UNITED STATES v. WESTERN ELECTRIC CO.

JAMESON, District Judge:

In this Miller Act1 case, use plaintiff, Barney Austin, a subcontractor, and his surety, Great American Insurance Company, have appealed from a summary judgment in favor of the defendants Western Electric Co., Inc., a prime contractor, and its surety, Merchants Fire Assurance Corporation of New York.

Western Electric entered into a contract with the United States to construct Project Mercury, including tracking station 13 at Point Arguello, California. It entered into a subcontract with Burns & Roe, Inc., for engineering and construction work. In turn Burns & Roe issued to plaintiff Austin, and Austin accepted, a so-called purchase order whereby Austin agreed to do the architectural, structural and mechanical phases of the work to be done at station 13 by Burns & Roe under its subcontract.

Austin completed the work under his subcontract with Burns & Roe, but was unable to pay for all the labor and material furnished by others in the performance of this contract. Austin's surety, Great American, paid labor and material claims totalling $22,279.96. Plaintiffs' complaint claims a balance due from defendants in the sum of $111,465.11.2

Plaintiffs' complaint was filed on December 7, 1961, although plaintiffs contend that it was delivered to the clerk of the district court on December 6 and should have been filed as of that date.3

On December 8, 1962, defendants filed their motion for summary judgment on the grounds (1) that the suit was not instituted within one year from the date on which the last of the labor was performed or material supplied4; and (2) that the plaintiff Austin's notice of claim was insufficient for the reason that it did not state "with substantial accuracy the amount claimed" by plaintiff.5

On January 10, 1963, plaintiffs filed a notice of motion for an order correcting the filing date on the complaint to December 6, 1961, the date on which the complaint was delivered to the clerk.

The two motions were heard by the district court on February 4, 1963. The case had also been calendared for a pretrial conference on the same date. Counsel for plaintiff indicated that he was not ready for pretrial and that further discovery was necessary.6 The pretrial conference was continued to March 11, 1963. No conference was held.

An order was entered February 11, 1963, granting defendants' motion for summary judgment, and findings of fact, conclusions of law and judgment were entered February 21, 1963. An order was entered March 11, 1963, denying plaintiffs' motion to correct the filing date of the complaint.

Appellants appealed from the judgment and the order denying their motion to correct the filing date. On September 10, 1963, an order was entered in this court dismissing the appeal for the reason that neither the summary judgment nor the order was appealable, but suggesting that if the district court should see fit to make the determination and give the direction specified in Rule 54 (b)7 of the Federal Rules of Civil Procedure and enter judgment in conformity therewith, an appeal therefrom could be heard upon the briefs and record of the proceedings in the district court.

On October 16, 1963, the district court entered an order amending its order of February 11, 1963, to provide that the judgment entered in favor of the defendants should be a final judgment pursuant to Rule 54(b). On October 21, 1963, amended findings of fact, conclusions of law, and judgment were entered in conformity with the amended order and the provisions of Rule 54(b).

The summary judgment was granted on the first ground of defendants' motion, i. e., that plaintiffs' action was filed more than one year from the date on which the last labor was performed and material supplied by the plaintiff Austin. The district court did not pass upon the question of the sufficiency of the notice of the claim filed by Austin.8

The court found that plaintiff Austin "substantially completed the work and the furnishing of material * * * on or about October 25, 1960"; that the labor and material furnished subsequent to that date "were of a minor nature, such as cleanup, repair, correction or installing overlooked items as noted by Burns & Roe, Inc., in its punch list"; and that "written notice of nonpayment was given by plaintiff Austin to Western Electric on December 14, 1960, stating that the work of the subcontract * * * was completed on or about October 25, 1960".

Appellants contend, inter alia, that the "district court erred in weighing the evidence and resolving issues rather than determining that there were issues to be resolved in a regular trial". The record suggests that this may be true. There is no recital in the court order, findings of fact, or judgment that the pleadings, depositions, admissions, and affidavits "show that there is no genuine issue as to any material fact."9 Rule 56(c).

