Case Name: PI-CON, INC v. A J ANDERSON CONSTRUCTION COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1990-07-30
Citations: 435 Mich. 375
Docket Number: Docket No. 83682
Parties: PI-CON, INC v A J ANDERSON CONSTRUCTION COMPANY
Judges: Levin, Cavanagh, and Griffin, JJ., concurred with Archer, J.
Reporter: Michigan Reports
Volume: 435
Pages: 375–407

Head Matter:
PI-CON, INC v A J ANDERSON CONSTRUCTION COMPANY
Docket No. 83682.
Argued October 4, 1989
(Calendar No. 3).
Decided July 30, 1990.
Pi-Con, Inc., brought an action in the Wayne Circuit Court against A. J. Anderson Construction Company, a general contractor, and Federal Insurance Company, its surety, seeking to recover on a public works payment bond the cost of materials and services provided to Brian & Gregory Contracting Company, Anderson’s subcontractor, for a construction project, after Brian & Gregory filed bankruptcy. The court, Charles Kaufman, J., granted summary judgment for the plaintiff on the basis that Anderson had actual notice of Pi-Con’s work on the project even though the statutory thirty-day notice was sent by ordinary first-class mail and not by certified mail as required by MCL 129.207; MSA 5.2321(7). The Court of Appeals, Mackenzie, P.J., and Doctoroff and P. J. Clulo, JJ., reversed, holding that mailing notice by regular mail, despite evidence of actual notice, did not satisfy the statute and that strict compliance of the notice requirements is required (Docket No. 95471). The plaintiff appeals.
In an opinion by Justice Archer, joined by Justices Levin, Cavanagh, and Griffin, the Supreme Court held:
A claimant on a public works bond may maintain an action on the bond upon establishing that the principal contractor actually received timely written notice of materials furnished, the labor performed, the party contracting for the labor or materials, and the site for performance or delivery. A failure to send notice by certified mail as prescribed by MCL 129.207; MSA 5.2321(7) will not preclude recovery, and the claimant may prove the principal contractor’s actual receipt of timely notice by a preponderance of the evidence.
1. Notice under MCL 129.207; MSA 5.2321(7) is intended to inform a principal contractor of a subcontractor’s involvement in a project before or soon after the commencement of that involvement, so as to ensure knowledge regarding any possible claims to which the principal contractor’s public works bond may be subjected. As long as timely written notice is received by the principal contractor, there is compliance with that intent. Insistence that notice be made only by certified mail is hypertechnical, exalting form over substance. The public works bond act regulates the manner, and not the method or proof, of delivery. The requirement is substantive, intended to ensure actual receipt of notice, and not to qualify the right to sue on the manner or proof of delivery.
References
Am Jur 2d, Notice §§ 28, 34, 42.
See the Index to Annotations under Notice.
2. In this case, summary disposition for either party under MCR 2.116(CX10) is inappropriate because of the existence of a dispute regarding whether notice actually was received, a material fact. The plaintiff is entitled to a tried to resolve the dispute.
Justice Levin, writing separately, stated that on remand the scope of inquiry should be broadened to include consideration of whether the general contractor paid the subcontractor for labor and material supplied by the plaintiff before the plaintiff served the general contractor with notice that it intended to rely on its rights under the public works bond act.
Pi-Con claims that the thirty-day notice was actually received. Pi-Con may prevail on that basis on remand. If, however, it is decided on remand that the notice was not actually received, that should not be determinative if notice of the claim reached Anderson before it paid Brian & Gregory for labor and materials supplied by Pi-Con.
Reversed and remanded.
Chief Justice Riley, joined by Justices Brickley and Boyle, dissenting, stated that pursuant to MCL 129.207; MSA 5.2321(7), in order to recover on a public works payment bond given by a principal contractor, a subcontractor-claimant must send by certified mail, and the principal contractor receive, timely written notice of the furnishing by the subcontractor of materials or labor. Compliance with the certified mail requirement should be excused only where a genuine issue of material fact does not exist regarding whether the principal contractor received timely written notice under the payment bond statute.
