Title: APAC-Atlantic, Inc. v. General Insurance Co.
Citation: N/A
Docket Number: 061106
State: Virginia
Issuer: Virginia Supreme Court
Date: April 20, 2007

PRESENT:  Hassell, C.J., Lacy, Keenan, Koontz, Lemons, and Agee, 
JJ., and Russell, S.J. 
 
APAC-ATLANTIC, INC.  
OPINION BY 
v. 
Record Number 061106 
 
 
JUSTICE G. STEVEN AGEE 
 
 
 
 
 
 
 
 
    April 20, 2007 
GENERAL INSURANCE COMPANY 
OF AMERICA  
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
Gaylord L. Finch, Jr., Judge 
APAC-Atlantic, Inc. (“APAC-Atlantic”) appeals the judgment 
of the Circuit Court of Fairfax County, which granted a motion 
for summary judgment filed by defendant General Insurance 
Company of America (“General Insurance”) and entered final 
judgment in its favor.  APAC-Atlantic contends the circuit court 
erred in finding APAC-Atlantic’s motion for judgment was not 
timely because it was filed after the expiration of the 
limitations period found in Code § 2.2-4341(C).  For the reasons 
set forth below, we will affirm the judgment of the circuit 
court. 
I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW 
The parties stipulated to the following facts: General 
Insurance is the surety on two payment bonds issued in 
connection with two separate general construction contracts 
awarded by the Virginia Department of Transportation (“VDOT”) to 
New Construction, Inc. (“New Construction”).  The payment bonds 
cover obligations New Construction incurs during its performance 
 
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of the VDOT contracts.  Both payment bonds state: “if [New 
Construction] shall promptly pay all just claims . . . then this 
obligation is to be void; otherwise; to be and remain in full 
force and virtue in law.” 
New Construction subcontracted some of the work on both 
VDOT projects to APAC-Atlantic.  APAC-Atlantic timely completed 
work on one project on August 28, 2003 and on the second project 
on October 9, 2003.  These dates are the respective “day[s] on 
which the person bringing such action last performed labor or 
last furnished or supplied materials” under Code § 2.2-4341(C).  
New Construction did not pay APAC-Atlantic the full amount owed 
for that work, and it filed for bankruptcy protection in 
February 2004, owing APAC-Atlantic $150,905.95 on one of the 
projects and $217,008.48 on the other. 
On December 3, 2004, APAC-Atlantic filed a motion for 
judgment against General Insurance, alleging that under the 
payment bonds General Insurance was liable in its capacity as 
surety for the amounts still owed by New Construction.  General 
Insurance filed an answer and grounds of defense alleging, inter 
alia, that the “[b]onds were issued pursuant to [Code] § 2.2-
4337, the Virginia Public Procurement Act [“VPPA”], and APAC[-
Atlantic]’s action is barred by the statute of limitations of 
[Code] § 2.2-4341.”  General Insurance contended that under the 
Code § 2.2-4341(C) limitations period, APAC-Atlantic was 
 
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required to have filed its motion for judgment on the respective 
bonds by August 28, 2004 and October 9, 2004.  The parties filed 
cross motions for summary judgment, which were argued to the 
circuit court under the stipulated facts.  In its final order 
dated March 4, 2006, the circuit court denied APAC-Atlantic’s 
motion for summary judgment, granted General Insurance’s motion, 
and entered judgment “in favor of General [Insurance] on all 
Counts in this action.”   
We awarded APAC-Atlantic this appeal.    
II. ANALYSIS 
 
APAC-Atlantic contends the trial court erred by failing to 
find “that under the language of the payment bonds [APAC-
Atlantic’s motion for judgment] was timely filed.”  Citing 
Reliance Insurance Co. v. Trane Co., 212 Va. 394, 184 S.E.2d 817 
(1971), APAC-Atlantic contends the plain language of the payment 
bonds can – and in this case does – provide a longer period of 
time than the statutorily prescribed period for bringing suit.  
Specifically, APAC-Atlantic asserts the limitations period in 
Code § 2.2-4341(C) does not apply in the case at bar because the 
plain language of the payment bonds states they are “to be and 
remain in full force and virtue in law” unless New Construction 
pays the “claims for labor and material.”  APAC-Atlantic 
contends this language extends a timely right of action on the 
bonds beyond the statutorily prescribed period.  Furthermore, 
 
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APAC-Atlantic asserts Code § 2.2-4341(C) does not apply because 
the payment bonds do not expressly refer to that statute.  We 
disagree. 
The parties do not dispute that the underlying contracts 
for which the payment bonds were issued fall under the VPPA, 
Code § 2.2-4300 et seq.  “The VPPA is a specific statute 
relating to the acquisition of goods and services by public 
bodies [and] the provisions of that Act . . . apply to disputes 
arising from goods or services provided under the VPPA.”  Mid-
Atlantic Business Communications, Inc. v. Virginia Dep’t of 
Motor Vehicles, 269 Va. 51, 56, 606 S.E.2d 835, 838 (2005).  
Code § 2.2-4341(C) of the VPPA states: “Any action on a payment 
bond shall be brought within one year after the day on which the 
person bringing such action last performed labor or last 
furnished or supplied materials.”  By its plain terms, this 
limitation period is generally applicable to “[a]ny action on a 
payment bond” issued under the VPPA. 
 
