* 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 40 U.S.C. § 3133.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-60134

Summary Calendar

United States of America for the use and benefit of

A&R SUPPLY OF MISSISSIPPI, a Division of Just-Rite Supply, Inc.,

Plaintiff–Appellee,

v.

TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA,

Defendant–Appellant.

Appeal from the United States District Court

for the Southern District of Mississippi

USDC No. 1:06-CV-111

Before HIGGINBOTHAM, STEWART, and OWEN, Circuit Judges.

PER CURIAM:*

The district court granted partial summary judgment to A&R Supply of

Mississippi on its Miller Act1claim against Travelers Casualty & Surety

Company of America (Travelers). Travelers timely appealed, claiming that the

district court erred by rejecting its estoppel defense, and arguing that public

United States Court of Appeals

Fifth Circuit

F I L E D

February 7, 2008

Charles R. Fulbruge III

Clerk
No. 07-60134

2 441 F.2d 779 (5th Cir. 1971).

2

policy compels a reevaluation of our Miller Act jurisprudence. This case is

controlled by United States for Use of Friedrich Refrigerators, Inc. v. Forrester,

2

and we therefore affirm. 

I

The United States awarded Debcon, Inc. (Debcon) a contract to develop

naval housing units. Debcon received a surety payment bond from Travelers

and subcontracted with Allen’s Construction, Inc. (Allen’s) to install gypsum

board. Allen’s asked Just-Rite Supply, Inc. (Just-Rite) to supply the board.

Just-Rite agreed to supply the materials for $365,000, but because of concerns

that Allen’s was not creditworthy, Just-Rite required Debcon and Allen’s to enter

a joint check agreement. Under this agreement, Debcon would pay $365,000 for

the gypsum board through checks written jointly to Allen’s and Just-Rite; each

check would require an endorsementfrom both recipients. Just-Rite drafted the

agreement with the express purpose of providing adequate assurances of

payment. 

Although Debcon made numerous payments under this agreement, JustRite ultimately suffered a shortfalltraceable to the parties’failure to specify how

the check recipients should divide the payments. Some of the money from

Debcon was due to Allen’s for supplying labor, while the remainder of the funds

was due to Just-Rite for supplying materials. The firms never stipulated how

much of each check was for labor and how much was for supplies. Debcon did

not know how the parties were dividing the funds, nor was it able to provide the

proper division upon Just-Rite’s request. The recipients apparently varied their

method of division. In some instances, they relied upon an estimate sheet that

understated the cost of materials; in others,they used the value of the materials

Just-Rite shipped. The accounting was further complicated after Allen’s wrote
No. 07-60134

3 Hockman v. Westward Commc’ns, L.L.C., 407 F.3d 317, 325 (5th Cir. 2004).

4 40 U.S.C. § 3133(b)(1).

5 Graybar Elec. Co. v. John A. Volpe Constr. Co., 387 F.2d 55, 58 (5th Cir. 1967)

(quoting St. Paul Mercury Indem. Co. v. United States for Use of H.C. Jones Constr. Co., 238

3

a bad check to Just-Rite. The bounced check, which was to cover Just-Right’s

portion of a payment from Debcon, left Just-Rite with a large deficit from past

periods. Debcon ultimately wrote joint checks totaling $668,613.83, although the

agreement only required Debcon to pay $365,000 for materials supplied by JustRite. From the $602,216.38 of checks that Just-Rite concedes it endorsed, JustRite retained only $261,594.65 of the $355,578.97 it was owed. As a result, JustRite suffered a shortfall of $93,984.32.

A&R Supply of Mississippi(A&R), a division of Just-Rite,filed a complaint

in the United States District Court for the Southern District of Mississippi

against Allen’s, Debcon, and Travelers to recover this deficit. It alleged

violations of state law and the Miller Act. The district court granted summary

judgment in favor of A&R on its Miller Act claim against Travelers, and

Travelers timely appealed.

II

Travelers contends that the district court erroneously rejected its

affirmative defense of promissory estoppel. We review the district court’s grant

of summary judgment de novo, examining the record in the light most favorable

to the nonmoving party and drawing all inferences in its favor.3

The Miller Act requires recipients of certain government construction

projects to obtain a performance bond and a payment bond. The Act allows

suppliers of labor and materials to bring civil actions on the payment bond for

any amount unpaid after they complete their contractual obligations.4 The Act’s

purpose “‘is to protect those who furnish labor and material for public

construction and to insure that they will be paid for the same.’”5 The Miller Act
No. 07-60134

F.2d 917, 921 (10th Cir. 1957)).

6 United States for Use and Benefit of Clark-Fontana Paint Co. v. Glassman Constr. Co.,

397 F.2d 8, 10 (4th Cir. 1968) (quoting Clifford F. MacEvoy Co. v. United States, for Use and

Benefit of Calvin Tomkins Co., 322 U.S. 102, 107 (1944)).

7 See, e.g., United States for the Use and Benefit of Jinks Lumber Co. v. Fed. Ins. Co.,

483 F.2d 153, 157 (5th Cir. 1973); Freidrich Refrigerators, 441 F.2d at 783; Graybar, 387 F.2d

at 59-60.

8 See Freidrich Refrigerators, 441 F.2d at 783.

9

Id.