Fleisher Engineering & Construction Co v United States, 311 US 15 (1940), interpreting the Miller Act, 40 USC 270b, the federal counterpart of MCL 129.207; MSA 5.2321(7), requires a subcontractor to prove that the principal contractor received written notice within the time prescribed by the statute and not merely that the principal contractor had notice. Fleisher excuses compliance with the certified mail requirement only where a genuine issue of material fact does not exist regarding whether the principal contractor received written notice within the time prescribed by the payment bond statute. Although it makes little sense under Fleisher to adhere to the certified mail requirement when the contractor concedes it received written notice, it does not also follow that the terms of the statute should be ignored completely and a trial on the merits be required every time a subcontractor contends that it sent timely written notice by means other than certified mail. To do so would emasculate the statute’s certified mail requirement and render it nugatory.
Timely written notice is a condition precedent under MCL 129.207; MSA 5.2321(7). Subsequent case law interpreting the Miller Act or MCL 129.207; MSA 5.2321(7) and the legislative history of the notice provision lead to the conclusion that in the absence of timely written notice by certified mail a subcontractor must prove that it sent, and that the principal contractor actually received, timely written notice. However, a claimant should not be permitted to circumvent the certified mail requirement and survive a motion for summary disposition simply by alleging that it sent, and the principal contractor received, timely written notice. Rather, if a genuine issue of material fact exists regarding whether the principal contractor received written notice within the time period prescribed by the statute, the claimant should not be permitted to recover on the bond.
169 Mich App 389; 425 NW2d 563 (1988) reversed.
Bonds — Public Works — Subcontractors — Notice.
A claimant on a public works bond may maintain an action on the bond upon establishing that the principal contractor actually received timely written notice of materials furnished, the labor performed, the party contracting for the labor or materials, and the site for performance or delivery; a failure to send notice by certified mail as prescribed by the public works bond act will not preclude recovery, and the claimant may prove the principal contractor’s actual receipt of timely notice by a preponderance of the evidence (MCL 129.207; MSA 5.2321[7]).
Goldstein, Serlin, Reizen, Rosenbaum & Baker, P.C. (by Barry M. Rosenbaum and Richard E. Baker), for the plaintiff.
Mager, Monahan, Donaldson & Alber (by Lita Masini Popke) for the defendants.

Opinion:
Archer, J.
At issue is whether the plaintiff, Pi-Con, Inc., who furnished materials and services to a subcontractor on a public works project, may recover money owed for those materials and services under the provisions of a public works payment bond, where the notice of furnishing materials and services was sent to defendant general contractor, A. J. Anderson Company, by ordinary mail, but not, as required by statute, by certified mail.
We hold that, so long as Pi-Con timely sent notice which otherwise complies with the notice requirements of the public works bond act, MCL 129.207; MSA 5.2321(7), and Pi-Con proves by a preponderance of the evidence that Anderson timely received notice, Pi-Con's failure to send notice via certified mail will not preclude recovery on the bond.
i
Pi-Con entered into a contract with Brian & Gregory Contracting Company, a subcontractor of Anderson, to furnish materials and services for a construction project at Cass Technical High School in Detroit for which Andérson was the general contractor. The contract between Pi-Con and Brian & Gregory is dated November 4, 1982. Pi-Con asserts that it began furnishing materials and services pursuant to the contract on November 22, 1982.
The statute provides that a claimant not having a direct contractual relationship with a general contractor shall not have a right of action upon a public works payment bond unless two written notices are served, the first within thirty days after the first furnishing of materials or labor, and the second within ninety days of the last furnishing of materials or labor.
The statute further provides that the notices "shall be served by mailing the same by certified mail."
