UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 10-1375

AAROW EQUIPMENT & SERVICES, INCORPORATED, United States of 

America for the use and benefit of,

Plaintiff - Appellant,

v.

TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,

Defendant - Appellee.

Appeal from the United States District Court for the Eastern 

District of Virginia, at Alexandria. Anthony J. Trenga, 

District Judge. (1:09-cv-00861-AJT-TCB)

Argued: January 27, 2011 Decided: March 18, 2011

Before NIEMEYER, DAVIS, and KEENAN, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion.

ARGUED: Michael Jacob Kalish, WALSH COLUCCI LUBELEY EMRICH & 

WALSH, PC, Prince William, Virginia, for Appellant. James 

Dennis Coleman, WATT, TIEDER, HOFFAR & FITZGERALD, LLP, McLean, 

Virginia, for Appellee. ON BRIEF: Eugene Andrew Burcher, WALSH 

COLUCCI LUBELEY EMRICH & WALSH, PC, Prince William, Virginia, 

for Appellant.

Unpublished opinions are not binding precedent in this circuit.
2

PER CURIAM:

This appeal concerns an action brought by a subcontractor 

against a surety under the Miller Act (the Act), 40 U.S.C. §§ 

3131 through -3134. Under the Act, before a general contractor

is awarded a contract by the federal government in an amount 

greater than $100,000, the general contractor is required to 

obtain a “payment bond” “for the protection of all persons 

supplying labor and material in carrying out the work provided 

for in the contract.” 40 U.S.C. § 3131(b)(2). The Act provides

a cause of action, such as the one asserted here, permitting a 

subcontractor to file suit seeking payment from a surety on a

payment bond when the subcontractor has not been paid by the 

general contractor within 90 days of completing the 

subcontractor’s work. 40 U.S.C. § 3133(b)(1). For the reasons 

that follow, we vacate the district court’s award of summary 

judgment in favor of the surety and remand the case for further 

proceedings.

I.

We review the facts in the light most favorable to Aarow, 

the non-moving party in the district court. Hooven-Lewis v. 

Caldera, 249 F.3d 259, 265 (4th Cir. 2001). In 2007, Syska 

Hennessy Group Construction, Inc. (Syska) was awarded a contract 

(the prime contract) by the United States government (the 
3

government) to construct a training facility for the District of 

Columbia Army National Guard at Fort Belvoir, Virginia (the 

project). Syska served as the general contractor on the project 

and obtained a payment bond, as required by the Miller Act, from 

Travelers Casualty and Surety Company of America (Travelers). 

Syska awarded Aarow Equipment & Services, Inc. (Aarow) a 

subcontract, which set forth the “work” that Aarow was required 

to perform on the project. 

Section 11.1 of the subcontract stated that Syska may “make 

changes in the [w]ork covered by this [s]ubcontract,” and that 

any changes must be made in writing. The subcontract also 

provided that Aarow must submit in writing to Syska any claims 

for changes in the price or payment due under the contract. 

According to the subcontract, any such change in price or 

payment to Arrow “shall be made” “only to the extent that” Syska 

is entitled to relief from the government, and payment to Aarow

shall be equal to Aarow’s share of any adjustment to the prime 

contract. 

When changes to the “work” under the subcontract were made, 

Aarow generally submitted the proposed cost of the change to 

Syska, and Syska issued a “change order” to the subcontract. 

Aarow’s “work” described in the subcontract included several 

categories of responsibilities, including “earthwork” relating 

to water distribution and drainage. During Aarow’s performance 
4

of this “earthwork,” the government determined that the “erosion 

control plan” Aarow was implementing was “not up to 

standard[s].” Aarow ceased working until it received new 

erosion plan “drawings,” which required the construction of 

sedimentary ponds and other water management measures (the pond 

work). 

Aarow and Syska agreed that the pond work was not included 

in the “work” defined in the subcontract. In September 2007, 

Aarow submitted a proposal of $402,500 to Syska for the pond 

work. Syska directed Aarow to perform the pond work, but did

not issue a “change order” for the pond work at that time.

Aarow completed the pond work, with the understanding that Syska 

would issue a “change order” at some point in the future. 

Upon Syska’s determination that the pond work was not 

included in the scope of the prime contract,1 Syska asked that 

the government agree to a “modification” of the prime contract.2

 1 The record does not contain a copy of the prime contract, 

and there were no depositions taken during discovery in this 

case of the government officials involved with the prime 

contract. 

 

Syska requested that Aarow wait to submit its invoice for the 

2 According to deposition testimony provided by a Syska 

employee, a “modification” is essentially the same as a “change 

order,” except that the prime contract was amended by a 

“modification,” while the subcontract was amended by a “change 

order.” 
5

pond work until after the government issued a “modification” to 

the prime contract and Syska issued a “change order” to the 

subcontract. 

