Court Opinion

ID: 1058683
Source: CourtListenerOpinion
Date Created: 2013-10-09 18:31:57.623007+00
Date Added: 2024-06-11T13:04:56.224834
License: Public Domain

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
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.

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