The findings of fact recite that "having considered all of the evidence and having examined all of the proofs offered by the respective parties", the court makes its findings of fact — a form customarily followed where the court has weighed the evidence and resolved the issues. Rule 52(a), by amendment effective March 19, 1948, specifically provides that, "Findings of fact and conclusions of law are unnecessary on decisions of motions" for summary judgment under Rule 56. We recognize, however, that findings of fact and conclusions of law are frequently used in granting motions for summary judgment.10 As suggested in Trowler v. Phillips, 9 Cir. 1958, 260 F.2d 924, 926, findings of fact, "while unnecessary", sometimes "provide a handy summary". On the other hand, "all too often a set of unnecessary findings of fact is the telltale flag that points the way to a discovery that summary judgment should not have been granted".

If the district court were permitted to weigh the evidence and resolve issues in making its findings of fact and conclusions of law, we could properly find from the evidence here that the findings and conclusions should be sustained. It is necessary to determine, however, whether viewing the evidence as a whole and the inferences to be drawn therefrom in the light most favorable to the plaintiff it may be said that there is no genuine issue of fact,11 mindful also of the fact that there is no express finding to that effect by the district court.

A determination as to whether there is a genuine issue of fact involves three related questions: (1) is "substantial completion" the proper test as to when the last of the labor is performed or materials supplied; (2) were any of the so-called "punch list" items performed and furnished on or after December 7, 1960, and if so, were they required to complete the subcontract of the plaintiff Austin; and (3) are plaintiffs bound by the notice given by the plaintiff Austin on December 14, 1960?

The Miller Act "is entitled to a liberal construction and application in order properly to effectuate the Congressional intent to protect those whose labor and materials go into public projects. * * * But such a salutary policy does not justify ignoring plain words of limitation and imposing wholesale liability on payment bonds". Clifford F. MacEvoy Co. v. U. S., 1944, 322 U.S. 102, 107, 64 S.Ct. 890, 88 L.Ed. 1163; United States v. Carter, 1956, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776; Apache Powder Co. v. Ashton Co., 9 Cir. 1959, 264 F.2d 417, 421.

As noted supra, a subcontractor is required to give notice of his claim within 90 days from the date on which he performed the last labor or furnished or supplied the last material for which claim is made. He must file suit within one year from the same date. Appellees contend that the critical date is when the contract was "substantially performed". Apparently, the district court adopted this test and found that the work was "substantially completed" on October 25, 1960.

We do not find the phrases "substantially performed" or "substantially completed" used in any of the decided cases. A more accurate statement of the test to be applied is whether the work was performed and the material supplied as a "part of the original contract" or for the "purpose of correcting defects, or making repairs following inspection of the project". See United States v. Gunnar I. Johnson & Son, Inc., 8 Cir. 1962, 310 F.2d 899, where the court held that two bus duct elbows were component parts of an electrical equipment distribution system, although there was no evidence "as to the cost or value of such elbows, or as to whether they were of major or minor importance".12

The case which proved persuasive with the district court, United States for Use of McGregor Architectural Iron Co. v. Merritt-Chapman & Scott Corporation, N.D.Pa.1960, 185 F.Supp. 381, is distinguishable. There the court found, after trial, that the subcontractor supplied the last materials on his contract by January, 1954; that the "correction of errors in the work performed * * * completed in early 1954 and which consisted in supplying some missing bolts and closing some holes in the head posts, which had been overlooked, was pursuant to an inspection made in 1955 followed by notice thereof and not part of the original performance of the contract". The court's "discussion" called attention to the fact that the work had been completed by January, 1954, and that it was "most significant that a year and a half later two hours of labor were performed on June 9, 1955, and eight hours of labor on June 20, 1955, without charge, followed by a carefully worded formal notice on June 22, 1955".

