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10/02/90 DISTRICT COLUMBIA (NOS. 87-1330 & 87-1494)

October 2, 1990

DISTRICT OF COLUMBIA (NOS. 87-1330 & 87-1494), CUMBARI ASSOCIATES, INC. (NO. 87-1331), AND JOSEPH E. PIGNATARO (NO. 87-1331), APPELLANTS
v.
HARRY CAMPBELL, APPELLEE



Appeals from the Superior Court of the District of Columbia; Hon. Paul R. Webber, III, Trial Judge

Newman,* Ferren, and Farrell, Associate Judges.

The opinion of the court was delivered by: Ferren

This case arises out of a payment dispute between a subcontractor and a prime contractor on the District of Columbia's project to renovate residential housing in the Bates Street area. *fn1 Appellee Harry Campbell, a partner in Cammore Enterprises ("Cammore"), the subcontractor, sued Cumbari Associates, Inc. ("Cumbari"), the general contractor, and its sole stockholder and officer, Joseph E. Pignataro, for renovation work Cammore performed on ten Bates Street project houses. Campbell prevailed. Cumbari and Pignataro, as appellants, assert numerous grounds for reversing the jury's verdict finding them jointly and severally liable for $133,800.06 in contract damages and $54,672.07 in quantum meruit. We reject all their arguments and summarily affirm the judgment against them in Part IV. of this opinion.

Campbell also sought to hold the District of Columbia liable for Cumbari's obligation because the District failed to require Cumbari to obtain a payment bond before awarding Cumbari a contract on the Bates Street project. Prime contractors on public work projects are required to obtain such a bond under D.C. Code § 1-1104 (1987) (the "Little Miller Act"). *fn2 The District moved for summary judgment before trial and for a directed verdict at trial. These motions were denied. After the close of evidence, the trial court granted a directed verdict for Campbell against the District under two alternate theories: (1) the District was negligent in failing to require Cumbari to obtain a payment bond; and (2) Campbell was a third-party beneficiary of a contract between the District and Cumbari, which the District breached by failing to enforce the Little Miller Act. The District's motion for judgment notwithstanding the verdict was denied. On appeal, the District repeats the arguments made to the trial court: that there is no private cause of action against the District for a negligent failure to enforce the Little Miller Act, that Campbell cannot recover under a third-party beneficiary theory, and that Campbell's suit against the District is barred in any event because he failed to comply with the notice requirements of D.C. Code § 12-309 (1989).

We conclude that Campbell did not comply with the notice requirements of § 12-309. In addition, we reject the two theories on which the trial court relied to exempt Campbell from the requirements of § 12-309. We therefore conclude Campbell's negligence claim against the District is barred. We further conclude that, although § 12-309 does not erect a barrier to contractual claims against the District, the District did not breach any contractual duty to Cumbari for which Campbell could recover as a third-party beneficiary. Accordingly, the judgment against the District is vacated and the case is remanded to the trial court with instructions to enter judgment in the District's favor.

I.

Although the facts giving rise to this dispute are complex and the record in this case is voluminous, most of those facts are relevant only to the arguments of Cumbari and Pignataro discussed summarily in the last part of this opinion. We therefore outline only the facts germane to the question of the District's liability, as follows: (1) the District contracted with Cumbari to renovate completely at least twenty-one houses in the Bates Street area, as well as to do other miscellaneous "customer service" and clean-up work at a number of other houses, for a total price of approximately $1.6 million; (2) the District did not require Cumbari to obtain a payment bond; (3) Campbell and Pignataro agreed with one another that Cumbari would subcontract the renovation work on ten of the houses in the Bates Street project to Cammore Enterprises; (4) Cammore performed most, but not all, of the contracted renovation work on the ten houses, as well as some "extra work" -- additional work on those ten and other houses; (5) Cumbari failed to pay Campbell the full amount Campbell claimed he was owed; (6) Campbell's claim against Cumbari and Pignataro was based on both contract and quantum meruit theories; (7) the amount claimed by Campbell fluctuate throughout the course of the litigation; and (8) Campbell notified the District of his claim against the District by filing a complaint in the Superior Court.

II.

As a threshold matter, we must decide whether Campbell has met statutory notice requirements. D.C. Code § 12-309 provides:

An action may not be maintained against the District of Columbia for unliquidated damages to person or property unless, within six months after the injury or damage was sustained, the claimant, his agent, or attorney has given notice in writing to the Mayor of the District of Columbia of the approximate time, place, cause, and circumstances of the injury or damage. A report in writing by the Metropolitan Police Department, in regular course of duty, is a sufficient notice under this section.

This provision is designed "to (1) protect the District of Columbia against unreasonable claims and (2) to give reasonable notice to the District of Columbia so that the facts may be ascertained and, if possible, deserving claims adjusted and meritless claims resisted." Pitts v. District of Columbia, 391 A.2d 803, 807 (D.C. 1978).

Campbell does not claim to have notified the Mayor of the District of Columbia in any manner other than by filing his complaint. *fn3 Although it was arguably an open question at the time this suit was filed, we have since stated unambiguously that the filing of a complaint does not satisfy the notice requirement of § 12-309. See (William) Campbell v. District of Columbia, 568 A.2d 1076, 1078 (D.C. 1990); see also Gwinn v. District of Columbia, 434 A.2d 1376, 1378 (D.C. 1981) ("notice under § 12-309 is a 'condition precedent' to filing a suit against the District"). Campbell, therefore, did not give any notice adequate to satisfy the requirements of § 12-309. *fn4 The question remains, however, whether § 12-309 applies to any or all of Campbell's claims.

The trial court ruled that Campbell's claims were exempt from § 12-309 for three reasons: (1) the District as an entity wash aware of both the breach of duty and the injury, as in Shehyn v. District of Columbia, 392 A.2d 1008 (D.C. 1978); (2) Campbell's claim was for liquidated -- not unliquidated -- damages; and (3) § 12-309 has never been held to apply to contractual obligations. We address each of these theories in turn.

A.

In Shehyn we stated that § 12-309 applies to two types of claims: (1) claims arising out of the tortious conduct of employees of the District, 392 A.2d at 1013-14, and (2) claims "where the District itself is in breach of a duty but where, although necessarily aware of the breach, the District is not necessarily aware of the injury produced by the breach." Id. at 1014 (citation and parenthetical omitted). Accordingly, as to Shehyn's second category, § 12-309 compliance will be unnecessary only if the District is aware both of the breach and of the injury.

In this case, the trial court concluded that, as in Shehyn, the District as an entity was aware both of its breach of duty and of the injury produced by the breach. The court defined the District's breach of duty as its failure to require Cumbari to obtain a payment bond. The court defined the injury as "the lack of insurance guaranteeing payment to in the event the contractor failed to pay." It analogized the injury to "a negligent surgery case where ill effects are not manifested until years after the event causing injury." The court concluded that, even before Campbell was on notice of the District's breach or of his injury, the District was aware of both the breach and the injury because "in failing ...


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