Opinion
NO. 2012-CA-000579-MR
2013-10-04
FIDELITY & DEPOSIT COMPANY OF MARYLAND; ZURICH AMERICAN INSURANCE COMPANY OF BALTIMORE; AND ELMO GREER & SONS, LLC APPELLANTS v. CONSTRUCTION MACHINERY COMPANY, LLC APPELLEE
BRIEFS FOR APPELLANTS: David B. Blandford Louisville, Kentucky BRIEF FOR APPELLEE: John R. Shelton Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM LAUREL CIRCUIT COURT
HONORABLE JOHN KNOX MILLS, JUDGE
ACTION NO. 11-CI-01122
OPINION
AFFIRMING PART AND REVERSING IN PART
AND REMANDING
BEFORE: ACREE, CHIEF JUDGE; LAMBERT AND MOORE, JUDGES. ACREE, CHIEF JUDGE: The appellants, Fidelity & Deposit Company of Maryland and Zurich American Insurance Company of Baltimore (collectively, the Surety), and Elmo Greer & Sons, LLC, appeal from an order of the Laurel Circuit Court granting summary judgment in favor of Construction Machinery Company, LLC. For the following reasons, we affirm in part, reverse in part, and remand.
Facts and Procedure
Haydon Brothers Contracting, Inc., a heavy equipment highway contractor, subcontracted with Elmo Greer & Sons to build a road in Pike County, Kentucky (the Project). The Kentucky Department of Transportation (KDOT) funded the project. On December 23, 2008, Elmo Greer & Sons, as principal, and the Surety, entered into a payment bond in favor of the KDOT wherein they obligated themselves to pay "each and every person, firm or corporation who may furnish labor, materials or supplies for use on the [P]roject."
Haydon Brothers began work on the Project in August 2009. Haydon Brothers rented a drill from Construction Machinery to be used on the Project. During Haydon Brothers' use, Construction Machinery performed repair work on the drill. It is undisputed that Haydon Brothers stopped working on the Project on August 18, 2010.
Haydon Brothers allegedly did not pay for the drill rental or the repair work. On October 14, 2010, Construction Machinery submitted a claim of $44,118.34 on the payment bond to the appellants. In its notice, Construction Machinery declared the drill was last used on the Project on August 17, 2010. To support its claim, Construction Machinery attached invoices to its notice.
By letter dated December 22, 2010, the Surety acknowledged receipt of Construction Machinery's $44,118.34 claim, but declared it had "questions regarding the claim documentation" submitted by Construction Machinery. First, the Surety stated it was unsure whether Construction Machinery's claim was timely because the payment bond required claims to be filed within 90 days of the last performance. Although Construction Machinery's October letter stated it supplied labor or materials on August 17, 2010, the last invoice was dated June 8, 2010. Additionally, the Surety noted that Construction Machinery requested payment for repair services and that the payment bond did not cover repair work. Finally, the Surety noted Construction Machinery's invoices did not reference the Project. The Surety requested additional documentation to establish both the claim's timeliness and proof that the drill was used on the bonded job.
In response, Construction Machinery sent the appellants a letter dated January 24, 2011, and an affidavit signed by John Haydon, the President of Haydon Brothers. In the letter, Construction Machinery stated that:
There are Construction Machinery rental invoices attached to the Hayd[o]n affidavit that were not originally attached to Construction Machinery's Proof of Claim dated November 16, 2010. These additional rental invoices were inadvertently omitted and this mistake was not realized until you pointed out in your December 22, 2010 letter to me that there was no proof that the last day the machinery was used on the job was August 23, 2010. As confirmed by Mr. Hayd[o]n's affidavit, the last day the machinery in question was on the job was August 17, 2010 and the last rental invoice generated by Construction Machinery was August 23, 2010.In his affidavit, Haydon stated:
Attached hereto are twelve (12) rental invoices from Construction Machinery Company to Hayd[o]n Brothers Contracting for rental equipment used on a Kentucky Department of Transportation project known as "Pike County APD-80-6(29)." The general contractor on this project was Elmo Greer and Sons, LLC. The last day that the equipment, which [is] the subject matter of the attached rental invoices[,] was on the project was August 17, 2010.Based on the invoices attached to Haydon's affidavit, Construction Machinery made a claim for $86,706.85, which was $42,588.51 more than it originally requested.
By letter dated February 4, 2011, the Surety again disputed Construction Machinery's claim. As to the rental of the drill, the letter stated that the invoices were not sufficient because they did not reference the Project. As to the claim for repairs, the letter stated that the payment bond did not cover such costs.
On March 11, 2011, Construction Machinery sued the appellants and Haydon Brothers in Jefferson Circuit Court for $86,706.85 for the rental of, and the repairs to, the drill. By order entered on October 26, 2011, the Jefferson Circuit Court determined venue was improper and transferred the action to the Laurel Circuit Court.
Haydon Brothers was not named as a party to this appeal.
The parties took Haydon's deposition. Haydon testified that Haydon Brothers entered into a rental equipment agreement with Construction Machinery for the rental of a drill to use on the Project. While working on the Project, the drill broke a few times and Haydon Brothers hired Construction Machinery to fix it. Haydon further acknowledged that all twelve of Construction Machinery's invoices attached to his affidavit were for the Project because that is where the drill was located. Haydon Brothers had no other rental equipment from Construction Machinery at any other worksite during the time period covered by the invoices.
