Court Opinion

ID: 9480665
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:54:49.580554+00
Date Added: 2024-06-11T17:47:49.555305
License: Public Domain

JOHNSON, Circuit Judge,
dissenting:
I dissent. The majority has ignored the six-day-off-loading provision of the contract, denying the plaintiff the benefit of this bargained-for provision.
A. Contract Claim
The parties agree that the contract in the present case was for towage, and as such *782should be construed under federal common law. The interpretation of a contract is a question of law, reviewable de novo by this Court. International Bhd. of Boilermakers v. Local Lodge D111, 858 F.2d 1559, 1561 (11th Cir.1988). The district court’s determination that a contract is ambiguous is also a question of law. Id. A contract term is ambiguous if it is reasonably susceptible to more than one interpretation. Id. Under federal common law, parol evidence is admissible to prove the meaning of ambiguities in the contract language. United States ex rel. Garrett v. Midwest Constr. Co., 619 F.2d 349, 352 (5th Cir.1980).
The district court found that the contract did not explicitly provide for standby time, but held that it was “unable to conclude that the standby provision of the contract at issue is ambiguous.” This holding is contradictory and does not adequately explain the six-day-off-loading provision. The contract does contemplate the possibility of delay in off loading and states that Metz-ger will use diligent efforts to off load within six days. This provision places the burden of avoiding delays on Metzger. The contract does not go on, however, to provide what will happen in the event of a delay of more than six days that is caused by Metzger’s lack of diligence.1 Accordingly, the contract is ambiguous on the issue of the plaintiff’s remedy for a breach of the six-day-off-loading provision. The district court erred, therefore, in not looking to extrinsic evidence of the parties’ intent. Garrett, 619 F.2d at 352.
The extrinsic evidence of intent included testimony that industry custom was for the purchaser of towing services to pay for standby time. There was also testimony that Metzger received a lower contract price by assuring Eastern that off loading would take less than six days. This evidence indicates that Metzger assumed the risk of loss accruing from off loading time in excess of six days. Cf. United States ex rel. Llewellyn Mach. Corp. v. Nat’l Surety Corp., 268 F.2d 610, 611 (5th Cir.1959) (where contract provided that contractor assumed the risk of loss, and the contractor received a lower rental cost as a result, loss was chargeable to the contractor).
The district court also held that, even if the contract did require standby time payments in the event that Metzger’s lack of diligence caused a delay of more than six days, Eastern failed to prove such a lack of diligence. The court found that Metzger’s failure to get the site prepared on time for the first shipment, the breakdowns in Metz-ger’s equipment, and the delays in obtaining the Corps’ approval of changes in the dredging site caused the delays. This application of the contract to the facts is erroneous. The delays described by the district court were all attributable to Metz-ger. Metzger should not be permitted to shield itself from liability by citing its own failure to prepare the job site on time, maintain its equipment in working order, or ensure an adequate supply of materials. Cf. United States ex rel. Seminole Sheet Metal Co. v. SCI, Inc., 828 F.2d 671, 675 (11th Cir.1987) (prime contractor not liable for delay where contract with subcontractor contained a “no damages for delay” clause). Implicit in the six-day-off-loading provision was Metzger’s promise to be prepared to off load when the Southern Miss arrived. Accordingly, the district court erred in relying on delays of Metzger’s own making in holding that Eastern had failed to show a lack of diligence.2
B. Miller Act Claim
The Miller Act provides in part:
*783Every person who has furnished labor or material in the prosecution of the work provided for in [a federal public works project] who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him ... shall have the right to sue on [the general contractor’s] payment bond for the amount ... unpaid at the time of institution of such suit....
40 U.S.C.A. § 270b.
