Court Opinion

ID: 9551316
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:51:13.844998+00
Date Added: 2024-06-11T15:23:30.910703
License: Public Domain

Zenoff, J.,
dissenting:
This is an appeal by Ryberg & Garff Construction Company and U.S. Enterprises of Reno, Inc., general contractors, and their surety, Federal Insurance Company, from summary judgments granted in favor of J. R. Bradley Company and Ray *84Heating Products, Inc., two suppliers of a subcontractor, C. J. Monroe Company.
On July 29, 1965 Garff and U.S. Enterprises were awarded a contract to build the Carson City law enforcement facility by the Board of County Commissioners of Ormsby County. Since this was a public building project, no lien rights could accrue. But in accordance with NRS 339.025(1)(b),1 Garff and U.S. Enterprises secured a payment bond from Federal Insurance Company which bound that company to the board to pay all just debts contracted by the contractors or any subcontractors for labor and materials furnished for the contractors. The bond further provided that for all purposes all who had performed labor or furnished materials to any subcontractors would be deemed to have done the same at the instance of the contractor.
In connection with the project, Garff and U.S. Enterprises entered into a subcontract with C. J. Monroe Company for plumbing and heating. Monroe, in turn, contracted with Ray for the installation of the heating system and with J. R. Bradley Company for certain plumbing materials.
During the course of the construction, Monroe was unable to make full payment to Ray and Bradley. They commenced suits naming appellants as defendants, alleging the terms of the payment bond. Summary judgments were allowed in their favor from which the general contractors and their surety appeal.
The real question confronting us is the significance of the failure of both Ray and Bradley to serve written notices upon the general contractor within 30 days after they commenced their participation in the construction as required by NRS 339.035(2) (a).2 The bond provides that payments under the bond would be made provided that all persons claiming under *85the bond shall have complied with the provisions of said act. (Chapter 339, NRS.) The giving of a 30-day notice is one of those provisions and it is urged that the failure to so give precludes suit in this case.
That portion of the statute which requires 30 days’ notice is peculiar to Nevada. Statutes of other states and the federal government by Section 270(b), 40 U.S.C.A., known as the Miller Act, require only that a 90-day notice be given after the completion of the construction.
Unquestionably, the 90-day notice requirement which was complied with here, is a condition precedent to commencing an action on a claim in connection with the job. The so-called “Miller” acts are remedial in nature and are entitled to a liberal construction in order to effectuate the legislative intent. That intent clearly is to protect those whose labor and materials go into public projects. But another apparent purpose and intent is to fix a time limit after which the prime contractor can make payment to its subcontractors with a certainty that he will not thereafter be faced with claims of those who furnished labor for and supplied material to the subcontractors. United States v. York Electric Construction Co., 184 F.Supp. 520, 522 (D.N.D. 1960); Maynard v. Ivey, 21 Nev. 241, 29 P. 1090 (1892) (relating to liens). While the statute uses the general term, “notice,” it is intended to be in legal effect the presentation of a claim (United States v. York, supra) without which a cause of action under the statute cannot come into being. Zalk-Josephs v. Wells Cargo, 77 Nev. 441, 366 P.2d 339 (1961). Cf. Robinson Clay Product Co. v. Beacon Construction Co. of Mass. Inc., 159 N.E.2d 530 (Mass. 1959).
The function of the 30-day notice is to alert the contractor to the presence and participation of possible claimants. If the general contractor has actual knowledge of the services of the suppliers, no prejudice to the general contractor should result, absent special circumstances. Such warning notice does not bear the finality of the presentation of a claim as does the 90-day notice.
Actual knowledge consists not only of what one certainly knows, but also consists in information which he might obtain by investigating facts which he does know and which impose upon him a duty to investigate. Smith v. Pacific Mut. Life Ins. *86Co., 192 F.2d 248 (6th Cir. 1951); Shapiro v. Equitable Life Assur. Soc., 172 P.2d 725 (Cal.App. 1946); Brown v. Copp, 232 P.2d 868 (Cal.App. 1951); Greenlees v. Owen Ames Kimball Co., 66 N.W.2d 227 (Mich. 1954); James v. Hutchinson, 211 S.W.2d 507 (Mo.App. 1948); Hotel Hay Corp. v. Milner Hotels Inc., 39 N.W.2d 363 (Wis. 1949); Hodges v. Beardsley, 112 So.2d 482, 484, 485 (Ala. 1959). Actual knowledge is actual notice. Millowners’ Mut. Life Ins. Co. v. Goff, 232 N.W. 504 (Iowa 1930); Bowman v. Bowman, 13 P.2d 1049 (Cal.App. 1932).