Several months later, neither a “modification” nor a 

“change order” had been issued. Nevertheless, Aarow submitted 

an invoice to Syska for the completed pond work. Syska 

instructed Aarow to use a billing procedure that would allow 

Syska to pay Aarow for the pond work even though a “change 

order” had not been issued. This billing procedure required 

Aarow to list the pond work under a “line item” designated for 

certain “finishing” work on the project that had not yet been 

completed.3

After Aarow complied with this different billing procedure

in accordance with Syska’s directions, Syska submitted a similar

invoice to the government identifying the pond work as 

“finishing” for a “three-story building.” The government paid 

Syska $484,980, which included the invoice in the amount of 

$402,500 submitted by Aarow, plus a fee representing Syska’s 

“normal markup.” Syska, in turn, paid Aarow $402,500 for the 

 According to Syska, the government had authorized 

this billing procedure while Syska’s “modification” request was 

pending. 

 3 The “finishing” work was included in the “work” described 

by the subcontract. 
6

pond work. Syska advised Aarow that after Syska received a 

“modification” and issued a “change order,” Aarow could 

reallocate the funds received for the pond work to the proper

“line item.” Shortly after the government paid Syska the 

requested amount of $484,980, the government determined that the 

pond work was included in the prime contract. Accordingly, the 

government denied Syska’s request for a “modification” of the 

prime contract based on the government’s construction of the 

prime contract’s terms.

The government later withheld several payments to Syska to 

recover the funds previously paid for the pond work. In 

response, Syska withheld payment from Aarow for other work 

completed by Aarow between May 2009 and June 2009. 

On July 1, 2009, Aarow sent Syska a letter stating that 

Syska had a “significant outstanding and past balance due,” and 

that Aarow would stop work on the project at the end of the week 

unless payment was made. When Syska did not submit payment to 

Aarow under the terms of the demand, Aarow ceased work on the 

project. 

On July 17, 2009, Syska sent Aarow a letter notifying Aarow 

that it was in default of the subcontract for failing “to

proceed with the work” according to the project schedule. In 

that letter, Syska instructed Aarow to correct and complete 

specific alleged defaults. Aarow did not return to work on the 
7

project or otherwise attempt to cure the alleged defaults. On 

July 23, 2009, Syska sent another letter to Aarow stating that 

because Aarow had not cured the defaults, Syska was terminating

the subcontract as provided in Section 12.1 of that agreement. 

Section 12.1 of the subcontract stated, in relevant part:

If, in the opinion of [Syska], [Aarow] shall at any 

time . . . fail in any respect to prosecute the Work 

according to the current schedule. . . then, after 

serving three (3) days written notice, unless the 

condition specified in such notice shall have been 

eliminated within such three (3) days, [Syska] may at 

its option . . . terminate the Subcontract for default

. . . . [Aarow] shall not be entitled to receive any 

further payment until the Work shall be fully 

completed and accepted by [the government]. 

Under Section 12.2 of the subcontract, however, if Syska 

wrongfully terminated the subcontract, Syska would be liable for 

“the reasonable value of [the] Work performed by [Aarow] prior 

to [Syska’s] wrongful action.” 

With regard to payment, the subcontract required that Syska 

pay Aarow monthly, provided that Syska already had received 

payment from the government. This “pay-when-paid” provision

stated, in relevant part:

Conditioned upon the satisfactory progress of [Aarow], 

compliance with the documentation requirements of this 

Subcontract, and [Syska] has received payment from the 

[government] THEN [Syska] will make monthly payments 

to [Aarow]. [Aarow] acknowledges and agrees that in 

the event payment is not made to [Syska] for any 

reason . . . [Aarow] shall look exclusively to [the 

government] for payment of any and all funds due under 

this Contract. [Aarow] further agrees that the delay 

in payment or nonpayment by the [government] does not 
8

create any separate obligation of [Syska] to pay 

regardless of the extent of the delay. 

In its complaint filed against Travelers, the surety on 

Syska’s payment bond, Aarow asserted that Syska breached the 

subcontract by failing to pay Aarow for several months. Aarow 

sought from Travelers the sum of Aarow’s past-due invoices to 

Syska, in the amount of $484,870.71. 

In response, Travelers filed an answer and a motion for 

summary judgment. Aarow opposed the motion, and the parties 

filed a series of briefs addressing numerous issues. In 

December 2009, the district court held a hearing on the motion 

for summary judgment. 

In its pleadings and during the hearing, Travelers asserted 

two primary arguments in support of its motion. Travelers first 

maintained that because the terms of the “pay-when-paid” 

provision in the subcontract were clear and the government did 

not pay Syska for several months, Syska did not breach its 

payment obligation to Aarow under the subcontract. Travelers 

thus contended that Syska properly terminated the subcontract 

under Section 12.1 based on Aarow’s failure to perform, and that 

Aarow was not entitled to payment under the terms of Section 

12.1. Travelers argued alternatively that even if Syska 

wrongfully had terminated the subcontract, Syska paid Aarow more 
9

than Aarow was due under the subcontract and, therefore, Aarow 

was not entitled to additional payment. 