Pi-Con claimed in its affidavit in support of its motion for summary disposition that it mailed notice to Anderson and the Detroit Board of Education, with a copy to Brian & Gregory, on Decem ber 15, 1982, advising that Pi-Con was supplying materials and services to Brian & Gregory for the Cass Technical project. The notice was sent by ordinary first-class mail and not, as required by the statute, by certified mail. Anderson asserts that a copy of the December 15 notice could not be found in Anderson's file, and alleges it never received it.
Pi-Con, on September 6, 1984, within ninety days of the last furnishing of materials or labor, notified Anderson and the school board by certified mail that Brian & Gregory owed Pi-Con $25,140.
Brian & Gregory had by then filed for bankruptcy. This action was commenced to recover on the payment bond. The circuit court granted Pi-Con's motion for summary judgment on the basis that Anderson had actual notice of Pi-Con's work on the Cass Technical project.
The Court of Appeals reversed, holding, in reliance on decisions of that Court, "that mailing notice by regular mail, despite evidence of actual notice, does not satisfy the statute and that strict compliance with the statute's notice requirements is required." We reverse.
ii
We are guided by the decision of the United States Supreme Court in Fleisher Engineering & Construction Co v United States ex rel Hallenbeck, 311 US 15; 61 S Ct 81; 85 L Ed 12 (1940). There, in an action brought on behalf of a subcontractor against the principal contractor to recover on a public works payment bond, the Court held that where actual receipt of the notice and the sufficiency of its statements had not been challenged, the failure to send notice by registered mail would not prevent recovery on the bond.
Fleisher construed the Miller Act, 40 USC 270b(a), the federal public works bond on which Michigan's statute is modeled. The notice requirements of the Miller Act are nearly identical with those of the statute at issue here, except the federal statute requires notice to the general contractor of a public works project only once, within ninety days from the date on which the subcontractor completes its work.
The Supreme Court held that substantial compliance with the notice requirements was sufficient to perfect an action on the bond:
We think that the purpose of this provision [notice by certified mail requirement] as to manner of service was to assure receipt of the notice, not to make the described method mandatory so as to deny right of suit when the required written notice within the speciñed time had actually been given and received. In the face of such receipt, the reason for a particular mode of service fails. It is not reasonable to suppose that Congress intended to insist upon an idle form. Rather, we think that Congress intended to provide a method which would afford sufficient proof of service when receipt of the required written notice was not shown. [Fleisher, supra at 19. Emphasis added.]
We agree. Applying Fleisher's reasoning to Michigan's public works bond statute as illuminated by prior case law, we hold that a claimant on a bond may maintain an action on the bond upon establishing compliance with four substantive elements of the notice provisions of MCL 129.207; MSA 5.2321(7). First, a claimant must prove that the principal contractor actually received notice. Second, the notice must relate "the nature of the materials being furnished or to be furnished, or labor being performed or to be performed and identify[] the party contracting for such labor or materials and the site for the performance of such labor or the delivery of such materials . . . ." Third, the notice sent must have been written. Fourth, the notice must have been received within the time limits prescribed by the statute.
This Court established the fourth element in People ex rel Wheeling Corrugating Co v W L Thon Co, 307 Mich 273; 11 NW2d 886 (1943). In that case we denied recovery to a claimant who was sixty days tardy in giving notice of the completion of its work, holding that the time limits contained within the public works bond act were mandatory. Cf. People ex rel Chasteen v Michigan Surety Co, 360 Mich 546; 104 NW2d 213 (1960).
As to the third element, this Court established in People ex rel F Yeager Bridge & Culvert Co v Cooke Contracting Co, 372 Mich 563; 127 NW2d 308 (1964), that provision of written notice was required under the statute. "Mere knowledge by a surety that a certain party had furnished materials is insufficient notice." Id. at 565. See also Square D Environmental Corp v Aero Mechanical, Inc, 119 Mich App 740; 326 NW2d 629 (1982). Federal courts interpreting the Miller Act have also held that for a notice to a contractor to be sufficient, it must be written. See, e.g., United States ex rel Excavation Construction, Inc v Glenn-Stewart-Pinckney Builders & Developers, Inc, 388 F Supp 289, 296-297 (D Del, 1975).
