Court Opinion

ID: 2965032
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:34:24.22159+00
Date Added: 2024-06-11T11:43:04.835839
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ____________________

          No. 97-1577

                      UNITED STATES OF AMERICA FOR THE USE AND,
                      BENEFIT OF WATER WORKS SUPPLY CORPORATION,

                                 Plaintiff, Appellee,

                                          v.

                          GEORGE HYMAN CONSTRUCTION COMPANY,
                       NATIONAL UNION FIRE INSURANCE COMPANY OF
                     PITTSBURGH, P.A., FEDERAL INSURANCE COMPANY
                             AND SEABOARD SURETY COMPANY,

                               Defendants, Appellants.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                      [Hon. Patti B. Saris, U.S. District Judge]
                                            ___________________

                                 ____________________

                                        Before

                                Torruella, Chief Judge,
                                           ___________

                           Campbell, Senior Circuit Judge,
                                     ____________________

                              and Boudin, Circuit Judge.
                                          _____________

                                 ____________________

               Steven  J. Comen,  with whom  Jeremy M.  Sternberg, Dori  C.
               ________________              ____________________  ________
          Gouin,  Howard J. Hirsch and Goodwin,  Procter & Hoar LLP were on
          _____   ________________     ____________________________
          brief for appellant, The George Hyman Construction Company.
               Bert  J. Capone,  with  whom  CharCretia  V.  DiBartolo  and
               _______________               _________________________
          Cetrulo & Capone were on brief for appellant, National Union Fire
          ________________
          Insurance Company  of Pittsburgh,  PA; Federal  Insurance Company
          and Seaboard Surety Company.
               Gary H. Kreppel for appellee.
               _______________
                                 ____________________
                                  December 10, 1997
                                 ____________________

                      CAMPBELL,   Senior  Circuit   Judge.     Defendant-
                                  _______________________

            appellant George Hyman Construction Company ("Hyman") appeals

            from the district  court's judgment awarding recovery  to the

            Water  Works Supply  Corporation  ("Water Works")  under  the

            Miller  Act, 40 U.S.C.    270a-270d  (1986) (the "Miller Act"

            or the "Act").   Hyman makes a number of arguments  as to why

            the district  court  erred in  allowing  recovery.   In  this

            opinion we  concentrate particularly on  Hyman's contentions:

            (1) that Water  Works did  not satisfy  the Act's  ninety-day

            notice requirement; and  (2) that Water Works did  not have a

            sufficiently  close  relationship  to  Hyman  to  qualify for

            recovery under the Miller Act.  Finding no merit in these  or

            in the other arguments that Hyman advances, we affirm.

                                   I.  BACKGROUND.

                      The  facts are largely  undisputed.  Hyman  was the

            general contractor  on  a $70  million  federal  construction

            project  to  build  a  mail  processing  center  in  Waltham,

            Massachusetts (the "Post  Office Project" or  the "Project").

            Pursuant  to  the  requirements  of  the  Miller  Act,  Hyman

            obtained  a payment bond  from National Union  Fire Insurance

            Company  of Pittsburgh,  PA, Federal  Insurance Company,  and

            Seaboard Surety Company  (collectively, the "Sureties").   On

            or  about  September 16,  1994,  Hyman entered  into  an oral

            agreement with Calvesco,  Inc. ("Calvesco"), wherein Calvesco

                                         -2-

            promised to  serve as  demolition, excavation  and site  work

            subcontractor for the Post Office Project.

                      On  September 16,  1994, the  same  day that  Hyman

            hired Calvesco, Calvesco submitted an application for  credit

            to  Water Works,  a  purveyor of  pipe and  piping materials.

            Water Works extended an unlimited line of credit to Calvesco.

            Calvesco was working on at least three projects at that time,

            and the  credit application did  not indicate whether  it was

            for a particular project.

                      Subsequently, Calvesco informed Hyman that it could

            not legally serve as subcontractor on the Post Office Project

            because  it was  a non-union  shop.   On September  27, 1994,

            Hyman  and  Calvesco  agreed to  replace  Calvesco  with Iron

            Holdings,  Inc. d/b/a Charles  A. Jackson Co.  ("Jackson"), a

            unionized company created by the principals of Calvesco. 

