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Contractor Retains Right To Full Pay Even If It Waives Right To Progress Payments

Tuesday, June 14, 2011 07:08 am

 

Payment - Miller Act

U.S. f/u/b/o Roach Concrete, Inc. v. Veteran Pacific, JV, 2011 U.S. Dist. Lexis 38229 (D. Wis. April 7, 2011)

A one-year statute of limitations on payment claims did not thwart a subcontractor's attempts to recover an outstanding balance for its concrete work.

Prime contractor Veteran Pacific, JV (Veteran Pacific) hired Roach Concrete, Inc. (Roach) to perform concrete work on a U.S. Army Corps of Engineers construction project in Menasha, Wisconsin. Roach sued Veteran Pacific for contact breach, claiming nonpayment of $586,000, and sought recovery under the contractor's Miller Act payment bond. Veteran Pacific argued that a one-year statute of limitations in both the subcontract and the Miller Act barred the sub's suit. A Wisconsin district court disagreed.

The subcontract gave Roach one year "after the cause of action has accrued" to file a claim. Roach filed suit on September 22, 2010. Veteran Pacific contended the suit was barred because the cause of action accrued two years earlier, on September 23, 2008, when the sub submitted an Affidavit of Claim to Veteran Pacific's surety for $586,000. Veteran Pacific reasoned that because Roach sought the same exact amount ($586,000) in the Affidavit as it did in the present lawsuit, the sub must have believed it was owed that amount as a result of a breach on or before the date of the Affidavit (September 23, 2008). On the other hand, Roach contended that the contract breach claim was timely since it didn't accrue until September 27, 2009 when Roach completed the project work.

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