The second element, regarding the detail required in the notice, was clarified in Wheeling, where this Court stated that conversations between the general contractor and the surety regarding the several parties furnishing materials on the project could not fulfill the notice requirement. The conversations did not comply with the notice requirement because they were "of a very general nature . . . with nothing specific being said as to the amount or character of any of these claims." Wheeling at 277.
We look to Fleisher in establishing the first element, that the principal contractor must actually receive notice in order, for a claimant to perfect its right on the bond. Fleisher determined that the purpose behind the Miller Act's provisions regarding the method of mailing notice "was to assure receipt of the notice . . . ." Id. at 19.
The purpose behind the thirty-day notice required by MCL 129.207; MSA 5.2321(7) is to provide principal contractors with detailed notice of a subcontractor's involvement on a project before, if not soon after, the commencement of that involvement. Such notice is necessary to ensure principal contractors knowledge regarding any possible claims to which their bonds might later be subjected and to assure that principal contractors are not prejudiced by having to pay out of a bond for labor or materials performed by third parties after already paying their subcontractors for that same labor or materials. So long as the principal contractors receive notice, the intent of the Legislature is fully complied with. To insist that the notice be given by certified mail would require insisting on "idle form." Fleisher at 19.
hi
We further hold that Pi-Con is allowed to prove Anderson's actual receipt of timely written notice by a preponderance of the evidence.
It is possible to limit the rule of Fleisher to its facts and hold that the certified mailing requirement is not strictly required only when the principal contractor does not dispute receiving the notice. We decline to read Fleisher that narrowly and note that federal courts interpreting the Miller Act's notice requirements after Fleisher have similarly rejected such a reading.
In United States ex rel Birmingham Slag Co v Perry, 115 F2d 724 (CA 5, 1940), the court held that the claim of a . supplier of materials was not barred where the trial court found as fact that the principal contractor received notice of the supplier's claim in a letter the contractor received, through ordinary mail, from the government agency paying for the construction project. In National State Bank of Newark v Terminal Construction Corp, 217 F Supp 341, 355 (D NJ, 1963), the defendant principal contractor denied receiving notice as required by a bond, but the court held, citing Fleisher, "[although the bonds require that the notice be sent by registered mail, this is not necessary if the claimant can show that the notice was actually received." In Glenn-StewartPinckney, supra, and United States ex rel Twin Co Transit Mix, Inc v R P McTeague Construction Corp, 264 F Supp 619 (ED NY, 1967), the courts held that where receipt of notice is denied, claimants may prove receipt in the same manner as any other fact so long as they sustain their burden of proof by a preponderance of the evidence. Cf. Coffee v United States ex rel Gordon, 157 F2d 968 (CA 5, 1946).
The dissent argues that, in order for the plaintiff to maintain an action on the bond, it must either comply with the certified mailing requirement or present some other proof that would foreclose the existence of a genuine factual dispute regarding receipt of the notice. The dissent claims such an interpretation is necessary to prevent rendering the certified mailing requirement "nugatory." Post, p 406.
However, the dissent's interpretation itself would render the certified mailing requirement nugatory, because it would impose a hypertechnical requirement elevating form over substance. The dissent's reasoning appears to be grounded in the belief that the certified mailing requirement is entirely procedural, designed to control the nature and quality of proofs in any action on the bond. Instead of finding any substantive purpose in the certified mail requirement, the dissent concludes that it is intended to require uncontrovertible proof of the general contractor's receipt.
The dissent, in our view, is wrong in this regard. Had the Legislature desired a procedure whereby it could conclusively be established that defendant received plaintiff's notice, it would have required notice be sent certified mail with return receipt requested. Certified mailing alone does not guarantee the retention of records of delivery, because the United States Postal Service retains such records for only two years. By requiring notice be sent return receipt requested, on the other hand, the Legislature could have ensured that all claimants on bonds always had proof of delivery. Likewise, had the Legislature intended solely to control the manner of proof of receipt, it could have drafted a statute which required claimants to prove receipt of notice by means of postal records of certified mail delivery. Thé statute at hand, however, regulates the manner of delivery, not the method of proof of delivery.
