Court Opinion

ID: 3047597
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:21:49.689046+00
Date Added: 2024-06-11T11:49:14.305116
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

TRUSTEES OF THE CONSTRUCTION                
INDUSTRY AND LABORERS
HEALTH AND WELFARE TRUST;
TRUSTEES OF THE CONSTRUCTION
INDUSTRY AND LABORERS JOINT
PENSION TRUST; TRUSTEES OF THE
                                                   No. 04-16546
CONSTRUCTION INDUSTRY AND
LABORERS VACATION TRUST,
              Plaintiffs-Appellees,
                                                    D.C. No.
                                                  CV-98-1246-PMP
                v.                                   ORDER*
HARTFORD FIRE INSURANCE
COMPANY; HARTFORD ACCIDENT AND
INDEMNITY COMPANY; RICHARDSON
CONSTRUCTION, INC.,
           Defendants-Appellants.
                                            
                        Filed March 8, 2007

       Before: Alex Kozinski and Raymond C. Fisher,
     Circuit Judges, and Frederic Block,** District Judge.

                             COUNSEL

Theodore Parker, III, Parker, Nelson & Arin, Chtd., Las
Vegas, Nevada, for the defendants-appellants.

   *We exercise our inherent authority to construe the notice of appeal as
having been filed under the correct docket number (D.C. No. CV-98-
1246-PMP).
   **The Honorable Frederic Block, Senior United States District Judge
for the Eastern District of New York, sitting by designation.

                                  2711
2712       TRUSTEES v. HARTFORD FIRE INSURANCE CO.
Andrew S. Brignone, Adam P. Segal, Schreck Brignone, Las
Vegas, Nevada, for the plaintiffs-appellees.

                            ORDER

   We respectfully certify to the Nevada Supreme Court the
questions of law set forth in Section III of this order, pursuant
to Nev. R. App. P. 5. The questions of law are determinative
of the matter pending before this court, and there is no clearly
controlling precedent in the decisions of the Nevada Supreme
Court. All further proceedings are stayed pending receipt of
the answer to the certified question. This panel retains juris-
diction over further proceedings in this court. The parties will
notify the Clerk of this court within one week after the
Nevada Supreme Court accepts or rejects the certification
and, if the certification is accepted, again within one week
after that court renders its opinion.

                       I.   Background

   Richardson Construction, Inc. (“Richardson”) was the gen-
eral contractor on a number of Nevada public works projects.
Richardson subcontracted some of the work to Desert Valley
Landscape and Maintenance, Inc. (“DVL”). Richardson also
entered into an agreement with Hartford Fire Insurance Com-
pany (“Hartford”) and its related entities, whereby Hartford
agreed to serve as surety on a number of payment bonds
required by Nev. Rev. Stat. § 339.025. Pursuant to these
bonds, Richardson and Hartford agreed to be jointly and sev-
erally liable for “labor, materials and equipment furnished for
use in the performance of [DVL’s] Construction Contract.”

  DVL was required to make payments to certain trusts
administered on behalf of Local 872’s union members. How-
ever, DVL never made those payments, and the trustees
brought suit against DVL. After DVL declared bankruptcy,
            TRUSTEES v. HARTFORD FIRE INSURANCE CO.            2713
the trustees amended their complaint to allege state-law
claims against Richardson and Hartford. The trustees’ claims
against Richardson were based on Nev. Rev. Stat. § 608.150.
Under section 608.150, a general contractor is liable for a sub-
contractor’s nonpayment of labor and materials. The claims
against Hartford were based on Nev. Rev. Stat. § 339.035(1),
under which “any claimant who has performed labor or fur-
nished material in the prosecution of the work provided for in
any contract for which a [statutorily required] payment bond
has been given . . . may bring an action on such payment bond
in his own name to recover any amount due him for such
labor or material.” Since the trustees didn’t directly perform
labor or furnish material, their claims against Hartford were
premised on the theory that they “stood in the shoes” of union
members who had worked on the projects. See United States
ex rel. Sherman v. Carter Constr. Co., 353 U.S. 210, 220
(1957) (“The trustees [of union welfare funds] stand in the
shoes of the employees and are entitled to enforce their
rights.”).

