By: A. Michelle West Construction Law Attorney, Smith, Currie & Hancock LLP.
The Miller Act protects subcontractors, suppliers, and other qualifying claimants on public projects from non-payment by requiring general contractors to provide a payment bond for federal construction projects in excess of $100,000. Because public projects are not subject to liens, the Miller Act is often a claimant’s best chance at being paid for its work. Courts have liberally interpreted the statute to broaden the field of qualifying claimants under the Miller Act.[1] A recent decision from the Eastern District of Virginia, however, reveals that the field of claimants does have limits. Supervisory work with incidental on-site physical impact does not receive the Miller Act’s protection.[2] This could have seriously implications on decisions defining what constitutes labor on cases across the country.
Project manager, Elliot Dickson, sued the general contractor, Forney Enterprises, and its surety under the Miller Act when Forney failed to pay him for his services. Dickson managed the repair and upgrade of a staircase at the Pentagon from November 2015 to February 2019. His duties were largely supervisory and included coordinating deliveries, inspecting materials, and performing field measurements. The Department of Defense terminated its contract with Forney and outlined a process for stopping work by January 31, 2019. Forney, in turn, instructed Dickson to wait for the final shipment of materials, inspect it, and then stop work. Dickson completed his inspection on February 8, 2019. He filed suit on February 5, 2020.
Forney moved for summary judgment, citing the statute of limitations and Dickson’s failure to perform “labor” within the meaning of the Miller Act, 40 U.S.C. § 3133(b). Under the act, Dickson must show that (1) he furnished labor and materials to the project covered by a surety bond; (2) that he was not paid within 90 days of the last day he provided labor or materials; and (3) that his suit is filed within one year of the last day upon which labor or materials were supplied.
The Court granted the general contractor’s motion. It relied on a Fourth Circuit case and a decision from the Eastern District of Virginia that excludes supervisory work unless the supervisor also performs manual labor. The Court held as a matter of law that Dickson’s supervisory work on-site did not constitute “labor” under the Miller Act.[3] The Court deemed Dickson’s inventory and occasional coordination and inspection of supplies as clerical work rather than manual labor. Therefore, it did not qualify for the protections of the Miller Act. Dickson argued that, because his supervisory work was performed on-site and included some de minimis physical work, he should fall under the Miller Act’s umbrella. The Court disagreed that the project manager’s minor physical exertion made him a Miller Act claimant. To accept that view would make every accountant or engineer who drafted paperwork on-site a proper claimant under the Miller Act, effectively rendering the labor requirement meaningless.
Because the Court found Dickson had not performed labor as envisioned by the Miller Act, it did not need to address the statute of limitations argument. The Court noted, however, that post-project clerical tasks like the final inventory on February 8, 2020, do not extend the life of the project. Dickson’s subcontract ended when Forney’s prime contract ended on January 31, 2019. Thus, Dickson’s lawsuit filed on February 5, 2020, three days before the year anniversary of his final inventory, was time-barred, even if the work he performed had qualified as “labor” under the Miller Act. The Court granted summary judgment in favor of Forney on both counts, leaving Dickson without relief under the Miller Act.
This case makes it clear that in the Eastern District of Virginia, only manual labor and tangible supplies to the project will receive the benefit of Miller Act protections. Supervisory, administrative, and clerical workers must content themselves with common breach of contract actions and pursue the general contractor directly.
Smith Currie provides comprehensive legal services to all parts of the construction industry across the nation. Smith Currie lawyers have decades of demonstrated success representing construction and federal government contracting clients “From the Ground Up,” including procurement matters, contract formation and negotiation, project administration, claims prosecution and, when necessary, in litigation and other forms of dispute resolution.
The views expressed in this article are not necessarily those of ConsensusDocs. Readers should not take or refrain from taking any action based on any information without first seeking legal advice.
[1] See U.S. for Use and Benefit of T.M.S. Mechanical Contractors, Inc. v. Millers Mut. Fire Ins. Co. of Tex., et al., 942 F.2d 946, 950 (Fifth Cir.1991)(citing Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 380 (1917)).
[2] Dickson v. Forney Enterprises, Inc., 2021 WL 1536574 (EDVA April 19, 2021) (slip opinion).
[3] U.S. for Use of Barber-Colman Co. v. U.S. Fid. & Guar. Co., 1994 WL 108502 at *3 (4th Cir 1994); U.S. ex rel. Constructors, Inc. v. Gulf Ins. Co., 313 F. Supp. 2d 593, 597 (E.D. Va. 2004).