Court Opinion

ID: 8295265
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:01:30.159798+00
Date Added: 2024-06-11T16:44:01.516791
License: Public Domain

Justice PLEICONES.
I agree that we should reverse the grant of summary judgment but find that S.C.Code Ann. § 29-5-440 (2007) applies, and therefore write separately.
As I read § 29-5-440, it is generally applicable to suits on a payment bond, and no reference to the statute in the bond itself is necessary for the statute’s application. The first paragraph defines the parties entitled to bring such a suit, the second paragraph sets forth the procedure by which a remote claimant, who not being a party to the surety contract itself, must give notice to the bonded contractor of his claim. The third paragraph states the statute of limitations, and the fourth defines terms used in the statute. Unlike the majority, I do not find this statute creates a specialized statutory scheme that applies only when the statute is referenced in the bond itself, but rather that it provides the method for a suit on any payment bond. While some payment bonds are required by statute,3 and others by contract alone, the majority creates a false dichotomy between the two in construing and applying § 29-5-440.
*307Hard Hat is the subcontractor of a subcontractor (MHS) of a subcontractor (Walker White) of the general contractor (Edifice). Walker White’s contract with Edifice required it to obtain a payment bond. The GAI bond at issue here was obtained by Walker White in satisfaction of that requirement. Hard Hat, although not a party to the GAI bond, has brought suit seeking to recover on the bond after it allegedly did not receive full payment from MHS.
The GAI bond provides that subcontractors “may maintain independent actions upon this bond in their own names.” This provision in the GAI bond does nothing more than recognize the statutory right of a remote claimant such as Hard Hat to sue under the bond consistent with paragraph two of § 29-5-440. The GAI bond contains no terms that purport to deny a remote subcontractor the right to recover under it, or to vary the procedures established by § 29-5-440, either in the giving of the notice required under paragraph two or in the statute of limitations contained in paragraph three. We therefore need not decide whether such a limitation or variance would be effective.
In my opinion, the New York case relied upon by the majority is not relevant here. See Scaccia Concrete Corp. v. Hartford Fire Ins. Co., 212 A.D.2d 225, 628 N.Y.S.2d 746 (N.Y.App.Div.1995). Prior to 1985, New York municipalities undertaking public works projects could choose to require a bond containing terms established by a State Finance Law (“statutory bond”), a bond containing different terms (“common law bond”) or no bond at all. In 1985 this State Finance Law was amended, and municipalities were obligated to require bonds in all such projects. In Scaccia, the post-1985 bond’s terms for the giving of notice and for bringing an action were more liberal than those required by the State Finance Law. The issue was whether the contract terms or the statutory terms applied to the suit on the bond. The Scaccia court held that when a surety had contracted to provide greater protections to laborers and material men than that required by the statute, this “voluntary bond” could be enforced as a “common law bond.” In this case, GAI’s bond, while arguably in New York parlance a “common law” bond since it was not required by statute (although it was required by contract), *308does not contain any terms that deviate from the statutory requirements found in § 29-5-440.4 Scaccia might be instructive if GAI’s bond had purported to vary the notice requirements or the statute of limitations found in § 29-5-440, or to deny a remote claimant such as Hard Hat the right to bring suit, but since there is no conflict between the bond and the statute, I find Scaccia inapposite.5
Because I agree there are material issues of fact whether Hard Hat complied with the notice requirements of § 29-5-*309440, I concur in the decision to reverse the circuit court’s order.
BEATTY, J., concurs.

. See e.g. S.C.Code Ann. § 29-6-250 (2007) (governmental bodies must require payment bonds in certain circumstances).

. The majority posits that we should utilize Scaccia to develop definitions for statutory and common-law bonds. I see no reason to create such definitions solely in order to make this 1995 decision by a New York appellate court appear to be relevant. As the New York Court of Appeals explained in 1998,
The distinction that plaintiff attempts to draw between "statutory” and "common-law” bonds is rooted in a line of decisions that preceded the 1985 amendment to State Finance Law § 137. Prior to 1985, the statute was permissive rather than mandatory, providing simply that the Comptroller "may nevertheless” have required a bond for State projects. Since the statute was permissive, the question would sometimes arise whether a particular bond was furnished pursuant to section 137, or simply required as part of a contract. If the former were the case, then the bond was labeled a statutory bond and had to be read in conformity with State Finance Law § 137. However, if the bond were found to be a common-law bond required solely by contract, then the more restrictive State Finance Law limitations period was inapplicable (see generally, Scaccia Concrete Corp. v. Hartford Fire Ins. Co., 212 A.D.2d 225, 229-231, 628 N.Y.S.2d 746 (1995)).
In the context of a statutory scheme that made the procurement of bonds optional, the distinction between common-law and statutory bonds was material and relevant. If the State could choose to do away entirely with a bond, then certainly it could choose to require a bond that did not meet the requirements of State Finance Law § 137. However, once municipalities were required to bond all substantial construction projects, the distinction lost its meaning and effect. A.C. Legnetto Constr. v. Hartford Fire Ins. Co., 92 N.Y.2d 275, 279-280, 702 N.E.2d 830, 831-832, 680 N.Y.S.2d 45, 46-47 (1998).

. I disagree with the majority’s reading of Scaccia which leads it to conclude that the GAI’s bond's failure to reference the statute "indicates Hard Hat had no duty to comply with Section 29-5-440’s notice provisions.” In my opinion, Scaccia stands for the proposition that the terms of a bond statute are incorporated in the bond unless explicitly disclaimed or varied. Moreover, applying the majority's logic, if a "common law” bond neither specifically mentions § 29-5-440 nor explicitly gives subcontractor's a right of action, then those "remote claimants" cannot sue on the payment bond.