United States ex rel. Morgan & Son Earth Moving, Inc. v. Timberland Paving & Construction Co.

Morgan & Son (“Morgan”) brought this action under the Miller Act, 40 U.S.C. §§ 270a-270d (1982), to recover the balance due on an excavation subcontract with Timberland Paving & Construction Co. (“Timberland”). Timberland counterclaimed for indemnity against possible liability arising from Morgan’s alleged over-excavation. After trial, the district court awarded Morgan damages and dismissed the counterclaim. We affirm the dismissal of the counterclaim and reverse and remand for recalculation of the damage award.

FACTS AND PROCEEDINGS BELOW

Timberland was the general contractor on a Bureau of Indian Affair’s (BIA) road improvement project. Morgan subcontracted with Timberland to “clear, pioneer, drill, and shoot” a rock cliff for a “sum payment” based on 32,500 cubic yards at $2.513 per cubic yard.

During Morgan’s excavation, falling rock created a safety concern. A1 DeAtley, Timberland’s president, visited the job site, inspected the conditions, and determined that a serious safety problem existed. Various agencies inspected the site and agreed the job could not proceed in compliance with applicable safety regulations. On June 6, 1979 Timberland stopped work because of the…