Two months after the hearing, but before the district court 

entered its judgment, Travelers requested leave to supplement 

its motion for summary judgment to discuss a new decision issued 

by this Court. In that supplemental pleading, Travelers argued 

that under this Court’s decision in Universal Concrete v. Turner 

Construction Co.

Aarow filed a brief in response, arguing that the holding 

in 

, 595 F.3d 527 (4th Cir. 2010), “pay-when-paid”

provisions are valid defenses in a breach of contract action 

when the terms of such provisions are unambiguous. 

Universal Concrete did not establish a new principle of law. 

(J.A. 649.) Aarow also cited in its supplemental brief the 

“prevention doctrine,” a principle of contract law establishing 

that one who prevents the performance or the happening of a 

condition to his performance may not take advantage of that 

condition. See Barnhill v. Veneman, 524 F.3d 458, 474 (4th Cir. 

2008). Aarow contended that this doctrine barred Syska from 

relying on the “pay-when-paid” provision of the contract because 

Syska was partially at fault for the government’s failure to 

make the requested payment to Syska. Aarow argued that Syska’s 

fault was demonstrated by its failure to obtain the appropriate 

“modification” to the prime contract, and by its failure to 

issue a “change order” to the subcontract for the pond work. 
10

The district court entered an order permitting both parties to 

supplement the record with these pleadings. 

Three weeks later, the district court entered an order 

granting summary judgment in favor of Travelers. In its 

memorandum opinion, the district court held that because the 

subcontract contained an enforceable “pay-when-paid” provision,

and because it was undisputed that the government failed to pay 

Syska for several months, Aarow was unable to “justify its 

[w]ork stoppage based on Syska’s failure to pay Aarow.” 

Notably, the district court did not address Aarow’s prevention 

doctrine argument.

The district court concluded that Syska’s “termination for 

default” was proper under Section 12.1 of the subcontract based 

on Aarow’s failure to complete its work under the subcontract. 

Accordingly, the district court held that Aarow was not owed

payment under the subcontract and that, therefore, Travelers had 

“no payment obligation to Aarow.” Aarow filed a timely appeal 

in this court. 

II.

We review the district court’s award of summary judgment de 

novo. See S.C. Green Party v. S.C. State Election Comm’n, 612 

F.3d 752, 755 (4th Cir. 2010). Under Rule 56(a) of the Federal 

Rules of Civil Procedure, summary judgment is appropriate when 
11

the moving party “shows that there is no genuine dispute as to 

any material fact” and when the moving party “is entitled to 

judgment as a matter of law.” Fed. R. Civ. P. 56(a); see

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986) 

(construing former Rule 56(c) of the Federal Rules of Civil 

Procedure). 

A.

Aarow argues on appeal that the district court erred in 

failing to apply the prevention doctrine in determining whether 

Travelers was entitled to judgment as a matter of law. Aarow 

asserts that Syska was responsible for the government’s failure 

to make the requested payment under the prime contract. 

Therefore, according to Aarow, a jury should determine whether 

Syska breached the terms of the subcontract by failing to pay 

Aarow for the work it had completed.

In response, Travelers argues that the district court 

properly granted summary judgment in its favor. Initially, 

Travelers contends that Aarow’s prevention doctrine argument was 

not asserted timely and should not be considered in the 

resolution of this appeal. Addressing the merits of Aarow’s 

argument, Travelers asserts that because the government withheld 

payment from Syska, the terms of Syska’s subcontract with Aarow 

permitted Syska to withhold the requested payment to Aarow. 
12

Travelers therefore maintains that, as a matter of law,

Travelers did not owe any payment to Aarow under the bond

because Syska complied with the terms of the subcontract and 

Aarow wrongfully abandoned the project. We disagree with 

Travelers’ arguments. 

We find no merit in Travelers’ assertion that Aarow failed 

to preserve its prevention doctrine argument in the district 

court. Although Aarow used the term “prevention doctrine” for 

the first time in a later-filed supplemental pleading, the 

district court accepted that supplemental pleading and included

it in the record three weeks before the court rendered its 

judgment. Furthermore, in Aarow’s initial brief opposing 

summary judgment, Aarow set forth the factual predicate for its

prevention doctrine argument by asserting that Syska directed 

Aarow to complete the pond work before issuing a “change order”

for that work, and that Syska acted in bad faith by attempting 

to “back charge” Aarow for the pond work. Thus, we conclude 

that Aarow’s prevention doctrine argument was presented 

adequately to the district court and was not, as Travelers 

argues, articulated for the first time on appeal. See Evans v. 