Thereafter, Construction Machinery moved for summary judgment. After a hearing, the Laurel Circuit Court entered an order and amended order granting summary judgment in favor of Construction Machinery against the appellants and Haydon Brothers, jointly and severally, for the entire claim plus prejudgment interest and court costs, resulting in a judgment of $95,154.81.
This appeal followed. Additional facts are set forth below.
Standard of Review
As set forth in Hammons v. Hammons, 327 S.W.3d 444 (Ky. 2010):
The proper standard of review on appeal when a trial judge has granted a motion for summary judgment is whether the record, when examined in its entirety, shows there is "no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." The trial judge must view the evidence in a light most favorable to the nonmoving party, resolving all doubts in its favor. Because summary judgment does not require findings of fact but only an examination of the record to determine whether material issues of fact exist, we generally review the grant of summary judgment without deference to either the trial court's assessment of the record or its legal conclusions. Furthermore, it is well established that "[t]he construction as well as the meaning and legal effect of a written instrument . . . is a matter of law for the court." In such cases, this Court reviews the issue de novo.Id. at 448 (citations omitted).
Analysis
The appellants first contend that the trial court erred in granting summary judgment because Construction Machinery's payment bond claim was not timely. The relevant provisions of the payment bond are as follows:
All claims for non-payment must be made within 90 days after having last performed labor or last provided supplies or materials to the project.
. . . .
Upon receipt of a claim for non-payment, the surety shall acknowledge receipt of said notice in writing within 14 calendar days, with a copy also going to the [KDOT], and shall promptly commence an investigation of said notice.
When a Claimant has fully documented their claim, including providing all supporting documentation to the surety, the surety shall within 60 calendar days send an answer to the Claimant, with a copy to the Department, stating the amounts which are undisputed and the amounts which are disputed and the basis on which they are disputed. Further, the surety shall pay, or arrange for payment of the undisputed amounts.
The appellants assert that, because Construction Machinery submitted a claim in a letter dated October 14, 2010, any claim related to an invoice dated prior to July 14, 2010, is barred by the 90-day period. Additionally, the appellants note that the last day Haydon Brothers worked on the project was August 18, 2010; therefore, they contend that any invoice offered in support of Construction Machinery's claim had to be dated prior to August 18, 2010. We disagree.
The express terms of the payment bond clearly state that "[a]ll claims for non-payment must be made within 90 days after having last performed labor or last provided supplies or materials to the project." (Emphasis ours). Construction Machinery asserted that the last day it performed labor or last provided supplies or materials to the Project was August 17, 2010. Thus, it had 90 days from that date to make a claim. The dates on the invoices do not trigger the 90-day deadline and are simply irrelevant.
However, we agree that Construction Machinery only submitted a claim for $44,118.34 within the 90-day period. As set forth above, not until the January 24, 2011 letter did Construction Machinery assert a claim for $86,706.85, which was substantially more than the original amount sought. The January 2011 letter fell outside the 90-day window. Therefore, we conclude Construction Machinery is entitled to no more than $44,118.34, exclusive of interest and costs assessed.
Next, the appellants contend there is a genuine issue of material fact whether the invoices are for the rental and repair of a drill used on the Project, thereby precluding summary judgment. Notably, appellants argue, Construction Machinery provided no supporting documentation for its claim other than its own invoices that fail to reference the Project, Haydon's affidavit, and Haydon's deposition.
In Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991), our Supreme Court stated that, "a party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Id. at 482. The appellants failed to carry their burden.
Here, Construction Machinery submitted invoices, coupled with Haydon's affidavit and deposition testimony, substantiating their claim for compensation under the payment bond. The appellants failed to present any evidence contradicting Construction Machinery's and Haydon's representations that the invoices submitted by Construction Machinery were for the rental and repair of the drill for the Project. Instead, the appellants argue we should disregard Haydon's affidavit and deposition testimony because they are self-serving. Further, the appellants argue they asked for a copy of the equipment rental agreement between Haydon Brothers and Construction Machinery at Haydon's deposition, but never received it.
The appellants concede they made no requests for production of documents, and they took no depositions. This case was litigated for almost a year before summary judgment was granted. The appellants had ample opportunity to take any depositions or conduct any other form of discovery they might have wished to respond substantively to the motion for summary judgment.
Because the appellants failed to present some affirmative evidence to the contrary, we cannot say there is a genuine issue of material fact that the invoices submitted by Construction Machinery were for the rental and repair of the drill for the Project.
CONCLUSION
We affirm in part the trial court's conclusion that Construction Machinery is entitled to its claim of $44,118.34 on the payment bond. However, we reverse the trial court's conclusion that Construction Machinery is entitled to the additional $42,588.51 submitted after the 90-day claim period had expired. Therefore, we remand for the trial court to enter a new judgment in favor of Construction Machinery for $44,118.34 plus prejudgment interest and court costs.
ALL CONCUR. BRIEFS FOR APPELLANTS: David B. Blandford
Louisville, Kentucky
BRIEF FOR APPELLEE: John R. Shelton
Louisville, Kentucky