Ramona Equipment Rental, Inc. Ex Rel. United States v. Carolina Casualty Insurance

dissenting:

I respectfully dissent. The Miller Act provides,

40 U.S.C. § 3133 (b)(2). This case involves a series of contracts under an open account. From January 2008 through July 2008, Otay paid only eleven of its eighty-nine invoices. Of the $706,917.62 Otay paid Ramona during the relevant time period, Otay allocated only $17,538.32 to this federal construction project. The remainder was allocated to a separate project. Ramona did not notify Candelaria until July 25, 2008 of the nonpayment. In the interim, Ramona assessed 1.5% monthly compounding interest on each outstanding balance.

A significant purpose of the 90-day notice provision in the Miller Act is to protect the general contractor and its surety. The potential extended duration of an open account relationship risks surprising the general contractor with an unforeseen and possibly staggering obligation. Requiring a subcontractor to provide notice at 90-day *1071 intervals is not overly burdensome, comports with the purpose of the Miller Act, and lessens the risk that a subcontractor might delay notice of outstanding debt for a greater profit.

I join the other courts that have adopted the more stringent notice…

Dissent by Judge ERICKSON.

OPINION

Candelaria Corporation (“Candelaria”), a prime contractor on a federal construction project, Carolina Casualty Insurance Company (“CCIC”), its surety, and Otay Group, Inc. (“Otay”), a subcontractor (collectively, “Defendants”), appeal the district court’s judgment in favor of Ramona Equipment Rental, Inc. (“Ramona”), Candelaria’s supplier of rental equipment, *1066 in Ramona’s action under the Miller Act, 40 U.S.C. §§ 3131-3134 . The suit involves Otay’s failure to pay for equipment rented from Ramona on an open book account. As required by the Miller Act, Ramona served Candelaria with notice of demand for payment within ninety days of the last day on which it furnished the equipment. The critical issue in this appeal is whether Ramona’s notice is timely as to rental equipment furnished more than ninety days before the notice. We hold that it is, and affirm the district court’s judgment.

I.

This dispute arises from a federal construction project known as ICE El Centro SPC — Perimeter Fence Replacement/Internal Devising Fence Replacement (the “Project”). Candelaria was the prime contractor on the Project and, in tandem with CCIC, provided a…

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RAMONA EQUIPMENT RENTAL, INC., No. 12-55156 for the use of the United States on behalf of a California corporation, D.C. No. Plaintiff-Appellee, 3:08-cv-01685-

H-MDD

v.

CAROLINA CASUALTY INSURANCE OPINION

COMPANY, a Florida corporation; CANDELARIA CORPORATION, an Arizona corporation; OTAY GROUP, INC., a California corporation, Defendants-Appellants.

Appeal from the United States District Court for the Southern District of California Marilyn L. Huff, District Judge, Presiding

Argued and Submitted October 11, 2013—Pasadena, California

Filed June 20, 2014

Before: Richard A. Paez and Andrew D. Hurwitz, Circuit Judges, and Ralph R. Erickson, Chief District Judge.*

Opinion by Judge Paez; Dissent by Judge Erickson

* The Honorable Ralph R. Erickson, Chief District Judge for the U.S. District Court for the District of North Dakota, sitting by designation. 2 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

SUMMARY**

Miller Act

The panel affirmed the district court’s judgment after bench trial in favor of the plaintiff in an action under…