Attached to "Declaration of Barney Austin in Opposition to Motion for Summary Judgment" as an exhibit is a "punch list", dated October 13, 1960, containing some 60 items, and sent to Austin by Burns & Roe on October 20. The letter of transmittal called it a "punch list of work covered by your contract" and stated that the work must be completed by October 26, 1960.13 In other words, it was not a list submitted after completion of the work and limited to corrections and repairs.

Appellees concede that there is a dispute as to the last date "upon which the punch list items were completed",14 but contend that the dispute is immaterial because the punch list items were in the nature of corrections of minor defects, not necessary to "substantial completion" of the plaintiff's contract. Many of the items in the punch list, however, appear to be work required for the "completion of the project".15 Others obviously were in the nature of corrections, repairs and cleanup.

Appellees rely heavily upon the notice prepared, signed and verified by Austin's attorney and mailed to the prime contractor on or about December 14, 1960. This notice reads in pertinent part: "You and each of you will please take notice that on or about the 25th day of October, 1960, Barney Austin * * * completed the furnishing of labor, material and services upon a certain project, known as Project Mercury * * *".

With reference to this notice, plaintiff Austin answered interrogatories submitted by defendants in pertinent part as follows:

In answer to other interrogatories, Austin stated that the "last work as far as physically completing the work of the subcontract on the job site, was December 9, 1960, * * *" (Interrogatory 71); that he furnished labor or materials in prosecution of the work subsequent to "on or about October 25, 1960 (Interrogatory 138); and that he would rely upon "payroll records, material bills, testimony of myself and of my employees" to prove the truth of his answer to interrogatory 138.

In a deposition Austin testified that the statement that the job was completed on or about October 25, 1960, was correct, "with the exception of the work that was requested on the punch list". In Austin's "declaration" it is recited that, "On or about November 2, 1960, the work of the subcontract had been substantially completed so far as he could determine, excepting such items of work which may have been unintentionally omitted or failed to receive approval of a government inspector or Burns & Roe".

The testimony with respect to what work, if any, Barber did on December 7, 8, and 9 is inconclusive, and it cannot be determined from the record whether this work may have been a part of the original contract, or corrections and repairs subsequent to the completion of the contract.17

Finally, appellees contend that Austin's "Declaration" and Barber's affidavit must be totally disregarded, as "presumably" each "was in the court below", for the reason that they failed to comply with Rule 56(e). It is true, as appellees contend and appellants concede, that the declaration is not an affidavit. It is a recital of facts followed by the statement, "I declare under penalty of perjury that the foregoing is true and correct". This would be sufficient under the California law,18 and counsel for appellants state that the use of this form rather than an affidavit was inadvertent on the part of counsel.

No objection was interposed to the use of this declaration at the hearing on the motion for summary judgment, and counsel for both parties referred to the declaration in their oral argument to the trial court. The declaration would have been subject to a motion to strike. Had appellees made such a motion or otherwise objected to the use of the declaration, the defect could have been remedied by appellants filing an affidavit in lieu of the declaration.

Moreover, while Rule 56(e) does not state any different requirement for opposing affidavits than for the movant's affidavits, "the papers supporting the movant are closely scrutinized whereas the opponent's are indulgently treated". Bohn Aluminum & Brass Corp. v. Storm King Corp., 6 Cir. 1962, 303 F.2d 425. See also 6 Moore's Federal Practice 2123-6, § 56.15(3); p. 2336, § 56.22; Cammack v. Howard, D.C.Cir. 1946, 154 F.2d 22.

Under these circumstances, and particularly in view of the fact that no pretrial conference was held, it is our opinion that neither the trial court nor this court is precluded from considering the declaration.19

The same is true of the Barber affidavit.20 In any event, this affidavit simply corroborates the Austin deposition with respect to the days worked, and the deposition in itself is sufficient to raise this issue.

Viewing the evidence as a whole and the inferences which may be drawn therefrom in the light most favorable to the plaintiff we cannot say that there is no genuine issue of fact with respect (1) to whether work was performed on or after December 7, 1960, and (2) whether any work which may have been performed on or after that date was required to complete the subcontract of the plaintiff Austin.

Judgment reversed.