We view the certified mail requirement as substantive. The Legislature, recognizing the vagaries of ordinary first-class mail, required certified mailing as a way to better ensure actual receipt of the notice. The Legislature intended to protect public works bonds from claims by materialmen and subcontractors of whose participation on the project the general contractor was not notified; it mandated a more certain form of postage to specify that first-class mailing was inadequate, not to control the form of proof of receipt in any subsequent actions on the bond. As the Court stated in Fleisher: "We think that the purpose of this provi sion as to manner of service was to assure receipt of the notice . . . ."311 US 19. (Emphasis added.)
Because we agree with the Supreme Court that the certified mail requirement is intended to ensure actual receipt and not to qualify the right to sue on a manner of delivery or proof of delivery, we hold that the plaintiff has a right to prove actual receipt of notice by a preponderance of the evidence. Such a rule furthers the substantive purpose of the notice requirement and prevents a danger which the dissent's rule would allow. Under the rule advocated by the dissent, general contractors could defeat legitimate claims on public works bonds where the claimants fail to send otherwise sufficient notice by certified mail by simply raising a factual dispute regarding receipt of the notice. Allowing contractors such a trump card would run contrary to the ultimate purpose of the public works bond act, the protection of subcontractors and suppliers of materials.
IV
Given the procedural posture of this case, we remand to allow the plaintiff a chance to prove by a preponderance of the evidence that Anderson received timely, written, and sufficient notice of Pi-Con's participation in the Cass Tech project.
The trial court granted the plaintiff's motion for summary disposition under MCR 2.116(0(10), finding that there was no genuine issue with regard to any material fact and that plaintiff was entitled to judgment as a matter of law. The trial court never made a finding regarding whether the defendant ever actually received the notice which the plaintiff claims to have sent. In fact, counsel for the plaintiff conceded at the hearing on the summary disposition motion that "maybe there is an issue of fact as to whether [Anderson] received a notice." The trial court's ruling, therefore, is based on its holding that Anderson's mere knowledge of Pi-Con's participation in the construction project, coupled with Anderson's assertion that it mailed the notice, constituted sufficient substantial compliance with the notice requirement.
The Court of Appeals reversed the decision of the trial court, and took the extra step of ordering summary judgment for the defendant under MCR 2.116(0(10). The Court concluded that the statute required strict compliance and that the plaintiff's claim was unperfected as a matter of law because of the failure to send the notice via certified mail.
Granting summary disposition for either party under MCR 2.116(0(10) is inappropriate because of the existence of a dispute regarding the material fact whether notice was actually received. Pi-Con, therefore, is entitled to a trial to resolve this issue. We reverse the judgment of the Court of Appeals and remand the case to the trial court for proceedings consistent with this opinion.
Levin, Cavanagh, and Griffin, JJ., concurred with Archer, J.
Levin, J.
(separate statement). The statute provides in effect that an unpaid subcontractor, laborer, or supplier of materials shall have a direct right of action against the general contractor and its surety for the amount owing for labor and materials supplied for the undertaking of the general contractor although the unpaid subcontractor, laborer, or supplier does not have a direct contractual relationship with the general contractor.
The statute provides, however, that such an unpaid claimant "shall not have a right of action" unless a written notice is served on the general contractor within thirty days after the first furnishing of labor or materials and another written notice is served on the general contractor and the governmental unit within ninety days of the last furnishing of labor or materials.
I have signed the opinion of the Court because I agree that summary disposition was inappropriate in the circumstance that there was a dispute regarding the material fact whether the notice required to be given within thirty days was actually received.
1 write separately because I would broaden the scope of the inquiry on remand to include consideration of whether Anderson paid Brian & Gregory for labor and materials supplied by Pi-Con before Pi-Con served notice on Anderson that it intended to rely on its rights under the statute.