                      On October 11,  1994, Jackson notified Water  Works

            that it  had replaced Calvesco  as subcontractor on  the Post

            Office  Project.    Jackson requested  that  it,  rather than

            Calvesco,  receive  Water Works's  invoices.   Because  Water

            Works  had  extended  credit  only to  Calvesco  and  not  to

            Jackson,  Water  Works  refused   to  supply  Jackson  unless

            Calvesco executed a corporate guarantee.  Until the corporate

            guarantee could be signed, Water Works agreed to  ship piping

            materials  to the  Post  Office  Project  site  at  Jackson's

            request and to send the invoices to Calvesco.  That same day,

                                         -3-

            Jackson placed  an order for  pipe.  Water Works  shipped the

            material to  "Charles A. Jackson  Co., c/o Calvesco."   Water

            Works  sent  the  invoice to  "Calvesco,  Inc.  Attn: Jackson

            Gateman, Treas." ("Gateman").

                      From early October through December 29, 1994, Water

            Works  filled  seven  purchase orders  relating  to  the Post

            Office Project.  Water Works  continued to ship materials  to

            the  Post Office  Project site  and to  send the  invoices to

            Gateman  at Calvesco.   Jackson  paid for  five of  the seven

            shipments; the other  two invoices remain unpaid and  are the

            subject  of  this action.    The  first unpaid  invoice,  for

            $53,493.83  and dated November  30, 1994, corresponded  to an

            order placed on  November 1, 1994 by Lou  Ingegneri, the Post

            Office  Project manager  for  Jackson.    The  second  unpaid

            invoice,  for $157.76 and dated  January 12, 1995, related to

            the last delivery  made by Water Works to  the Project, which

            occurred on December 29, 1994.   This second invoice does not

            indicate the name of the person placing the order.

                      During  January and February of 1995, Water Works's

            credit manager Stanley Wernick  ("Wernick") conversed on  the

            telephone  with   several  employees   of  Hyman   about  the

            outstanding  November and  December invoices.    On March  7,

            Wernick sent a demand letter  to Calvesco.  Wernick also sent

            a  copy of  this letter  to Hyman  and the  Sureties.   Hyman

            responded  to Wernick's communications in writing on March 22

                                         -4-

            by  indicating that  it had  turned  the matter  over to  its

            attorneys and was not  paying any claims until it had a clear

            picture of its options.

                      On  April  5,  1995,  Water  Works  filed  suit  in

            Middlesex  County  Superior Court  against  Calvesco and  its

            personal guarantor for monies owed on several jobs, including

            the Post Office Project.  This state court suit resulted in a

            settlement in  which Calvesco agreed  to pay Water  Works for

            the cost of  its materials.  Calvesco has  not satisfied this

            judgment.

                      On the  same day that  Water Works filed  its state

            action,  it also  filed  a  one-count  Miller  Act  complaint

            against Hyman and the Sureties  in the United States District

            Court for the District of Massachusetts.  The  district court

            consolidated Water  Works's federal  action with  twenty-five

            other actions  brought against  Hyman arising  from the  Post

            Office Project in  order to determine issues of  fact and law

            common to all  the claimants.  The district  court found that

            Calvesco  and Jackson  were separate corporate  entities, and

            that Calvesco  was Hyman's  subcontractor from September  16,

            1994  through September  27, 1994,  with  Jackson serving  as

            subcontractor thereafter.

                      Water  Works argued to  the district court  that it

            was in a direct contractual relationship with Calvesco during

            the  period  of   time  when  Calvesco  was   Hyman's  direct

                                         -5-

            subcontractor.   The district  court rejected  this argument,

            finding that the  credit application between Water  Works and

            Calvesco did not constitute a contract.

                      Nevertheless, the court held that Water Works could

            recover under the  Miller Act.  Finding that  Water Works had

            satisfied  the 90-day notice  requirement in the  Miller Act,

            the  court  held  that  Water Works  could  recover  from the

            payment bond on the amount  owed for its November order under

            two alternative theories.  First, Jackson had an open account

            with  Water Works.   Second, Water Works  could recover under

            the doctrine of quantum meruit.

