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Contract – Miller Act – Cafeteria Renovation – No Written Change Orders

Deborah Elkins//September 8, 2010

Contract – Miller Act – Cafeteria Renovation – No Written Change Orders

Deborah Elkins//September 8, 2010

Defendants, a federal contractor and a Miller Act surety, win summary judgment in a tile subcontractor’s suit for payment of an additional $75,703 for replacement of floor tiles in a cafeteria in the Federal Law Enforcement Training Center in Glynco, Georgia; a Norfolk U.S. District Court says the parties’ contract required a written waiver of lien prior to payment to the sub, and a valid representative of the sub signed the waiver.

Prior to obtaining the last installment payment, the subcontractor Artistic Stone Crafters’ owner and manager signed a document entitled “Subcontractor Final/Partial Waiver of All Claims for and Right of Lien.” This document provided “the undersigned hereby waives, releases, and relinquishes all claims for labor performed, materials furnished, equipment and/or machinery supplied” and states no other person as any right to a lien of claim against the owner.

Under Virginia law, which applies under the subcontract’s choice of law clause, where the language of a release is clear and unambiguous, the agreement is controlling.

The release contains two waiver clauses: the first waives all claims against the contractor Tesoro and the second waives liens against property owned by Tesoro. Artistic’s claims fall within the first clause and are therefore governed by the release agreement. Artistic’s breach of contract and quantum meruit claims against Tesoro are dismissed with prejudice.

The breach of contract claim would fail in any event, as the subcontract clearly calls for a written change order. Alleged oral promises to pay by Tesoro’s operations manager, who allegedly said office “clerical problems” prevented Tesoro from generating the necessary written change orders, do not demonstrate a waiver of the written change order requirement.

Finally, Artistic does not have a cognizable claim for payment under Virginia law; therefore, it cannot seek reimbursement from the surety Safeco under the Miller Act, 40 U.S.C. § 3133.

Summary judgment for defendants.

Artistic Stone Crafters Inc. v. Safeco Ins. Co. Of America (Davis, J.) No. 2:10cv45, July 29, 2010; USDC at Norfolk, Va.; Marshall A. Winslow Jr. For plaintiff; Neil S. Lowenstein for defendant. VLW 010-3-454, 18 pp.

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