The bonds at issue in Reliance Insurance Co., on which 
APAC-Atlantic relies, were substantially different than those at 
issue here.  There, the parties’ contract expressly permitted a 
subcontractor to sue the principal even though the applicable 
statute only permitted such an action when certain conditions 
were met and did not expressly include an action by a 
subcontractor.  Reliance Insurance Co., 212 Va. at 395, 184 
 
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S.E.2d at 818.  Because the parties specifically agreed to those 
terms and the applicable statute did not prohibit them from 
doing so, we held that the parties were free to include “broader 
coverage than that required by the provisions” of the statute.  
Id.  In contrast, the payment bonds in the case at bar contain 
no provision permitting a claimant to bring suit after the 
expiration of the limitations period found in Code § 2.2-
4341(C). 
APAC-Atlantic relies on the phrase “otherwise; to be and 
remain in full force and virtue in law” to support its 
contention.  However, this language does not establish a new 
period during which claimants can file an action, nor does it 
incorporate a limitations period contained in a statute other 
than Code § 2.2-4341(C).  It simply establishes that General 
Insurance’s obligation would only arise if New Construction did 
not pay a claim. 
Also without merit is APAC-Atlantic’s contention that the 
limitations period in Code § 2.2-4341(C) does not apply because 
the payment bonds failed to expressly incorporate this 
provision.  For example, the statute of limitations prescribed 
by the Uniform Commercial Code for disputes arising from 
contracts for the sale of goods (Code § 8.2-725) applies to UCC 
contracts regardless of whether such contracts expressly 
incorporate that limitations period.  See Code § 8.01-246.  
 
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Similarly, the statute of limitations for disputes arising from 
goods or services provided under the VPPA applies to contracts 
subject to the VPPA, regardless of whether they expressly 
incorporate Code § 2.2-4341(C).  Code § 2.2-4300(B) provides 
that the VPPA “shall apply whether the consideration is monetary 
or nonmonetary.”  Because the payment bonds in the case at bar 
were issued in accordance with the VPPA, disputes arising under 
them are subject to the limitations period contained in the VPPA 
– Code § 2.2-4341(C) – unless the parties specifically contract 
for a different time limitation.∗  See Reliance Insurance Co., 
212 Va. at 395, 184 S.E.2d at 818.  The VPPA provision does not 
need to be incorporated by reference, but is applicable because 
of the nature of the dispute. 
 
                                                 
∗ APAC-Atlantic contends the five-year limitations period 
under Code § 8.01-246(2), which is applicable to written 
agreements, would apply instead.  Apart from the fact that the 
parties made no agreement to use any limitations period other 
than Code § 2.2-4341(C) under the VPPA, under settled principles 
of statutory interpretation, where two statutes are potentially 
applicable, “the two should be harmonized, if possible, and 
where they conflict,” the more specific statute applies.  See 
Frederick County Sch. Bd. v. Hannah, 267 Va. 231, 236, 590 
S.E.2d 567, 569 (2004) (quoting Virginia Nat’l Bank v. Harris, 
220 Va. 336, 340, 257 S.E.2d 867, 870 (1979)).  The five-year 
general limitations period of Code § 8.01-246(2) would not apply 
here, because under the VPPA, Code § 2.2-4341(C) is specifically 
applicable to VPPA-derived actions.  “Every action for which a 
limitation period is prescribed by law must be commenced within 
the period prescribed in this chapter unless otherwise 
specifically provided in this Code.”  Code § 8.01-228 (emphasis 
added). 
 
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III. CONCLUSION 
Accordingly, actions on the payment bonds had to be brought 
under the one-year limitations period contained in Code § 2.2-
4341(C).  Because APAC-Atlantic finished work on each project in 
August and October 2003, its motion for judgment filed in 
December 2004 was not timely.  The circuit court thus did not 
err in granting General Insurance’s motion for summary judgment 
and entering judgment on behalf of General Insurance.  We will 
therefore affirm the judgment of the circuit court. 
Affirmed.