                      The district court  allowed Water Works  to recover

            the amount of its November shipment -- $53,493.83, plus costs

            and interest -- but not the amount of its December shipment -

            - $157.76.   The key  distinction between the two  orders, in

            the court's view,  was that the November order  was signed by

            Jackson's project manager, whereas the December  order, being

            unsigned, could not be plainly attributed to Jackson.

                               II. STANDARD OF REVIEW.

                      We   review   de novo    questions   of   statutory
                                    __ ____

            interpretation that present pure questions  of law.  See Riva
                                                                 ___ ____

            v. Commissioner of Mass., 61 F.3d 1003, 1007 (1st Cir. 1995).
               _____________________

            The sufficiency of notice under the Miller Act, to the extent

            based  on undisputed  facts, is  commonly  reviewed de  novo.
                                                                __  ____

                                         -6-

            See United States  ex rel.  Consol. Elec.  Distribs., Inc. v.
            ___ ______________________________________________________

            Altech, Inc.,  929 F.2d  1089, 1092  (5th Cir.  1991); United
            ____________                                           ______

            States ex rel. Moody v. American Ins. Co.,  835 F.2d 745, 748
            ____________________    _________________

            (10th  Cir. 1987).    We uphold  a  district court's  factual

            findings unless they are clearly erroneous.  See Fed. R. Civ.
                                                         ___

            P. 52(a); United  States ex rel. Calderon &  Oyarzun, Inc. v.
                      ________________________________________________

            MSI Corp., 408 F.2d 1348, 1348 (1st Cir. 1969).
            _________

                                   III. DISCUSSION.

                 A.   The Statutory Scheme of the Miller Act.
                      ______________________________________

                      The  Miller  Act  requires  a  general   contractor

            performing a contract  valued at over  $25,000 on any  public

            construction project  to obtain  a performance  bond for  the

            protection of  persons supplying  labor and  material in  the

            prosecution  of the  work on  the project.   See 40  U.S.C.  
                                                         ___

            270a(a)(2).    The   Act  provides  that  persons   who  have

            "furnished labor or material" to  a public project may sue to

            recover from the payment bond  any amount owed to them.   Id.
                                                                      ___

              270b(a).

                      The  purpose of  the  Miller  Act  is  "to  protect

            persons  supplying labor and material for the construction of

            federal public buildings in lieu of the protection they might

            receive under state statutes with respect to the construction

            of nonfederal buildings."   United States ex  rel. Sherman v.
                                        ______________________________

            Carter, 353 U.S.  210, 216 (1957); see also  United States ex
            ______                             ___ ____  ________________

                                         -7-

            rel. Pittsburgh Tank  & Tower, Inc. v. G&C Enters.,  Inc., 62
            ___________________________________    __________________

            F.3d 35, 35  (1st Cir. 1995) (same).   Courts give the  Act a

            liberal interpretation to  achieve that purpose.   See, e.g.,
                                                               _________

            Carter, 353  U.S. at 216;  Clifford F. MacEvoy Co.  v. United
            ______                     _______________________     ______

            States ex rel. Calvin Tomkins Co., 322 U.S. 102, 107 (1944).
            _________________________________

                      Despite the  "highly remedial"  nature of the  Act,

            MacEvoy, 322 U.S. at 107, there are two important limitations
            _______

            on who can recover from the  payment bond.  First, the Miller

            Act  allows recovery  from the  bond  by persons  who have  a

            "direct  contractual relationship"  with  either the  general

            contractor  or  a  first-tier  subcontractor  of  the general

            contractor.   40 U.S.C.    270b(a).   The  Supreme Court  has

            interpreted  this  provision  to  preclude  recovery  on  the

            payment  bond by  anyone whose  relationship  to the  general

            contractor is  more remote than a  second-tier subcontractor.

