U.S. Government – The Miller Act Lien Summary

Subcontractors to the prime contractor, suppliers of labor or material to the prime contractor, and sub-subcontractors and suppliers of labor or materials to first-tier subcontractors. This includes individual laborers. It does NOT, however, include employees and trust funds of a sub-subcontractor who are claiming benefits and plan contributions. Suppliers to suppliers are not covered. NOTE that, for Miller Act purposes, a subcontractor includes one who supplies “necessary material” and one who performs for and takes from the prime contractor a specific part of the labor or materials required by the original contract. A direct contract with the prime contractor is a prerequisite in determining whether a party is a subcontractor. Note, however, that one who supplies rental equipment may make a claim, and that claim can include equipment rented by the rental company from a third party and then re-rented to the subcontractor. A subcontractor must have a substantial and important relationship with the prime contractor. A middleman who supplies crucial steel framework by arranging for the fabrication and delivery to the site of a substantial amount of structural steel, as well as preparing shop and erection drawings, will be considered a subcontractor. A contract to provide custom materials is not in and of itself enough to qualify a party as a subcontractor rather than a supplier, it is given substantial weight in the determination. NOTE ALSO that where the public body waives the bond requirement, no one can bring a Miller Act claim. NOTE ALSO that where a subcontractor provides on-site project management, supervision, and administrative and oversight services to the government contractor, this work will NOT be covered under a payment bond as labor; according to the court, where the work involves clerical or administrative tasks which do not involve physical toil or manual work, it is not covered by the payment bond. NOTE ALSO that where subcontractor is an insider or alter ego of the general contractor, it will not be entitled to recover from the payment bond. NOTE that the terms of a payment bond cannot be more restrictive, or require additional notices, especially of a non-signatory sub-subcontractor. In other words, the terms of the bond itself cannot require more notices than those set out in the Miller Act. NOTE ALSO that where a general contractor defaults and its bonding company takes over the project and hires a contractor to complete the project, unless that contractor provides a payment bond, that contractor’s subs are considered second-tier subcontractors and must give the bond company the notice of claim if they are unpaid. NOTE that a lack of a state contractor’s license cannot be asserted as a defense to a Miller Act claim. NOTE that the court in Michigan has held that trustees of union employment benefit trust funds have a right and duty to enforce payment of contributions, and may bring a claim against the Miller Act bond. Louisiana has also allowed trustees of union employment benefit funds to recover benefits under the Miller Act, and also to recover prejudgment interest where the contract and state law authorize them. [40 USC §§3131 & 3141; Mo-Kan Iron Workers Pension Fund v. Travelers Cas. and Sur. Co., Not Reported in F.Supp.2d, 2012 WL 5933064 (D.Kan. 2012) (holding that pension funds cannot bring a claim for contributions not paid to a sub-subcontractor); U.S. ex rel. E & H Steel Corp. v. C. Pyramid Enterprises, Inc., 509 F.3d 184, (3^rd Cir. 2007); Felix Rivera de Leon v. Maxon Eng’g Services, Inc., 283 F. Supp. 2d 550 (2003); U.S. ex rel. Constructors, Inc. v. Gulf Ins. Co., 313 F.Supp.2d 593 (E.D.Va. 2004); U.S. ex rel. Johnson Pugh Mechanical, Inc. v. Landmark Const. Corp., 318 F.Supp.2d 1057 (D.Colo. 2004); Nagel Const., Inc. v. Crest Const. & Excavating LLC, Not reported in F.Supp.2d, 2006 WL 1806487 (W.D.Mich. 2006); U.S. ex rel. Ocean Const. Services, Inc. v. Liberty Mut. Ins. Co., Not Reported in F.Supp.2d, 2006 WL 2471651 (E.D.Va., Aug 24, 2006); Technica, LLC ex rel. U.S. v. Carolina Cas. Ins. Co., 749 F.3d 1149 (9^th Cir. 2014); U.S. ex rel. Ramona Equipment Rentals, Inc. v. Carolina Cas. Ins. Co., Not Reported in F.Supp.2d, 2010 WL 3489348 (S.D.Cal. 2010); U.S. for Use and Benefit of Intern. Broth. of Elec. Workers, Local Union 692 v. Hartford Fire Ins. Co., 809 F.Supp. 523 (E.D.Mich. 1992); U.S. ex rel. Regional Local Union No. 846, Intern. Ass’n of Bridge, Structural, Ornamental and Reinforcing Iron Workers, AFL-CIO v. Boh Bros. Const., Slip Copy, 2013 WL 5673609 (E.D. La. 2013)]

