The correspondence between plaintiff's counsel and the District put the District on notice. If it were only a question of the District asserting its priority rights under the Code, the District may well have waived its rights by its response to plaintiff's counsel. Indeed, it appears unlikely from the proofs that the District will assert any claim against the defendants under the Code.
The final settlement date, however, must also be considered in relation to its jurisdictional effect on other aspects of a suit of this kind which may be illustrated by developments in this very case. The Code contemplates a single action with claims of subcontractors being prorated if the bond is not sufficient. Here suit was filed about fifteen months before final settlement and no notice was given to other creditors by either party. As a consequence, other creditors are not before the Court and had no notice. One creditor, Kennedy Electric Company, Inc., having just learned of the suit by chance, moved to intervene during the course of the trial. To permit Kennedy to intervene would disrupt the entire progress of the case for the issues as to it have not been subjected to discovery or pretrial and some witnesses already heard would have to be recalled. If intervention were allowed other creditors might understandably follow the same course and further uncertainty and confusion would result.
In the normal case, the entire scheme for orderly procedure contemplated by the Code can only be achieved if subcontractor claimants observe the clear directive of the Code and no suit is filed until six months after final settlement. Cf. Aetna Casualty and Surety Co. v. Circle Equipment Co., 126 U.S.App.D.C. 275, 377 F.2d 160, April 3, 1967. The appropriate procedure is then for personal notice and notice by publication to be given to other potential creditors. While the Code is silent on the question, the obligation to give personal notice must be the prime contractor's, since he alone has knowledge of the identity and whereabouts of the various subcontractors. If such notice is not given, it would seem that the prime contractor should not be permitted to take advantage of the "one action" provision of the Code when later sued by a subcontractor without actual notice. The burden and expense of notice by publication should reasonably be borne by the plaintiff subcontractor.
No case of this kind should be permitted to come out of pretrial in the future without the Pretrial Examiner being satisfied that all appropriate notice has been given in reasonable time for applications to intervene to have been made. In this connection, the preferred procedure for defendant to follow where the issue of prematurity is raised in the future is to proceed by motion before trial, unless extremely complicated factual issues as to date of completion or final settlement are presented. The District of Columbia has a responsibility to answer all questions from interested parties and to assist them when uncertainties as to date of final settlement may arise.
In reaching this conclusion as to the meaning and effect of the Code, the Court is not unmindful of the doctrine that the provision "shall be liberally construed in aid of the evident public object - security to those who contribute labor or material for public works." Humphreys & Harding, Inc. v. District of Columbia etc., 110 U.S. App. D.C. 311, 293 F.2d 150 (1961). Where, however, rights are attempted to be asserted before the Code recognizes they have matured and the consequent effect is to prevent orderly and effective disposition of all claims and to impede the work of the Court, strict regard for Code provisions authorizing suit and governing the creation of jurisdiction in the Court seems essential.
The questions here presented are of first impression. Decisions cited relate mainly to late filings by creditors. District of Columbia v. American Excavation Co., D.C., 64 F. Supp. 19 (1946). Such decisions as there are dealing with prematurity in the initiation of the litigation appear to support the principal conclusion here reached. Aetna Casualty and Surety Co. v. Circle Equipment Co., 126 U.S.App.D.C. 275, 377 F.2d 160, April 3, 1967.
The complaint will be dismissed without prejudice or costs to either side. The motion to intervene filed by Kennedy Electric Company, Inc., is denied. Nothing in the foregoing is to be considered as passing on the merits of any aspect of the plaintiff's claim. Counsel will submit an appropriate order within one week.
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