The Supreme Court has stated that the Miller Act is “ ‘highly remedial [and] entitled to a liberal construction and application in order to properly effectuate the Congressional intent to protect those whose labor and materials go into public projects.’ ” F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116, 124, 94 S.Ct. 2157, 2162, 40 L.Ed.2d 703 (1974) (quoting MacEvoy Co. v. United States ex rel. Tomkins Co., 322 U.S. 102, 107, 64 S.Ct. 890, 893, 88 L.Ed. 1163 (1944)); see also United States ex rel. Krupp Steel Prods. v. Aetna Ins. Co., 831 F.2d 978, 980 (11th Cir.1987).
In Krupp, this Court stated that there are four. elements necessary to a claim under section 270b:
(1) that materials were supplied for work in the particular contract at issue; (2) that the supplier is unpaid; (3) that the suppliers had a good faith belief that the materials were for the specified work; and (4) that jurisdictional requisites are met.
Krupp, 831 F.2d at 980. In the present case, standby time, rather than materials, was supplied to Metzger. The district court, however, found that standby time is not compensable under the Miller Act.
The district court cited United States ex rel. Edward E. Morgan Co. v. Maryland Cas. Co., 147 F.2d 423 (5th Cir.1945), in support of its holding. In Morgan, a subcontractor had been hired to complete a levy. In the middle of the project, the government agent in charge of the project ordered the subcontractor to halt work, but not to remove his equipment from the site. The subcontractor’s equipment remained at the work site for thirty-one days before the contract eventually was cancelled. The subcontractor sued under the Miller Act for the rental value of the equipment for this period. The Fifth Circuit held that the subcontractor could not recover because the idle time was not necessary for completion of the contract and was not within the contemplation of the parties at the time of contracting. Id. at 425.
In the present case, however, standby time benefitted the project by ensuring Metzger an uninterrupted supply of stone and thereby speeding completion of the project. The contract stated that Metzger would make diligent efforts to off load the stone within six days. The contract also provided that Eastern would make diligent efforts to complete the round trips to Kentucky within fifteen days. These provisions indicate that time was material to both parties. By including these provisions, the parties expressed their intention to limit idle time, and the consequent wasted money, during the contract. Eastern’s standing by was consistent with this purpose.
Courts have held, moreover, that rental time is compensable under the Miller Act. See, e.g., Llewellyn, 268 F.2d at 611 (rentals recoverable under Miller Act); United States ex rel. Carlisle Constr. Co. v. Coastal Structures, Inc., 689 F.Supp. 1092, 1098, 1099 (M.D.Fla.1988) (allowing recovery for “waiting time” and finding rentals for period after initial contractor was fired are recoverable against surety); United States ex rel. Carter-Schneider-Nelson, Inc. v. Campbell, 293 F.2d 816, 818 (9th Cir.1961) (awarding rentals for period that Lessor’s equipment was located at the work site).
These cases indicate that the term “labor or materials” in the Miller Act should be construed broadly. The district court’s holding that the standby time is not labor or materials within the meaning of the Act is an overly restrictive interpretation of the Miller Act. The Miller Act covers services that are performed to benefit a government project. See Rich, 417 U.S. at 124, 94 *784S.Ct. at 2162 (Act should be liberally construed to accomplish its remedial purposes). Accordingly, I would hold that the district court erred in holding that Eastern cannot recover under the Miller Act.
CONCLUSION
I would reverse the district court’s holding that Eastern cannot recover for standby time and remand for a determination of damages.

. The court may award relief in quantum meru-it for work outside of the terms of the contract. United States ex rel. C.J.C., Inc. v. Western States Mech. Contractors, Inc., 834 F.2d 1533, 1538 (10th Cir.1987).

. Metzger also argues that Eastern waived its breach of contract claim by continuing performance after the delays. Eastern, however, complained to Metzger at the time of the delays, and Metzger acknowledged the problem and assured Eastern that it would make up the time if Eastern completed performance. In the end, however, Metzger never made up for the delays as promised. This argument by Metzger, therefore, has little merit. See Autrey v. Williams and Dunlap, 343 F.2d 730, 737, modified, 346 F.2d 1007 (5th Cir.1965).