subcontractor. 

Robintech had such a contract and qualified under the limiting provision of the bond. Therefore, the prime contractor 

or its surety was liable for payment. 

Second, Robintech is entitled to c1a.i.m on the bond 

under Montana's public works bonding statutes, § 18-2-201 et 

seq., MCA, provided that it gave adequate legal notice under 

§ 18-2-206, MCA. 

Bonding requirements. (1) Whenever . . . any public body shall contract 

with any person or corporation to do any 

work for the . . . city, . . . such . . . body shall require the corporation, person, or persons with whom such 

contract is made to make, execute, and 

deliver to such . . . body a good and 

sufficient bond with . . . a licensed 

surety company as surety, conditioned 

-- that such corporation, person, or persons shall: 

(a) faithfully perform all of the provisions of such contract; 

Ib) pay all laborers, mechanics, subcontractors, and materialmen; and 

(c) pay persons who shall supply 

such corporation, person or persons, - or 

subcontractors with provisions, 

provender, material, or supplies for the 

carrying on of such work. [Section 

?8-2-201, MCA. Emphasis added.] 
By statute, the bond assures payment to materialmen and 

persons supplying the corporation or subcontractor with 

material. Regardless of its contract with Waterworks, 

Robintech supplied White & McNeil which benefitted in fulfilling its contractual promise. When the City of Roundup 

accepted the project as completed, it acknowledged. that all 

of the provisions of the contract were performed, including 

the insta.llation of the Robintech pipe. Robintech supplied 

the corporation of White & McNeil the material for the project, White & McNeil knowingly received. the benefit, and its 

surety company, Transamerica, has guaranteed payment. 

I1 

In claiming failure to comply with the notice required 

under 5 18-2-206, MCA, appellant next makes an argument of 

form over substance already decided in favor of respondent's 

position in Treasure State Ind-ustries v. Leigland (1968), 151 

Mont. 288, 443 P.2d 22. Appellant contends that Robintech 

was only entitled to proceed against the contractor if it had 

strictly complied with the provisions for notice to the 

contractor concerning subcontractor under § 18-2-206, MCA, 

sending a certified letter within thirty days to the contractor, which is a separate requirement from 5 18-2-204, MCA. 

We have held that statutory notice was waived and the notice 

provisions were satisfied if the prime contractor had actual 

knowledge that materials were being furnished for the project 

by a particular supplier and consented thereto. Treasure 

State Industries v. Leigland (19681, 151 Mont. 288, 297, 443 

P.2d 22, 27. To require more notice than White & McNeil had 

from the beginning in contract discussions and periodically 

from direct shipments and packing lists and receipts would, 
as in Treasure State, "be to require an idle act and to 

defeat its claim on this ground would deny it justice." 

Treasure State, 443 P.2d at 27. 

We find appellant's argument particularly strained in 

requiring all or nothing notice by certified mail, otherwise 

foreclosing respondent's claim. Section 18-2-206(1), MCA, 

provides that every person, firm or corporation furnishing 

materials to be used in the work for the [city] shall "deliver - or send by certified mail to the contractor a notice in 

writing stating - in substance and effect that [it has provided 

materials] with the name of the subcontractor or agent ordering or to whom the same is furnished and [the contractor or 

his bond will be held for the same] ." (Emphasis added.) The 

accompanying packing lists and receipts were written notice 

stating in substance that Robintech provided materials, and 

White & McNeil's duty under the provisions of this part to 

its materialmen sufficed to hold the contractor and his bond 

liable to pay. Robintech provided the materials to White & 

McNeil for its project, qualifying under the bonding statute, 

5 18-2-201, MCA. We therefore conclude that the requirements 

for notice in Treasure State Industries v. Leigland, supra, 

are satisfied. 

Affirmed. 
We concur: