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July 17, 1992


The opinion of the court was delivered by: GEORGE H. REVERCOMB

 Plaintiff seeks recovery under the Miller Act (40 U.S.C. 270b) for allegedly unpaid construction material bills. Both plaintiff and defendants now move for summary judgment. The Court heard full argument on the motions at a hearing conducted on July 15, 1992, based on the facts as set forth in the parties' pleadings and affidavits. The parties agree that there are no material facts in dispute. For the reasons set forth below, the Court must order summary judgment in favor of the plaintiff.


 The essential facts are as follows. Defendant Becon Services Corporation was the prime contractor to the Department of the Army for a construction project in Washington, D.C. Defendant Aetna was Becon's surety on the contract. Becon subcontracted Olympus Glass to furnish a portion of labor and materials for the job. Olympus, in turn, contracted with defendant Marmet Corporation, a materialman, to supply materials. Olympus arranged with Becon to pay Marmet's billings with checks made payable jointly to Olympus and Marmet. Olympus also entered into a "retainage agreement" with Marmet under which Olympus would withhold for a period of months 10 percent of amounts owing to Marmet for materials it supplied. Becon was not privy to this retainage agreement, which Marmet characterizes without contradiction as "an adhesion contract" prepared by Olympus.

 Marmet provided all the materials ordered and, between June and November 1990, sent Olympus eight separate invoices which Olympus forwarded to Becon. In response, between September and December 1990, Becon issued four joint checks payable to Olympus and Marmet in the exact amounts stated on the Marmet invoices. *fn1" The dispute in this case arises from the circumstances surrounding these four joint checks.

 Becon points to the amount of these joint checks as "manifestly" indicating its espoused intent that the checks were to serve as full payment for Marmet's materials invoices. However, upon receipt of the first of these checks, which was made out for the combined amount of Marmet's first two invoices, Olympus' administrative manager wrote to Marmet on October 1, 1990, stating

 we are in receipt of a check from Becon Services in the amount of $ 138,153.00 which represents a partial payment on our account with them. This check has been issued jointly to us and your company as we requested it to be.

 We intend to endorse this check over to you under the following conditions.

 We will pay 90% of your invoice #34952 which amount [sic] to $ 83219 from this draw. A company check from Marmet Corporation will be issued to Olympus Glass in the amount of $ 54,933.60 and sent via Federal Express to Olympus Glass. . . .

 The amount proffered by Olympus -- $ 83,219 -- equals 90 percent of the amount of Marmet's first invoice, indicating the administrative manager's apparent belief that Becon was remitting payment for only one invoice. Marmet subsequently accepted the administrative manager's proposal, received and deposited the Becon check, and then sent Olympus a check for $ 54,933.60 -- presumably to cover $ 9,246.60 in retainage, i.e., 10 percent of the first invoice, and $ 45,687 in supposed excess to Marmet -- "believing that it was not entitled to keep more than $ 83,219.00 from [Beacon's] . . . check because of the information given to Marmet by the Olympus Glass letter of 10/1/90 and the terms of the supply contract regarding retainage." Marmet Statement of Undisputed Material Facts, para. 23.

 Regarding the second and third joint checks, Marmet states that Olympus did not request, and so Marmet did not pay, any retainage. However, Becon's fourth joint check, dated December 11, 1990, was payable in the amount of $ 104,276.00; on this check, "Marmet negotiated for a reduced retainage, and the two parties [Olympus and Marmet] agreed upon a retainage of $ 8,941.20." Plaintiff's Memorandum in Support of Summary Judgment at 4. As before, Olympus endorsed the Becon check and sent it to Marmet, and Marmet endorsed and deposited that check and sent Olympus its own check for $ 8,941.20. It is thus clear that Marmet received full payment, at least physically, for all eight of its invoices but voluntarily returned a total of $ 63,847.80 to Olympus in compliance with Olympus' directions pursuant to the retainage agreement. Ultimately, Olympus defaulted on its agreement to pay Marmet the retainage Marmet remitted. Marmet now seeks an award against Becon of $ 58,981.80 based on the following calculation: $ 267,646.63 sum due Marmet under contract w/Olympus $ 138,153.00 joint checks from Becon 10,818.00 3,477.00 104,276.00 $ 256,724.00 $ 15,000.00 other checks from Olympus 815.63 $ 15,815.63 $ 272,539.63 total checks to Marmet $ 54,933.60 amounts returned by Marmet 8,941.20 $ (63,874.80) total returned by Marmet $ (208,664.83) $ 208,664.83 amount retained by Marmet $ 58,891.80


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