Pi-Con claims that the thirty-day notice was actually received. Pi-Con may prevail on that basis on remand. If, however, it is decided on remand that the notice was not actually received, that should not be determinative if notice of the claim reached Anderson before it paid Brian & Gregory for labor and materials supplied by Pi-Con. _
The policy of the statute is that if the funds remaining owing by the general contractor (Anderson) to the subcontractor (Brian & Gregory) under their contractual arrangements are insufficient to pay an unpaid claimant (Pi-Con) because of vicissitudes of the job or of the general contractor/subcontractor contractual relationship, the loss is allocated to the general contractor. The loss is allocated to the unpaid claimant if the general contractor pays the subcontractor for labor and materials supplied by the unpaid claimant before the unpaid claimant served notice under the statute on the general contractor.
i
I agree with my colleagues that notice must be served before an unpaid claimant may maintain an action. Unless the requisite notices shall have been served within the thirty- or ninety-day periods, the general contractor (Anderson) is at liberty thereafter to pay a subcontractor (Brian & Gregory) with whom it does have a direct contractual relationship amounts owing an unpaid claimant (Pi-Con).
Requiring Anderson to pay Pi-Con may very well mean that Anderson would be required to pay more in respect to its contract with Brian & Gregory than it contracted to pay. That might result, however, because Brian & Gregory was unable to obtain the supply of labor and materials within the amount it bid for the job either because it bid too low, misadventure on the job, unanticipated contingencies, or other circumstances.
The statute provides a right of direct recovery by the unpaid claimant against the general contractor and its surety without regard to whether there is sufficient money owing by the general contractor to the subcontractor to pay the unpaid claimant in full.
The statute thus imposes, for the benefit of the unpaid claimant, on the general contractor the risks or loss resulting from the vicissitudes of the job and of general contractor/subcontractor contractual relationships. Loss so resulting cannot, consistent with the policy of the statute, be shifted to the unpaid claimant because of inconsequential delay in serving notice of claim.
It might be argued that the statute allocates such risks to the general contractor only for the benefit of an unpaid claimant who serves timely notice. Such literalism ignores the apparent policy of allocating the risks of loss resulting from vicissi tudes of the job and of the contractual relationships to the general contractor. Pi-Con's providing timely notice would not have prevented vicissitudes of the job or of the contractual relationships that gave rise to a shortfall in the amount of money owing by Anderson to Brian & Gregory available to pay Pi-Con.
Providing timely notice can protect only against the possibility that Anderson will have paid Brian & Gregory for labor and materials- supplied by Pi-Con and then be called upon to pay again for the same labor or materials. A general contractor should not be permitted to escape from the responsibility imposed on it by statute because of a failure to serve timely notice that had no bearing on and did not cause the events that give rise to the money shortfall.
Where the loss of the general contractor cannot be attributed to delay in complying with notice requirements, where the loss is attributable to failure of performance by the subcontractor of its contractual obligations owing the general contractor, not attributable to a failure in performance of the unpaid claimant, the statutory purpose of providing a means of direct recovery without regard to the status of the general contractor/subcontractor relationship should not be defeated on the basis of inconsequential delay in serving notice of claim.
ii
The present public contractor bonding act was enacted in 1963. This Court has not construed that statute as providing that the thirty- or ninety-day notice provisions are so far mandatory that, even if the general contractor has not paid the subcontractor for labor or materials provided by the unpaid claimant, the unpaid claimant cannot recover from the general contractor. The correct construction of the 1963 act is thus an open question.
The purpose of the notice provisions is to protect a general contractor, who makes disbursements to a subcontractor who fails to pay those with whom it deals, from being called upon to pay again for the same labor and materials. The thirty- and ninety-day notice provisions are mandatory in the sense that delay in giving notice defeats the claim of an unpaid claimant if the general contractor would, unless the time limits are enforced, in effect be required to pay again for the same labor and materials.
