Opinion ID: 334715
Heading Depth: 2
Heading Rank: 1

Heading: applicability of the assignment of claims act

Text: 7 United Bonding's claims were primarily based on Miranti's assignment of payments due from CATCO under the construction contracts. Under this theory, CATCO could only be liable for payments made after it had notice of the assignment, and at trial there was a sharp controversy over the timing and adequacy of the notice given CATCO. The district court avoided resolving the factual dispute by holding that the assignment by Miranti was void under the Assignment of Claims Act. On this point, we disagree with the district court's analysis. 8 The district court determined that the Miller Act would apply to the contracts in question, 1 and therefore concluded that the Assignment of Claims Act was also applicable. However, there are important differences in the language and purpose of these two statutes, and we do not believe they can be given a parallel construction. 9 The Miller Act is applicable to any project for a public building or public work, whether or not the government is a party to the construction contract. 40 U.S.C. § 270a; United States ex rel. Gamerston & Green Lumber Co. v. Phoenix Assurance Co., 163 F.Supp. 713, 715, 717-18 (N.D.Cal.1958); see United States ex rel. Sherman v. Carter, 353 U.S. 210, 216, 77 S.Ct. 793, 796, 1 L.Ed.2d 776, 782 (1957); Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins Co., 322 U.S. 102, 107, 64 S.Ct. 890, 893, 88 L.Ed. 1163, 1167 (1944). The purpose of the Miller Act is to protect those who would have materialmen's and workmen's liens under state law if they were not working on a structure exempt as a federal public work or building. The Miller Act has thus been liberally constructed in light of its legislative history, to protect laborers and suppliers. See cases cited supra. 10 By contrast, the statutory test for applying the Assignment of Claims Act is whether a claim upon the United States is involved. This language would appear to limit the coverage of the statute to contracts in which the government is a party. Indeed, it would be contrary to the current interpretation of that Act to give it an unnecessarily broad construction. For example, although it purports to make assignments in contravention of its provisions null and void, we have held that the Act protects the government only and cannot be asserted as between assignor and assignee. 2 11 It is true that in this case the government has promised to indemnify CATCO for any liability assessed; therefore, extending to CATCO the protection of the Assignment of Claims Act would benefit the government. Such a rationale would sweep too widely, however. Even government-controlled corporations have been held not entitled to the protection of this Act. 3 Thus it would be inappropriate to extend that protection to private companies under contract with the government. 12 The district court also based its conclusion on a determination that CATCO was acting as an agent of the United States. 4 Certainly the United States must act through agents when it enters into contracts, and a properly authorized agent could enter into an agreement which would create a claim against the United States. But the contracts in this case were made in the name of CATCO, not the government. If the United States wants the protection of the Assignment of Claims Act, it can be sure of getting it by contracting in its own name. Otherwise, the contract does not create a claim enforceable directly against the United States and thus is not covered by the Act. 13 One other circuit has considered a case similar to this one. There the court held that a cost-plus government contractor, operating under the close direction of government officials, was not entitled to assert the Assignment of Claims Act: 14 (The Act) has no application to transactions between private individuals. A claim against the United States under this section is a right to demand money or property from the United States which can be presented by the claimant to some department or officer of the United States, or may be prosecuted in the court of claims. 15 Rosecrans v. William S. Lozier, Inc., 142 F.2d 118, 124 (8th Cir. 1944) (citations omitted). We conclude this is the proper standard and hold the Assignment of Claims Act inapplicable to the contracts in the instant case. 5