Opinion ID: 156015
Heading Depth: 2
Heading Rank: 2

Heading: Colorado Public Works Act

Text: 31 St. Paul issued the bond to Wilkinson pursuant to the Colorado Public Works Act, Colo.Rev.Stat. §§ 38-26-101 to 107. That act requires that a contractor on a public works construction project shall execute a penal bond with good and sufficient surety 32 conditioned that such contractor shall at all times promptly make payments of all amounts lawfully due to all persons supplying or furnishing him or his subcontractors with labor, materials, rental machinery, tools, or equipment used or performed in the prosecution of the work provided for in such contract.... Subcontractors, materialmen, mechanics, suppliers of rental equipment, and others may have a right of action for amounts lawfully due them from the contractor or subcontractor directly against the principal and surety of such bond. 33 Colo.Rev.Stat. § 38-26-105(1). 7 St. Paul contends that this statute does not cover the fringe benefit contributions for which plaintiffs seek recovery here because those contributions do not directly relate to any labor actually supplied or furnished to Wilkinson, but instead are simply damages for breach of the Colorado CBA. 34 In concluding that the contributions were covered by the statute, the district court relied on Trustees of Colo. Carpenters & Millwrights Health Benefit Trust Fund v. Pinkard Constr. Co., 199 Colo. 35, 604 P.2d 683 (1979). In Pinkard, the trustees sought recovery under a bond issued pursuant to the statute for fringe benefit contributions payable for work actually performed by the contractor's employees on a public works project. The defendants contended that the statute covered only amounts payable directly to the workers, not those payable to the trust funds. Relying on a Supreme Court case interpreting the analogous federal Miller Act, see United States ex rel. Sherman v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957), the court held that the amounts were  'payments ... lawfully due'  under collective bargaining agreements. Each one of these benefits was agreed to be paid by the subcontractors in exchange for the work done by the construction workers. Until these were paid into the trust funds, the compensation to the workers was not fully paid. Pinkard, 604 P.2d at 685. The district court here concluded that it does not matter that the contributions plaintiffs are seeking are not for the workers who actually did the work and cannot be considered part of their compensation. 35 We review the district court's interpretation of state law de novo, Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1220-21, 113 L.Ed.2d 190 (1991), and we think it does matter that the contributions in question are not compensation for work actually performed. The statute covers the claims of all persons supplying or furnishing [the contractor] with labor. § 38-26-105(1). We see no indication that it covers the claims of all persons who may have been entitled to supply or furnish the contractor with labor, whether or not they had a contractual right to do so. Wilkinson obviously breached the Colorado CBA by not hiring workers covered by that agreement. However, the fact is that those workers did not actually supply or furnish anything to Wilkinson. Thus, despite plaintiffs' protestations to the contrary, all they have is a simple derivative breach of contract claim against Wilkinson. 36 Colorado courts have not yet addressed whether § 38-26-105 covers breach of contract damages, but the general rule is that such damages, including lost profits, 8 are not recoverable under public works bond statutes. See, e.g., Lucas v. Western Cas. & Sur. Co., 176 F.2d 506, 508 (10th Cir.1949) (interpreting Oklahoma public works bond statute); L.P. Friestedt Co. v. U.S. Fireproofing Co. 125 F.2d 1010, 1012 (10th Cir.1942) (interpreting federal Heard Act, predecessor to Miller Act); United States ex rel. Mobile Premix Concrete, Inc. v. Santa Fe Eng'rs, Inc., 515 F.Supp. 512, 516 (D.Colo.1981) (interpreting Miller Act); see also Blakeslee Arpaia Chapman, Inc. v. EI Constructors, Inc., 239 Conn. 708, 687 A.2d 506, 517 (1997) (noting that its research disclosed no jurisdiction allowing recovery of unearned profits under Miller Act; [T]he language and purpose of the [Miller Act], requiring payment for work performed or materials supplied, preclude such recovery.). 9 We therefore conclude that § 36-26-105(1) does not cover the breach of contract damages plaintiffs seek in this case.