There was sufficient evidence in this case to show the general contractor had actual knowledge of the participation of Bradley and Ray. Before actual work was even started, prices were quoted to Monroe, the plumbing and heating contractor. A meeting was held attended by the general contractor’s architects, one Elkins, president of the general contractor’s corporation, and representatives from Ray, at which everyone agreed that Ray would furnish and install the heating, air conditioning and ventilating system for Monroe. After the job was commenced and the bond executed, Knudson, foreman for Ray Heating, was constantly on the job site and conversed often with Pierce, the job superintendent for appellant general contractor. One Fred Heap, sheet metal foreman and job superintendent for Ray Heating, had direct dealings with Pierce. When Ray became financially stressed he furnished the general contractor a status report as to its accounts regarding labor and materials furnished on the job. An assigmnent of the contract retention funds of Monroe was obtained from Monroe and was accepted by appellant general contractor.
With Bradley, a representative of U.S. Enterprises inquired of Bradley about Monroe’s credit, stating his inquiry was made because Monroe had been awarded a subcontract by U.S. Enterprises to do the plumbing work for the Ormsby County jail construction and that Monroe was to obtain the necessary materials and supplies from Bradley for the purpose.
All of the foregoing took place before the construction began and during its progress.
While a party may deny expressly that he had notice of a fact, yet the circumstances may be such as to justify the court in concluding that he did not have written notice of a meeting with other subdivision lot owners, nevertheless, he attended the meeting, hence from the circumstances he had actual notice. Vaughan v. Fuller, 175 So.2d 103, 105 (Ala. 1965).
It is well-settled that notification proposed to inform may be replaced by actual knowledge. And this is especially so when *87the knowledge has been acted upon without reliance upon the notifications’ absence or its defects. Clark v. Wolman, 221 A.2d 687, 688 (Md. 1966) (reclassification of property).
Were we to hold that at the early stages of a public construction that the requirement of the 30-day notice is absolutely mandatory, the strict technical interpretation would be a departure from the legislative intent. Western Standard Uranium Co. v Thurston, 355 P.2d 377, 387, 388 (Wyo. 1960). Bond requirements should be liberally construed. Maryland Casualty Co. v. Ohio River Gravel Co., 20 F.2d 514 (4th Cir. 1927). Actual prejudice must be shown in order to discharge a surety. Fred Christensen, Inc. v. Hansen Construction Co., 21 P.2d 195 (Ore. 1933); Maryland Casualty Co. v. Ohio River Gravel Co., supra; Fidelity and Deposit Co. of Maryland v. John Gill & Sons Co., et al., 270 S.W. 700, 705, 706 (Mo. 1924).
Keeping in mind that this case is before us on appeal from summary judgments, Garff and U.S. Enterprises assert in their affidavit to support their own motion for summary judgment and to refute those of the respondents that they had no actual knowledge of who furnished the materials and labor to Monroe. But that mere conclusion (Dredge Corp. v. Husite Co., 78 Nev. 69, 369 P.2d 676 (1962), does not contest the affirmative allegations of both Bradley and Ray which recite the numerous personal contacts between their representatives and those of the general contractors before and during the job construction. From this record no material issue of fact is presented, only the issue of law as stated. According to the supporting affidavits the general contractors had actual knowledge that Bradley and Ray were furnishing materials and labor. The actual knowledge in this case served the function and purpose of the 30-day notice.
I therefore respectfully dissent.

NRS 339.025(1) (b): “A payment bond in an amount to be fixed by the contracting body, but not less than 50 percent of the contract amount. Such bond shall be solely for the protection of claimants supplying labor or materials to the contractor to whom the contract was awarded, or to any of his subcontractors, in the prosecution of the work provided for in such contract.”

NRS 339.035(2)(a). “2. Any claimant who has a direct contractual relationship with any subcontractor of the contractor who gave such payment bond, but no contractual relationship, express or implied, with such contractor, may bring an action on the payment bond only:
“(a) If he has, within 30 days after furnishing the first of such materials or performing the first of such labor, served on the contractor a written notice which shall inform the latter of the nature of the materials being furnished or to be furnished, or the labor performed or to be performed, and identifying the person contracting for such labor or *85materials and the site for the performance of such labor or materials;
Sec. 339.035(2) (b) provides: “After giving written notice to such contractor within 90 days from the date on which the claimant performed the last of the labor or furnished the last of the materials for which he claims payment * *