            See J.W. Bateson Co. v. United States ex rel. Bd. of Trustees
            ___ ________________    _____________________________________

            of the  Nat'l Automatic  Sprinkler Indus.  Pension Fund,  434
            _______________________________________________________

            U.S. 586, 590-91 (1977); MacEvoy, 322 U.S. at 107.
                                     _______

                      Second, the Act imposes a strict notice requirement

            upon  suppliers who  have a  direct  contractual relationship

            with a first-tier subcontractor, but no relationship with the

            general contractor.   In  order to  recover from  the payment

            bond, such suppliers must send written notice of  their claim

            on  the payment bond to  the general contractor within ninety

            days from the date that they supply the last of the materials

                                         -8-

            for which they  make a claim.  40  U.S.C.   270b(a); see also
                                                                 ___ ____

            United  States  ex  rel.  John D.  Ahern  Co. v.  J.F.  White
            _____________________________________________     ___________

            Contracting Co., 649 F.2d 29, 31 (1st Cir. 1981).1
            _______________

                 B.   Notice under the Miller Act.
                      ___________________________

                      Fulfilling the Act's  notice provision is  a strict

            condition precedent  to recovery  by suppliers of  first-tier

            subcontractors.   See  Ahern, 649  F.2d  at 31.   The  notice
                              ___  _____

            provision serves an important purpose:  it establishes a firm

            date  after  which   the  general  contractor  may   pay  its

            subcontractors  without  fear  of  further  liability to  the

            materialmen or suppliers  of those subcontractors.   See id.;
                                                                 ___ ___

            Noland Co. v. Allied Contractors, Inc., 273 F.2d 917,  920-21
            __________    ________________________

            (4th Cir. 1959).

                                
            ____________________

            1.  The relevant  statutory language concerning  notice reads
            as follows:

                      Every person who has furnished labor or material in
                 the  prosecution of  the work  provided  for [a  federal
                 project]  .  .  . and  who  has  not been  paid  in full
                 therefor  . .  . shall  have the  right to  sue on  such
                 payment bond  . . .  Provided, however, That  any person
                                      ________  _______
                 having   direct   contractual    relationship   with   a
                 subcontractor but no contractual relationship express or
                 implied with the contractor furnishing said payment bond
                 shall have a right of  action upon the said payment bond
                 upon  giving  written notice  to said  contractor within
                 ninety days  from the date  on which such  person .  . .
                 furnished or supplied the last of the material for which
                 such claim  is made,  stating with  substantial accuracy
                 the amount claimed and the name of the party to whom the
                 material was furnished  or supplied. .  . . Such  notice
                 shall be served by mailing the same by  registered mail,
                 postage  prepaid,  in   an  envelop  addressed  to   the
                 contractor . . . .

            40 U.S.C.   270b(a).

                                         -9-

                 1.   Substance of Water Work's Notice.
                      ________________________________

                      While  adherence  to  the  notice  requirement   is

            mandatory, courts have allowed some informality  in complying

            with  the terms  of the  Miller Act  regarding the  method by

            which notice  must be  served.  See,  e.g., Fleisher  Eng'g &
                                            __________  _________________

            Constr. Co. v. United States ex rel. Hallenbeck, 311 U.S. 15,
            ___________    ________________________________

            18  (1940) (holding written notice sufficient although it was

            not  sent via registered mail as statute provides); Coffee v.
                                                                ______

            United States  ex rel.  Gordon, 157 F.2d  968, 969  (5th Cir.
            ______________________________

            1946)  (holding that  a  writing  exhibited  to  the  general

            contractor in the  course of a discussion  served as adequate

            notice  under the  Act).    Courts  have also  been  somewhat

            forgiving of deviations from  the statutory requirement  that

            the  notice be in  writing.  See,  e.g., Altech,  929 F.2d at
                                         __________  ______

            1092 (holding  that the  "only reasonable  inference" from  a

            meeting  was that the  subcontractor sought payment  from the

            general contractor).

                      The language of  the Miller Act requires  notice to

            the general contractor of the amount of the claim and name of

            the party  to whom  the material was  furnished; it  does not

            expressly require a  demand that the general  contractor pay.