Note that factors to be considered in determining whether a claimant is a subcontractor (as opposed to a materials supplier) are discussed in Mosser Const., Inc. v. Travelers Indem. Co., 665 F.Supp.2d 875 (N.D.Ohio 2009), citing U.S. for the Use and Benefit of Conveyor Rental & Sales Co. v. Aetna Cas. & Sur. Co., 981 F.2d 448, 451-52 (9th Cir.1992). See also Schor at §1.014[B]; U.S. ex rel. Parker-Hannifin Corp. v. Lane Const. Corp., 477 F.Supp. 400 (M.D. Pa. 1979); U.S. ex rel. Consol. Pipe & Supply Co. v. Morrison-Knudsen Co., 687 F.2d 129 (6^th Cir. 1982)]

The prime contractor’s payment bond. The government generally does not become liable if no bond is provided. [40 USC §3133(b); Schor at §§1.01, 1.09; Arvanis v. Noslo Engineering Consultants, Inc., 739 F.2d 1287 (7^th Cir. 1984); but see Quality Mechanical Contractors, Inc. v. Moreland Corp., 19 F.Supp.2d 1169 (D.Nev.1998)]

A preliminary notice is not required.

All claimants contracting with or supplying to the subcontractor but not the prime contractor MUST give this notice. [40 USC §3133(b); Schor at §1.06[A]] NOTE that where an unpaid claimant agrees to work out a payment plan with its customer rather than file a claim, the surety will not subsequently be responsible for paying the claimant if the agreement is not honored. [U.S. f/u/b/o Damuth Services, Inc. v. Western Sur. Co, 368 Fed.Appx.383 (C.A.4 Va. 2010)] NOTE ALSO that a joint check agreement between the prime, first-tier sub and second-tier sub will not suffice as notice to the prime, nor does it create privity between the second-tier subcontractor and the prime contractor. [Plains Builders, Inc. vs. Steel Source, Inc., 408 S.W.2d 596 (Tex.App.2013)] NOTE ALSO that a sub-subcontractor cannot rely on a notice given by its customer, the subcontractor, to cover the claim of the sub-subcontractor, even if the subcontractor has (without permission from the general) assigned the sub’s rights to the sub-sub. [U.S. ex rel. Sun Coast Contracting Services, LLC v. DQSI, LLC, Slip Copy, 2014 WL 5431373 (M.D.La.2014); U.S. ex rel. Northwest Cascade Inc. v. Colamette Const. Co., Slip Copy, 2014 WL 5092253 (D.C.Or. 2014)] It may be possible for a claimant to claim that the prime contractor waived the notice requirement or is estopped from asserting the notice requirement, if the prime contractor did something that would reasonably lead the claimant to believe that it would be paid without having to provide the 90-day notice. It is not recommended that a claimant rely on a court making this kind of ruling. [U.S. ex rel. Franklin Paint Co. v. Kagan, 129 F.Supp. 331 (D.Mass.1955)]

To the prime contractor. [40 USC §3133(b)]