Metro. Life Ins. Co., 358 F.3d 307, 310 n.2 (4th Cir. 2004)

(explaining that although appellant’s argument was not raised in 

district court until oral argument on the motion for summary 

judgment, the argument was preserved for appellate review). 
13

B.

We turn to examine the present record to determine whether 

Travelers was entitled to judgment as a matter of law at the 

summary judgment stage of the proceedings. Based on Aarow’s 

argument before the district court, we give particular 

consideration to the evidence before the district court bearing 

on the issue of the prevention doctrine. 

Under the prevention doctrine, when a general contractor 

materially contributes to the failure of a condition limiting 

the duty to perform under a contract, the general contractor may 

not rely on that failure as a defense to its performance of its 

contractual obligations. See Moore Bros. Co. v. Brown & Root, 

Inc., 207 F.3d 717, 725 (4th Cir. 2000). In Moore Brothers, we 

applied the prevention doctrine in a dispute involving a “paywhen-paid” provision in a subcontract. There, in response to 

two subcontractors seeking payment for completed work, the 

general contractor asserted as a defense the “pay-when-paid” 

condition in the subcontract and the owner’s failure to pay the 

general contractor. Id.

We affirmed the district court’s award of summary judgment 

in favor of the subcontractors because the record established 

that the general contractor materially contributed to the 

owner’s failure to pay.

at 724-25. 

Id. at 725-26. Thus, we concluded that 

the general contractor was liable to its subcontractors for 
14

payment notwithstanding the “pay-when-paid” provision in the 

subcontract. Id. at 725. Applying our analysis in Moore 

Brothers

Travelers maintains that the government directed the method 

of billing for the pond work and that, therefore, Syska was not 

responsible for the government’s refusal to pay Syska when the 

government later determined that the billing for the pond work 

was improper. In support of its position, Travelers relies on 

the deposition testimony of Robert F. Geremia, Syska’s vice 

president in charge of construction, who stated that the 

government had “instructed my people in the field to bill for 

some [finishing] work that actually wasn’t done.” 

to the present case, we consider whether a jury 

reasonably could find that Syska’s actions materially 

contributed to the government’s failure to pay Syska under the 

prime contract, thereby preventing Travelers from relying on the 

“pay-when-paid” condition in the subcontract in defense of 

Syska’s failure to pay Aarow. 

Aarow, however, asserts that Syska’s actions materially 

contributed to the government’s failure to make the payment at 

issue. Aarow points to evidence in the record that Syska 

directed Aarow to perform the pond work even though Syska had 

not issued a “change order” or received a “modification” to the 

prime contract. The record also contains evidence that Aarow 

completed the pond work, relying on Syska’s promise that a 
15

“change order” was forthcoming. However, when Syska did not 

obtain a “change order,” Syska directed Aarow to remove its 

invoice references to “sediment ponds and associated work,” and 

to categorize the pond work as “finishes” for a “three-story 

building,” which had not yet been constructed. 

Based on these facts, a jury reasonably could return a 

verdict for Aarow if the jury concluded that Syska’s actions, in 

directing Aarow to perform the pond work before issuing a 

“change order,” and in agreeing to employ an arguably improper

billing procedure that obscured the expanded scope of the “work” 

under the subcontract, materially contributed to the 

government’s later decision to withhold certain payments to 

Syska. If Syska’s actions materially contributed to the 

government’s decision, Travelers could not rely on the “paywhen-paid” provision of the subcontract to excuse Syska’s

failure to pay Aarow for its work performed under the 

subcontract. See Moore Bros.

We are not persuaded by Travelers’ assertion that it was 

entitled to summary judgment based on Geremia’s testimony that 

the government instructed Syska to employ the questionable 

billing procedure. In essence, Travelers seeks to absolve Syska 

of any responsibility for the arguably improper billing 

procedure because “the project owner told us to do it.” The 

allocation of responsibility for the billing practices, however, 

, 207 F.3d at 725. 
16

raises credibility issues and other issues of fact that are 

matters for a jury’s consideration. Therefore, we hold that 

Travelers was not entitled to summary judgment on the issues

whether Syska breached the subcontract and whether Aarow was 

entitled to payment from Travelers under the bond.4

For these reasons, we conclude that the district court 

erred in granting summary judgment in favor of Travelers. 

Accordingly, we vacate the district court’s judgment and remand 

the case for further proceedings consistent with this opinion.

 

VACATED AND REMANDED

 

 4 Based on our holding, we do not address Aarow’s remaining 

argument regarding the issue whether the district court erred in 

relying on letters from Syska’s counsel to Aarow relating to 

Syska’s termination of the subcontract. We also need not 

address Aarow’s contention that the district court’s judgment 

violated the policy underlying the Miller Act.