            40 U.S.C.   270b(a);  see also McWaters &  Bartlett v. United
                                  ___ ____ ____________________    ______

            States ex  rel. Wilson, 272  F.2d 291, 295 (10th  Cir. 1959).
            ______________________

            Nevertheless,  courts   have  consistently,   and  we   think

            correctly,  held that  "the  written notice  and accompanying

                                         -10-

            oral statements must inform the general contractor, expressly

            or impliedly,  that the  supplier is  looking to  the general

            contractor for payment  so that it  plainly appears that  the

            nature and state of the  indebtedness was brought home to the

            general  contractor."   United States  ex  rel. Kinlau  Sheet
                                    _____________________________________

            Metal Works,  Inc. v. Great Am.  Ins. Co., 537 F.2d  222, 223
            __________________    ___________________

            (5th  Cir.  1976)  (internal quotation  marks  omitted);  see
                                                                      ___

            also United States ex  rel. Bailey v Freethy, 469  F.2d 1348,
            ____ _____________________________   _______

            1350-51 (9th Cir. 1972).

                      Hyman  argues that such  notice as Water  Works was

            shown to have  provided to Hyman did not  indicate that Water

            Works was looking to it  for payment because the only "formal

            notice" that it  received was a copy of  Water Works's demand
                                            ____

            letter to Calvesco.  Hyman points to court  decisions holding

            that the mere forwarding to  the general contractor of a copy

            of  a demand  sent to  a subcontractor  does not  satisfy the

            Miller  Act's notice  requirement.   See Maccaferri  Gabions,
                                                 ___ ____________________

            Inc. v. Dynateria, Inc., 91  F.3d 1431, 1437 (11th Cir. 1996)
            ____    _______________

            (denying recovery under the Miller Act because sending to the

            general contractor  a copy  of a  collection letter  that was

            sent to the  subcontractor, even when  combined with a  joint

            payment plan  and invoices, was insufficient  notice); United
                                                                   ______

            States ex rel. Jinks Lumber Co. v. Federal Ins. Co., 452 F.2d
            _______________________________    ________________

            485, 488 (5th Cir. 1971).  

                                         -11-

                      But while adequate notice requires bringing home to

            the general contractor that the supplier is looking to it for

            payment,  courts have not required formalistic proof of this.

            Communications sent  to the general  contractor detailing the

            supplier's  claim against the subcontractor may, for example,

            be supplemented by  oral and other written exchanges if these

            make  it unambiguously  clear that  the  supplier is  seeking

            payment from the general contractor.  See Altech, 929 F.2d at
                                                  ___ ______

            1093; Coffee, 157 F.2d at 970; Kinlau, 537 F.2d at 223.
                  ______                   ______

