Court Opinion

ID: 9755248
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:31:20.204575+00
Date Added: 2024-06-11T07:28:05.428528
License: Public Domain

FLAHERTY, Justice,
dissenting.
I respectfully dissent.
This case concerns the statute of limitations. It raises the question whether the limitations period is implicitly extended by a statute which bars suits on certain contracts during the first ninety days after payment is due under the *33contract.1 The Commonwealth Court held that the limitation period is not extended, but that it runs from the date of breach. That decision is correct.
AGI, Inc., was awarded a road construction contract by the Department of Transportation. The Insurance Company of North America (INA) issued to AGI a payment bond, required by section 3(a)(2) of the Public Works Contractors’ Bond Law of 1967 (Bond Law), Act of December 20, 1967, P.L. 869, 8 P.S. § 193(a)(2). AGI contracted with Centre Concrete Co. to supply materials for the project. On October 21, 1982, Centre made its final delivery to AGI. On that date AGI owed Centre $26,114.75 for materials supplied; AGI has not paid.
On January 11, 1983, Centre submitted its claims to INA. Almost a year later, on December 2, INA wrote to Centre, denying liability on the claim because the one year statute of limitations2 had run. Centre then filed suit against AGI and INA on the bond on December 2, 1983. INA raised the affirmative defense that the suit was time-barred and moved for a judgment on the pleadings. The trial court denied the motion, but certified the issue for interlocutory review. The trial court held that the statute of limitations *34began to run on the date the cause of action “accrued.” It ruled that the cause “accrued” not on the date when Centre had fully performed its duties under the contract, but ninety days later, on the first date that Centre could legally file suit on its claim.
The Commonwealth Court reversed. It rested decision on the common understanding that a surety’s obligation on its bond depends on the terms of the bond. The bond provides:
The PRINCIPAL and SURETY hereby, jointly and severally, agree with the obligee [Commonwealth] herein that any ... corporation, which has performed labor or furnished material in the prosecution of the work as provided, ... and which has not been paid in full therefor, may sue in assumpsit on this Payment Bond in ... its own name and may prosecute the same to final judgment for such sum or sums as may be justly due____
The Commonwealth Court read this language to accept the general principle that the subcontractor’s cause of action accrued on the date it completed the performance of its contractual duties, not on the later date when it could first bring suit. On this understanding, the court held that the statute started to run in October, 1982, and it ran out in October of 1983.
Centre claims that the Commonwealth Court erred in its determination of when the cause of action accrued. It relies primarily on Bond v. Gallen, 503 Pa. 286, 289, 469 A.2d 556, 558 (1983). Bond involved the $750 threshold requirement of the No-Fault Motor Vehicle Insurance Act in connection with the two-year tort limitations period, 42 Pa.C.S.A. § 5524(2). We held that the statute of limitations for suits under the Act began to rum from the date when the $750 expense requirement was met rather than from the dáte of the accident. But Bond rested on two factors which are not present in this case. First, under the No-Fault Act, there was no cause of action until the $750 threshold was met. Here, the statute delays the time when a suit may first be brought, but it does not expressly deal with the accrual of the cause of action. Second, in Bond, we were *35concerned that in some cases the accumulation of the $750 threshold amount might be unduly delayed, leaving little or no time to bring suit if the statute were deemed to run from the date of the injury. Here, by contrast, the statutory delay in the commencement of suit is for a definite, ninety day period. There is no concern about whether a plaintiff will have a reasonable time to begin his suit before the limitation period runs out.
Centre also relied on a series of cases which held that a cause of action on a surety bond did not accrue until the claimant satisfied the conditions precedent to suit which were specified in the pertinent contracts. Penns Creek Municipal Authority v. Maryland Casualty Co., 120 F.Supp. 549 (M.D.Pa.1954) (bond provision barring suit within ninety days from the last day when labor or materials were furnished held to delay accrual of cause of action for the ninety day period); C.M. Eichenlaub Co. v. Fidelity and Deposit Co., 293 Pa.Super. 11, 437 A.2d 965 (1981) (contract only required general contractor to pay subcontractor when the general contractor was paid by the owner; held that this provision specified the time the cause of action accrued); Travelers Indemnity Co. v. Rexnord, Inc., 37 Pa.Commwlth. 20, 389 A.2d 246 (1978).
Those cases do not affect the propriety of the Commonwealth’s Court’s ruling. They rely on conventional rules under the statute of limitations. Those rules declare that the terms of a contract, including terms which expressly establish conditions precedent to bringing suit, determine when a cause of action accrues. In this case there was no express contractual condition precedent to Centre’s suit. The pertinent rule declares that Centre’s cause of action accrued when it completed its performance under the contract, in October, 1982. The interposition of a statutory ninety day waiting period is not the equivalent of a similar, express condition in a private contract.
NIX, C.J., joins this dissenting opinion.

. The statute provides:
(a) Subject to the provisions of subsection (b) hereof, any claimant who has performed labor or furnished material in the prosecution of the work provided for in any contract for which a payment bond has been given, pursuant to the provisions of subsection (a) of section 3 of this act, and who has not been paid in full therefor before the expiration of ninety days after the day on which such claimant performed the last of such labor or furnished the last of such materials for which he claims payments, may bring an action on such payment bond in his own name, in assumpsit, to recover any amount due him for such labor or material, and may prosecute such action to final judgment and have execution on the judgment.
8 P.S. § 194(a).

. The relevant portions of the limitations acts provide:
"The time within which a matter must be commenced under this chapter shall be computed, except as otherwise provided by subsection (b) or any other provision of this chapter, from the time the cause of action accrued....” 42 Pa.C.S.A. § 5502(a).
"The following actions must be commenced within one year: ... an action upon any payment or performance bond.” 42 Pa.C.S.A. § 5523(3).