  The district court granted summary judgment to the trustees
on their claims. Richardson and Hartford appealed.1

                         II.   Discussion

   When, as here, a contractor is required to furnish a payment
bond under Nev. Rev. Stat. § 339.025, “[a]ny claimant who
has a direct contractual relationship with any subcontractor of
the contractor . . . but no contractual relationship, express or
implied, with such contractor” must provide the contractor
with written notice of the materials and services provided.
Nev. Rev. Stat. § 339.035(2). The statute is silent as to claim-
ants who have no direct contractual relationship with the sub-
contractor.
  1
   The district court entered default judgment against DVL, who is no
longer a part of this action.
2714       TRUSTEES v. HARTFORD FIRE INSURANCE CO.
   The laborers didn’t provide written notice either to Rich-
ardson, the contractor, or to Hartford, its surety, as required
by Nev. Rev. Stat. § 339.035(2). While the union has a con-
tractual relationship with DVL, the trustees now bring suit as
third-party beneficiaries of that contract. The trustees are not
signatories to the collective bargaining agreements, and thus
have no “direct contractual relationship” with DVL, the sub-
contractor. As such, it appears from the language of the stat-
ute that the trustees need not comply with the notice
provisions of Nev. Rev. Stat. § 339.035(2).

   This, however, would allow third-party beneficiaries to
avoid complying with a statutory obligation that binds the
contracting parties. This result seems to be inconsistent with
policy previously expressed in Nevada caselaw. See Bemis v.
Estate of Bemis, 967 P.2d 437, 441 n.3 (Nev. 1998) (per
curiam) (“[W]e are cognizant of the rule that a third-party
beneficiary is subject to any defense arising from the contract
that is assertable against the promisee.”); Morelli v. Morelli,
720 P.2d 704, 706 (Nev. 1986) (per curiam) (“A third party
beneficiary who seeks to enforce a contract does so subject to
the defenses that would be valid as between the parties.”). No
Nevada case has decided whether the notice requirements of
section 339.035(2) apply to third-party beneficiaries.

                   III.   Questions of Law

  The questions of law we hereby certify are:

   1. In order to recover against a defendant surety under
Nev. Rev. Stat. § 339.035(1), must plaintiff trustees, who are
not in a direct contractual relationship with the subcontractor,
comply with the notice requirements of Nev. Rev. Stat.
§ 339.035(2)?

  2. In order to recover against a defendant contractor
under Nev. Rev. Stat. § 608.150 in a case where unpaid trust
fund contributions are covered by a statutory payment bond,
           TRUSTEES v. HARTFORD FIRE INSURANCE CO.         2715
see Nev. Rev. Stat. § 339.025, must plaintiff trustees, who are
not in a direct contractual relationship with the subcontractor,
comply with the notice requirements of Nev. Rev. Stat.
§ 339.035(2)?

  In response to the questions listed above, the Nevada
Supreme Court shall not be bound by the manner in which we
have phrased the questions.

                           *   *   *

   We request that the Nevada Supreme Court accept and
decide the questions herein certified. We agree to abide by the
Nevada Supreme Court’s decision as specified by Rule 5 of
the Nevada Rules of Appellate Procedure, which states that
“[t]he written opinion of the Supreme Court stating the law
governing the questions certified . . . shall be res judicata as
to the parties.”

   The Clerk of this court is hereby directed to file in the
Nevada Supreme Court, under official seal of the Ninth Cir-
cuit Court of Appeals, copies of all relevant briefs and an
original and ten copies of this request with certificate of ser-
vice on the parties.

   This appeal is withdrawn from submission and will be
resubmitted following receipt of the Nevada Supreme Court’s
opinion on the questions certified.

  IT IS SO ORDERED.
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