                      The record  here shows  not only  that Water  Works

            sent Hyman  the amount  and details  of Water  Works's claims

            against the subcontractor, but that these were accompanied by

            further  oral and written  communications that could  only be

            perceived, and  were in fact  perceived, as looking  to Hyman

            itself for payment.   Water Works's credit  manager, Wernick,

            initiated  matters on February  3, 1995,  by speaking  on the

            telephone with two Hyman employees who were handling the Post

            Office Project account.   During the course of  several calls

            on that day,  Wernick informed them that Water  Works had not

            been paid  by the subcontractor  for its materials.   Wernick

            thereupon faxed copies  of Water Works's unpaid  invoices and

            proofs  of delivery  to Hyman,  thus informing  Hyman of  the

            amount  Water  Works  claimed from  the  subcontractor.   The

            district court found that, in these calls, Wernick also asked

            to obtain  a copy  of Hyman's payment  bond for  "the express

                                         -12-

            purpose of filing  a bond claim."  Hyman's  personnel refused

            to release  the requested  bonding information,  but, as  the

            district  court found,  they countered  with  a promise  that

            Hyman would issue  joint checks payable to  Jackson and Water

            Works,  a  device   to  ensure  payment  for   Water  Works's

            materials.  Wernick continued to communicate about the unpaid

            claims with  Hyman  throughout the  month  of February.    On

            February  9,  Wernick   spoke  again  with  the   same  Hyman

            employees, who informed him that they were attempting to meet

            with the  subcontractor to  discuss the issue  of the  unpaid

            invoices.  Finally on March  7, after more phone calls, Water

            Works sent to Hyman a copy of  a demand letter it had written

            to Calvesco.2  The copy reflected at the bottom not only that

            a copy  had gone to  Hyman but that  copies had been  sent to

            Hyman's three  Miller Act  Sureties.   Finally, on March  22,

            1995, Hyman wrote Water Works  thanking it for its  patience,

            indicating that it  had already paid Jackson,  expressing its

                                
            ____________________

            2.  Hyman argues that "the facts of the present case are even
            more persuasive  than Maccaferri or  Kinlau since Water Works
                                  __________     ______
            purported demand  letter  .  .  .  was  not made  to  Hyman's
                                                    ___
            subcontractor Jackson, but rather to Calvesco."  However, the
            names  "Calvesco"  and  "Jackson"  seem  to  have  been  used
            interchangeably on various occasions, and there is absolutely
            no evidence that Hyman was  confused over the identity of the
            subcontractor  identified  by  Water  Works.    Calvesco  and
            Jackson were owned in  common and Hyman had  been a party  to
            the  agreement  that  substituted  Jackson  for  Calvesco  as
            subcontractor for the  Project.  While Hyman  personnel, like
            Water  Works,  sometimes  referred  to "Calvesco,"  the  name
            "Jackson" was correctly used by  Hyman in its March 22 letter
            to Water Works declining to pay its claim, showing that Hyman
            was fully aware of thecorrect identity of the subcontractor. 

                                         -13-

            reluctance  to pay the  same bill twice,  and informing Water

            Works  that it  had "turned  the  entire matter  over to  our

            attorneys and, on  their advi[c]e, we  are not paying  anyone

            until we have a clear picture of our options."

                      The above  evidence provides clear  indication that

            Hyman  understood  that Water  Works  was looking  to  it for

            payment, having received, as the district court found "actual

            notice."  Wernick's  initial request for a copy  of the bond,

            following his faxing of the unpaid invoices and his telephone

            calls to Hyman about the debt, suggested that Water Works was

            looking to it for payment.  Hyman's comprehension of this can

            be  inferred from  Hyman's promise to  issue joint  checks in

            substitute for information  about the bond.  But  we need not

            decide  whether  these  actions  by  themselves  sufficed  to

            constitute  notice.   Following  these  and other  exchanges,

            Water Works  sent Hyman on  March 7  a copy of  Water Works's

            demand   upon  the  subcontractor.     Unlike  the   copy  in

            Maccaferri, this  indicated at  the bottom  that copies  were
            __________

            also being sent  to Hyman's three Sureties on  the Miller Act

            bond, each of which was designated  by name.  It is not  easy

            to  think of  a reason  to notify  the Sureties  unless Water

            Works was looking to the bond for payment.

                      In  Maccaferri,  the  Eleventh  Circuit  held  that
                          __________

            merely sending the general contractor a copy of the demand to

            the subcontractor did not suffice  to show that the  supplier

                                         -14-

            was looking for  payment to the general, but  the surrounding

            circumstances  were  far  less  indicative that  payment  was

            sought, and there  was no indication  that the Sureties  were

            being sent  copies.  Here,  upon receipt of  a copy of  Water

            Works's  demand upon  the subcontractor showing  plainly that

            other  copies had been sent  to Hyman's Sureties, Hyman could

            have had no illusion that it was not being asked to pay.

                      Hyman's letter of March 22, 1995 fully confirms our

            interpretation.   In the  letter, Hyman  thanked Water  Works

            "for being so patient with us while we are trying to sort out

            the problems"  relative to  the Jackson  claims.   The letter

            went  on to  speak  of  Hyman's  difficulties  with  Jackson,

            Hyman's strong  reluctance to  pay the  same bill  twice, and

            that it had  "turned the entire matter over  to our attorneys

            and,  on their advice, we are not paying anyone until we have
                                          _________________

            a clear  picture of our  options" (emphasis added).   "In the

            end,"  the  letter  went  on,  "we  may,  in  fact,  be  held

            responsible for paying these  invoices.  But we  will exhaust

            every legal  remedy  before  we  do."    The  district  court

            inferred, and we  entirely agree, that this  letter must have

            been in  response to  what Hyman believed  was a  request for

            payment  by  Water Works.    See  Altech,  929 F.2d  at  1093
                                         ___  ______

            (general  contractor's  letter held  to  provide  evidence of

            notice).  