4

“is highly remedial in nature and is ‘entitled to a liberal construction and

application in order properly to effectuate the Congressional intent to protect

those whose labor and materials go into public projects.’”6

It is well settled that estoppel is a proper defense to a Miller Act claim.7

Under our precedent, a party asserting an estoppel defense must show that it

was misled to its detriment.8 Travelers argues that Just-Rite misled Debcon into

believing that Just-Rite would retain, or was retaining, payment from Debcon’s

checks. Travelers asserts that Just-Rite represented it would retain payment

by requiring and drafting a joint check agreement with the specified purpose of

providing Just-Rite adequate assurances of payment. According to Travelers,

“[b]y the joint agreement it drafted, Just Rite assured Debcon that Just Rite

would be paid.” Travelers also claims that Just-Rite represented it was being

paid by endorsing joint checks for roughly twice the value of the materials

supplied and the amount Debcon was required to pay under the joint check

agreement. It argues that these “endorsements . . . amounted to representations

that Just-Rite had been paid.”

We rejected a virtually identical contention in United States for Use of

Friedrich Refrigerators, Inc. v. Forrester.

9 We stated that the subcontractor’s
No. 07-60134

10 Id. at 782-83.

11 Id. at 782.

12 Id.

13 Graybar Elec. Co. v. John A. Volpe Constr. Co., 387 F.2d 55, 59 (5th Cir. 1967). 

5

request for the joint payment procedure did not constitute a waiver

of its rights under the Miller Act, but was simply a request for and

acceptance of additional security. Consequently, even the

acceptance by [the subcontractor] of the jointly made check offered

by [the contractor] would not have defeated recovery by [the

subcontractor] under the Miller Act, if [the subcontractor] in fact

remained unpaid (assuming [the subcontractor] had not also

executed a binding release or waiver of its Miller Act rights).10

Just-Rite’s endorsement of the joint checks was not a representation that it had

been paid. As noted above, a supplier’s request for a joint payment procedure is

a request for assurances of payment, which is normally construed as a request

to supplement its Miller Act rights.11 The request will only limit Miller Act

rights if it includes a “clear expression” of the supplier’s intent “to waive the

protection afforded by the Miller Act.”12 The facts here—including that the

supplier drafted the agreement, stated the agreement was for “adequate

assurance” of payment, endorsed checks of a value far exceeding its deficit, and

had authority under the agreement to sign on behalf of Allen’s and retain the

amounts it was owed—at most communicate a desire to supplement the Act’s

protections and an opportunity to retain payment. They do not represent that

Just-Rite retained payment from Debcon’s checks. 

Nevertheless, Travelers contends that the district court’s decision

contradicts the purpose of the Miller Act. Citing Graybar, it argues that the

Miller Act was “provided for the protection of the ‘innocent,’” and that Just-Rite

is not “innocent” because it could have retained enough to cover the amounts it

was owed.13
No. 07-60134

14 Id. at 60.

15 Id.

6

This argument is unpersuasive. Graybar involved a general contractor

that sought to protect its interests. Unlike some general contractors that “could

have done more to protect” themselves, the general contractor in Graybar “did

everything it reasonably could do to protect itself short of completely taking over

the operation of” its subcontractor.14 It is “[u]nder such circumstances” that a

general contractor may raise the defense of estoppel.15 Our review of the record

shows that unlike the general contractor in Graybar, Debcon did little to protect

its own interests. Debcon assented to the joint check agreement without

demanding an allocation of payment between labor and supplies or requiring

Just-Rite explicitly to waive its rights under the Miller Act. After the parties

signed the agreement, Debcon wrote checks without specifying the amount for

Just-Rite, requiring partial releases from Just-Rite, or verifying that Just-Rite

was retaining payment. Unlike Graybar, this case does not involve a culpable

supplier exploiting a general contractor that sought to protect its own interests.

For these reasons, Travelers has failed to show that A&R is equitably

estopped from bringing a Miller Act claim. 

III

Given that our longstanding Miller Act precedent favors Just-Rite,

Travelers invites us to reconsider our cases in light of the “realities of the

commercial construction industry.” It claims that contractors customarily use

joint checks to protect themselves. Travelers further asserts that its industry

follows a rule that “the maker of a joint check, which is subsequently endorsed

by the material supplier, is deemed to have paid the material supplier.”

According to Travelers, these factors “compel[] a re-evaluation of cases denying

a surety the defense of equitable estoppel in a Miller Act case.” 
No. 07-60134

16 Freidrich Refrigerators, 441 F.2d at 782-83.

17 Id. at 782-84 (citing United States for Use and Benefit of Clark-Fontana Paint Co. v.

Glassman Constr. Co., 397 F.2d 8, 11 (4th Cir. 1968)).

7

We are bound by Freidrich Refrigerators16 and have adopted the Fourth

Circuit’s reasoning in Glassman.

17 We may not reevaluate our precedent here.

Moreover, Travelers gives no reason why the construction industry is unable to

conform its practice to the law. As stated previously, Debcon could have

required Just-Rite explicitly to waive its Miller Act rights, sought periodic

partial releases from Just-Rite, or required Just-Rite to verify that it was

retaining payment. The other parties similarly could have acted to protect their

own interests. In fact, a representative of A&R gave deposition testimony that

A&R has already changed its joint-check policy as a result of this dispute.

Travelers has not shown that the commercial construction industry is incapable

of adapting to the decades-old precedent of this court. 

* * *

We AFFIRM the judgment of the district court.