East Quincy Services District v. General Accident Insurance Co. of America

Nominal plaintiff East Quincy Services District (the District) filed a “Complaint in Intervention” [sic], which interpled General Accident Insurance Company of America (the Surety) and the Division of Labor Standards Enforcement (the Division) as defendants contesting entitlement to funds the District was holding. The defendants subsequently stipulated to the dismissal of the District from the lawsuit.

The gist of the dispute was whether the District should deduct penalties for prevailing wage and overtime violations on its public works project from the balance of the contract price otherwise owing to defendant Surety. (The Surety funded the completion of the project after its principal defaulted.) The defendants filed' cross-motions for summary judgment. The superior court denied the Division’s motion and granted defendant Surety’s motion, ruling the funds were no longer owed to the contractor and thus were not “payments to the contractor of money due under a contract” out of which the penalties are forfeited by operation of law. The Division challenges this conclusion. We agree and shall reverse with directions.

Facts

We review the superior court’s ruling on a motion…