40 U.S.C. § 270a(a)(2). In compliance with this requirement, Barlows Inc. provided a bond to the government with itself as principal and Eastern Indemnity Company of Maryland ("Eastern") as surety.
Upon default on the Barlow account, Greenwald attempted to obtain payment from Eastern on the Miller Act bond. Eastern, however, refused to pay, claiming that Greenwald had only contracted with Barlows Construction, while Eastern had only agreed to bond Barlows Inc. Eastern alleges that Greenwald was merely a supplier to a subcontractor (Barlows Construction) that provided materials to the contractor (Barlows Inc.) and therefore was not entitled to recover on the bond. The Court finds Eastern's allegations to be unsupported and concludes that an implied contract existed between Barlows Inc. and Greenwald.
GREENWALD HAD AN IMPLIED CONTRACT WITH BARLOWS INC. AND IS THEREFORE ENTITLED TO RECOVER FROM EASTERN UNDER THE MILLER ACT.
The Miller Act covers all suppliers with an express or implied agreement with the bonded contractor. 40 U.S.C. § 270b. See, e.g., United States ex rel. Greenwald-Supon v. Gramercy, 433 F. Supp. 156, 159 (S.D.N.Y. 1977). Initially, it is not clear that there was no express agreement between the parties in this case. Mr. Barlow clearly contracted with Greenwald for the provision of supplies in return for payment. While his account was nominally opened for Barlows Construction, the distinction between that company and Barlows Inc. is so blurred, that it is not clear that an express contract could not be found to exist between Greenwald and Barlows Inc.
More importantly, however, it is clear, that at the very least, Greenwald had an implied contract with Barlows Inc. It is well settled that the existence of a contract may be inferred from the actions of the parties. See, e.g., Richardson v. J. C. Flood, 190 A.2d 259 (D.C. App. 1963); 17 Am. Jur. 2d 336. Thus, if the Court finds that the parties' actions indicate that they understood that Greenwald was to deliver goods to Barlows Inc. at the Auditor's Building and that Barlows Inc. would use and pay for those goods, the Court must conclude that a contract existed between them. Yet, there can be little dispute that this is what happened here. Greenwald received an order on the Barlow account to deliver goods to the Auditor's Building where only Barlows Inc. was employed. Greenwald delivered those goods, with the clear expectation of receiving payment for them. When Barlows Inc. used the goods in its construction it certainly had no reasonable expectation of receiving them for free. Furthermore, Barlows Inc. clearly indicated that it intended to pay for these goods by listing Greenwald as a creditor in its bankruptcy proceeding.
Eastern asks the Court to conclude that there was no contract between Barlows Inc. and Greenwald. Instead, to explain how Barlows Inc. came to use Greenwald's products, Eastern suggests that Barlows Inc. received Greenwald's goods through a subcontractor, Barlows Construction, with whom Greenwald had an express contract. In this scenario, Greenwald has no contractual relationship with Barlows Inc. and therefore has no entitlement to the Miller Act bond. There are several problems with this view, however. First, defendants have admitted in interrogatories that Barlows Construction did no work on the Auditor's Building. Second, there is no evidence that any subcontracting arrangement existed between Barlows Inc. and Barlows Construction. Finally, even if there was a subcontracting arrangement, the Court finds that Greenwald complied with the Miller Act requirements for such a situation. See 40 U.S.C. § 270b(a).
Under the Miller Act, if Greenwald was a supplier to a subcontractor, Greenwald would have been obligated to give notice to Barlows Inc., the principal contractor, within ninety days from the date on which the last materials for which recovery is sought were furnished. Here, Greenwald sent a statement to the office occupied by both Barlows Inc. and Barlows Construction. While the statement was addressed to Barlows Construction, because the office to which it was sent and the personnel who received it were identical, the Court is convinced that Barlows Inc. did in fact have notice of this debt. Further, the Court holds that such actual notice was sufficient to satisfy the requirements of the Miller Act even though it was not in strict compliance with the Act's notice provisions. See, e.g., United States ex rel. Hillsdale Rock Co., Inc. v. Cortelyou & Cole, Inc., 581 F.2d 239 (9th Cir. 1978).
In sum, the Court concludes that Greenwald is entitled to recover under the Miller Act because it had an implied contract with Barlows Inc. and thus is entitled to the protection of the Barlows Inc./Eastern bond. Further, even if there was no implied contract, the Court would hold for plaintiff because the Court concludes that it complied with the Miller Act requirements for a supplier to a subcontractor.
An order in accordance with the foregoing will be issued of even date herewith.
For the reasons set forth in the opinion of even date herewith, it is, this 26th day of July, 1983, hereby
ORDERED that the plaintiff's motion for summary judgment is granted, defendants' motion for summary judgment is denied and this case shall stand dismissed.
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