                                         -15-

                      We, therefore,  agree with the district  court that

            in this period  Hyman received notice sufficient  to meet the

            requirements of the Miller Act.

                 2.   Timing of Water Works's Notice.
                      ______________________________

                      The district court found that the ninety-day period

            began  to run on December 29,  1994, the day that Water Works

            made its  final  delivery of  materials  to the  Post  Office

            Project.   Thus, by  the court's calculations,  Water Works's

            letter of March  7, 1995, a copy  of which was sent  to Hyman

            and the Sureties,  and which in combination with  the earlier

            invoices constituted the  written portion of the  notice, fit

            within the ninety-day limit.

                      In support of  its assertion that the  court should

            have used the  date of the November order,  November 1, 1994,

            rather  than the date of  the December order when calculating

            the ninety-day  time limit,  Hyman suggests  that each  order

            under an  open account represents a separate contract with an

            individual  ninety-day  limit.   See  United  States  ex rel.
                                             ___  _______________________

            Robert  DeFilippis  Crane  Serv.,  Inc. v.  William  L.  Crow
            _______________________________________     _________________

            Constr.   Co.,  826  F.   Supp.  647,  655   (E.D.N.Y.  1993)
            _____________

            (concluding  that "[w]here  claims are based  on a  series of

            contracts, a claim must be made within  90 days from the date

            on which the supplier 'furnished  or supplied the last of the

            material' for each  underlying contract");  United  States ex
                                                        _________________

            rel. I. Burack, Inc. v. Sovereign  Constr. Co., 338 F.  Supp.
            ____________________    ______________________

                                         -16-

            657,  661 (S.D.N.Y.  1972).    Under  this  reasoning,  Hyman

            argues,  the limit on the November order  had run by the time

            that Water Works sent notice to Hyman.

                      While several district courts have held that Miller

            Act  notice runs  from each  order on  an open  contract, the

            weight  of authority contradicts  that position.   See United
                                                               ___ ______

            States ex rel. A&M Petroleum, Inc. v. Santa  Fe Eng'rs, Inc.,
            __________________________________    ______________________

            822  F.2d 547  (5th  Cir. 1987)  (collecting  cases from  the

            Second, Fourth,  and Tenth  Circuits that  have held,  either

            implicitly or explicitly, that notice on an open account runs

            from the  last delivery  of materials);  Noland, 273  F.2d at
                                                     ______

            920-21.    In  Noland,  the  Fourth  Circuit  reasoned  that,
                           ______

            although a  strict reading might  fulfill the purpose  of the

            notice provision by  offering more protection to  the general

            contractor, the goal  of a specific statutory  provision must

            take a back seat to the purpose of the overall statute, which

            is  to provide  recovery  for  suppliers  who  have  provided

            materials but  not received  compensation.   See Noland,  273
                                                         ___ ______

            F.2d at 920-21.

                      We  agree  with  the reasoning  in  Noland.   Where
                                                          ______

            claims are based  on an open  account theory, the  ninety-day

            notice period for all of the deliveries begins on the date of

            the last delivery to the project.  The parties to this action

            agree that Water Works delivered the last of its materials to

            the Post Office  Project on December 29, 1994.   We therefore

                                         -17-

            conclude  that the district  court correctly refused  to deny

            recovery on the November order  merely because it was part of

            an open account.

                      Hyman also  argues that, since  the district  court

            denied  recovery to  Water  Works for  the December  order of

            $157.76,  it should not have used  the date of that order for

            purposes of calculating the timeliness of notice.  We are not

            persuaded.

                      As  an initial  matter, we  note  that the  statute

            states that  the time  limit runs from  the date of  the last

            delivery of material "for which a claim  is made."  40 U.S.C.