The thirty- and ninety-day periods are notice provisions, not statutes of limitations. Notice provisions, in contrast with statutes of limitations, are not designed to bar stale claims, but to give early notice of a potential claim so that the person entitled to notice can protect itself by taking appropriate action. If the failure to give timely notice did not result in the prejudice that the giving of notice seeks to forestall, the claim should not be barred as if it were stale, the purpose of requiring notice not having been thwarted.
iii
Subsequent to the enactment of the 1963 public contractor bonding act, the Legislature repealed the mechanics lien law and enacted the construc tion lien act. That act provides, in effect, that even if an unpaid claimant files an untimely notice, the unpaid claimant's right to a construction lien shall not be defeated except to the extent that payments were made pursuant to a sworn statement or waiver of lien "for work performed or material delivered by the lien claimant" (Emphasis added.)
I would regard the construction lien act as a current statement of public policy and a guide to the construction of the earlier 1963 act even though the 1963 act has not been amended to so state. There is no reason to suppose that the Legislature might enact one policy in this regard for unpaid claimants in respect to private construction contracts and another for unpaid claimants in respect to public works construction contracts under the circumstance that, under the public contractor bonding act, the risk of loss is imposed on the general contractor, not the government.
A claimant who has furnished labor or material in the prosecution of the work provided for in such contract in respect of which payment bond is furnished under the provisions of section 3, and who has not been paid in full therefor before the expiration of a period of 90 days after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him for which claim is made, may sue. on the payment bond for the amount, or the balance thereof, unpaid at the time of institution of the civil action, prosecute such action to final judgment for the sum justly due him and have execution thereon. A claimant not having a direct contractual relationship with the principal contractor shall not have a right of action upon the payment bond unless (a) he has within thirty days after furnishing the first of such material or performing the first of such labor, served on the principal contractor a written notice, which shall inform the principal of the nature of the materials being furnished or to be furnished, or labor being performed or to be performed and identifying the party contracting for such labor or materials and the site for the performance of such labor or the delivery of such materials, and (b) he has given written notice to the principal contractor and the governmental unit involved within ninety days from the date on which the claimant performed the last of the labor or furnished or supplied the last of the material for which the claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. Each notice shall be served by mailing the same by certiñed mail, postage prepaid, in an envelope addressed to the principal contractor, the governmental unit involved, at any place at which said parties maintain a business or residence. The principal contractor shall not be required to make payment to a subcontractor of sums due from the subcontractor to parties performing labor or furnishing materials or supplies, except upon the receipt of the written orders of such parties to pay to the subcontractor the sums due such parties. [MCL 129.207; MSA 5.2321(7). Emphasis added.]
Id.
Anderson asserts it "had no knowledge of the status of subcontract payments between Brian & Gregory Contracting Company and Pi-Con, Inc."
Charles W Anderson Co v Argonaut Ins Co, 62 Mich App 650, 653-654; 233 NW2d 691 (1975); Square D Environmental Corp v Aero Mechanical, Inc, 119 Mich App 740, 744; 326 NW2d 629 (1982); John A Hall Construction Co v Boone & Darr, Inc, 102 Mich App 786, 795-796; 302 NW2d 850 (1981).
Pi-Con, Inc v Anderson Construction Co, 169 Mich App 389, 394; 425 NW2d 563 (1988).
[A]ny person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing said payment bond shall have a right of action upon the said payment bond upon giving written notice to said contractor within ninety days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. Such notice shall be served by mailing the same by registered mail, . or in any manner in which the United States marshall . is authorized by law to serve summons. [40 USC 270b(a).]
MCL 129.207; MSA 5.2321(7).
The dissent claims that the Legislature "presumably adopted the certified mail requirement to substantiate receipt of the written notice and, therefore, avoid disputes regarding whether the principal contractor received written notice." Post, p 405. However, the dissent offers no legislative history or case law authority to justify this "presumption." In fact, the dissent fails to mention federal authority that has specifically rejected this interpretation of the certified mailing requirement of the Miller Act. See Twin Co Transit Mix, supra.