              270b(a).  The statute does not  start the time limit on the

            last  claim for which the plaintiff eventually recovers; such

            a provision might prove unworkable.

                      But   even  if  the  statute  runs  from  the  last

            recoverable claim, we see little  problem.  In denying  Water

            Works  recovery on  the December  order,  the district  court

            wrote a footnote explaining its reasoning for  distinguishing

            between  the November and December orders: the November order

            form contained the name of a Jackson employee while there was

            no name on the December  order.  The district court concluded

            that there was "no evidence as to whether Calvesco or Jackson

            placed the [December] order."  Accordingly, the court limited

            Water Works's recovery  to the amount  of the November  order

            ($53,493.83) plus costs and interest.

                                         -18-

                      The  undisputed facts are as follows.  First, Water

            Works provided materials that were incorporated into the Post

            Office Project.   Second, Water Works did  not begin shipping

            these materials until after Jackson became the  subcontractor

            on the  Project.  Third,  although Water Works  insisted upon

            sending its invoices  to Calvesco, Jackson paid for the first

            five shipments  by Water Works.   Fourth, Calvesco was  not a

            subcontractor on the Project during the time that Water Works

            shipped materials to the Project.   Fifth, the last date that

            Water Works delivered  materials to the Project  was December

            29, 1994.

                      On these facts,  we see no reason for  the court to

            have  questioned if Calvesco  rather than Jackson  placed the

            December order.  Calvesco, having been replaced by Jackson as

            the  subcontractor on the Post  Office Project, had no reason

            to  order  materials  for  this  job.   The  only  reasonable

            inference  is  that  Jackson placed  this  order,  as  it did

            earlier ones.   While in the  absence of a  cross appeal, the

            court's denial  of the  $157.76 stands, we  see no  reason to

            reject the court's  determination that the December  29, 1994

            date triggered the notice period.

                      As  the notice  was adequate  and  as the  district

            court  did  not  err  in  beginning  the  notice period  from

            December   29,  1994,  Water   Works  satisfied   the  notice

            requirements of the Miller Act.

                                         -19-

                 C.   Water Works's Relationship to Hyman.
                      ___________________________________

                      In order to recover from the payment bond, a person

            must have a "direct contractual relationship" either with the

            general contractor or with a direct subcontractor.  40 U.S.C.

              270b(a); see  also Bateson, 434 U.S. at 590-91.   Hyman and
                       ___  ____ _______

            Water  Works  agree  that they  had  no  direct relationship.

            Hyman argues further  that Water Works did not  have a direct

            contractual relationship with any of Hyman's  subcontractors.

            Hyman  relies upon  the  undisputed  fact  that  Water  Works

            consistently refused to extend credit to Jackson and regarded

            Calvesco as its customer.

                      As  the district court correctly noted, courts have

            allowed  recovery under  the  Miller  Act  by  suppliers  who

            furnish materials  to a subcontractor  "from time to  time on

            open account  . .  . without formal  contract."   Noland, 273
                                                              ______

            F.2d at  919; see also  Apache Powder Co. v. Ashton  Co., 264
                          ___ ____  _________________    ___________

            F.2d  417, 422-23  (9th Cir.  1959).   It is  undisputed that

            Water  Works supplied  materials  to  the  Project  and  that

            Jackson  was  the   demolition,  excavation  and   site  work

            subcontractor  on the Post Office Project after September 27,

            1994.  In addition, Jackson, rather than Calvesco, paid Water

            Works's  first five invoices.  This evidence clearly supports

            the  district court's  finding  of the  existence of  an open

            account  between Jackson and Water  Works.  Since Jackson was

                                         -20-

            Hyman's direct subcontractor,  the Act's tiering requirements

            are satisfied.

                      Since we  find  that the  district court  correctly

            allowed Water Works to recover  under an open account theory,

            we need not address the propriety of its alternative holding,

            which allowed recovery on the basis of quantum meruit.

                      We   have   carefully  considered   Hyman's   other

            arguments; none of them  persuade us that the district  court

            erred in its determination.

                      Affirmed.
                      ________

                                         -21-