We note the absence of a return receipt requirement not, as the dissent suggests, to inform the Legislature how it should write the statute, but to interpret how it did write the statute. We note only that, had the Legislature intended to control the manner of proof of delivery of notice, as the dissent suggests, it would have written the statute differently.
The right of action arises on the ninetieth day after the last furnishing of labor or materials. See opinion of the Court, ante, p 379, n 1, for text of the statute.
See opinion of the Court, ante, p 379, n 1, for text of the statute.
Ante, p 388.
If Anderson paid Brian & Gregory for labor or materials supplied by Pi-Con, it may have violated a procedure established by court order.
The payment bond between Anderson as principal and Federal Insurance Company as surety is for $2,705,000 in respect to general building work for an addition to Cass Technical High School, Detroit.
The contract between Brian & Gregory and Anderson was entered into on June 16, 1982, and stated a contract price of $990,000.
Brian & Gregory filed a chapter 11 petition with the United States District Court on October 4, 1982. On October 22, 1982, a bankruptcy judge entered an order providing that Brian & Gregory was author ized to complete work on the Cass Technical High School project, and to enter into an amendment of the contract between Anderson and Brian & Gregory, and that the contract as amended was affirmed.
The amendment provided that Brian & Gregory would furnish Anderson with a list of the names, addresses, and telephone numbers of all subcontractors and suppliers who were or may become claimants pursuant to § 7 of the public contractor bonding act (see n 1 for reference to the act), and that Brian & Gregory should furnish with each request for payment to Anderson a list of subcontractors, suppliers, and others who are entitled to receive payment for work reflected in the request for payment, and that Anderson "shall remit the net sum as determined by the parties, by check or other negotiable instrument made payable jointly to Brian & Gregory and the supplier." In the Matter of: Brian & Gregory Contracting Co., Inc., No. 82-05593-B, document 12. (Emphasis added.) See n 6.
Thereafter, on November 4, 1982, Pi-Con entered into a contract with Brian & Gregory to provide labor and materials for the Cass Technical High School project. Pi-Con's claim filed with the trustee in bankruptcy in the amount of $26,845.10 was allowed, and Pi-Con received a "dividend" from the trustee for $7,266.30.
A complaint commencing an action may constitute notice. No clearer statement of intent to enforce rights under the statute could be given.
The statute provides, however, that a general contractor shall not be required to make payment to a subcontractor with whom it has a direct contractual relationship of sums due from the subcontractor to unpaid claimants for labor or materials. See last sentence of the statute quoted in the opinion of the Court, ante, p 379, n 1.
And also without regard to the collectibility of the subcontractor or the claims of other creditors of the subcontractor.
See n 4.
1963 PA 213, MCL 129.201 et seq.; MSA 5.2321(1) et seq.
See Carver v McKernan, 390 Mich 96, 100; 211 NW2d 24 (1973); Hobbs v Dep't of State Hwys, 398 Mich 90, 96; 247 NW2d 754 (1976).
1891 PA 179 as amended repealed by 1980 PA 497, § 303, MCL 570.1303; MSA 26.316(303).
1980 PA 497, MCL 570.1101 et seq.; MSA 26.316(101) et seq.
(6) The failure of a lien claimant, to provide a notice of furnishing within the time specified in tins section shall not defeat the lien claimant's right to a construction lien for work performed or materials furnished by the lien claimant before the service of the notice of furnishing except to the extent that payments were made by or on behalf of the owner or lessee to the contractor pursuant to either a contractor's sworn statement or a waiver of lien in accordance with this act for work performed or material delivered by the lien claimant. This subsection does not apply to a laborer.
(7) The failure of a laborer to provide a notice of furnishing to the designee as required by subsection (2) shall defeat the laborer's lien for those wages for which the notice of furnishing is required. [MCL 570.1109; MSA 26.316(109). Emphasis added.]