Within 90 days of claimant’s last delivery to or work on the project for which the claim is made. This notice is mandatory and must be timely given. Counting the 90 days starts with the day after the last delivery date; it is not advisable to give the notice before the last materials have been delivered. Notice must usually be received within 90 days of claimant’s last day, however where the notice is timely sent by certified mail and the post office attempts to timely deliver it, leaving notification of attempted delivery, the notice requirement will be met. In addition, where the 90^th day is a Sunday or holiday, delivery the following day is acceptable. [40 U.S.C. §3133; U.S. ex rel. Auburn Door & Hardware, LLC v. Suffolk Constr. Co., Inc., Slip Copy, 2013 WL 5329214 (D.Mass. Sept. 19, 2013); U.S. ex rel. Techno Coatings, Inc. v. AMEC Environment and Infrastructure, Inc., Not Reported in F.Supp.2d, 2013 WL 2253161 (N.D. Ca. 2013); U.S. f/u/b P-1 Contracting, Inc. v. Quandel Group, Inc., 989 F.Supp.2d 593 (S.D.Ohio 2013) (notice timely sent and notification of attempted delivery timely left with recipient will qualify); Pepper Burns Insulation, Inc. v. Artco Corp., 970 F.2d 1340 (C.A.4 N.C., 1992) certiorari denied 113 S.Ct. 976, 506 U.S. 1053, 122 L.Ed.2d 130.; U.S. for Use and Ben. of B & R, Inc. v. Donald Lane Const., 19 F.Supp.2d 217 (D.Del.1998); U.S. ex rel. N.E.W. Interstate Concrete, Inc. v. EUI Corp., 93 F.Supp.2d 974 (S.D.Ind. 2000)]   There is a case, not much followed, that allowed the notice where is was timely mailed, but not timely received, but not all cases agree. [U.S. ex rel. Lincoln Electric Products C. v. Greene Electrical Service, 252 F. Supp. 324 (E.D.N.Y. 1966)] If there are more than 90 days between deliveries, and the deliveries are not clearly part of the same contract – for example if the items are purchased on open account – send the notice within 90 days of EACH delivery. NOTE ALSO that the time limit begins to run as to EACH contract. If there are several contracts on the same project, then there are several deadlines for giving the notice. It is not entirely clear, but if claimant is not paid for an earlier portion of the contract and then is subsequently paid for later portions of the contract, to be safe it is advisable to send the notice within 90 days of the last unpaid item on the contract (and not necessarily the last item on the contract, if the last item was paid for.) NOTE ALSO that where the customer does not pay for some deliveries but pays for later deliveries, the time for serving notice is calculated as of the date of the last unpaid delivery. NOTE ALSO that where all goods in a series of deliveries by a supplier on open account are used on the same government project, the 90-day notice is timely as to all deliveries if given within 90 days from the last delivery. [40 USC §3133(b); Schor at §1.06[C]; U. S. for Use of General Elec. Co. v. H. I. Lewis Const. Co., 375 F.2d 194 (C.A.2 (Vt.) 1967); U.S. ex rel. Country Boys Feed and Farm Supply v. Eickelmann, Not Reported in F.Supp.2d, 2010 WL 750059 (W.D.Mo.2010); Ramona Equipment Rental, Inc. ex rel. U.S. v. Carolina Cas. Ins. Co., 755 F.3d 1063 (C.A.9 2014)] Note also that repair and warranty work cannot be used to extend the notice deadline. [U.S. ex rel. Miller Proctor Nickolas, Inc. v. Lumbermens Mut. Cas. Co., Not Reported in F.Supp.2d, 2009 WL 962273 (E.D.N.Y.2009); U.S. for Use of American Builders & Contractors Supply Co., Inc. v. Bradley Const. Co., 960 F.Supp. 145 (N.D.Ill.1997)] Note further, that a case has held that where more than 90 days elapsed before the claimant was notified that funds would be withheld from its payment for work performed, the deadline for giving notice may be tolled. [AMEC Environment and Infrastructure, Inc. v. Structural Associates, Inc., Slip Copy, 2014 WL 1379519 (E.D.N.C. 2014)]

Any means that provides written, third-party verification of delivery; no longer limited to registered or certified mail. Recommend sending it by regular mail as well. May also serve in any manner in which the United States marshal of the district in which the public improvement is situated by law may serve summons. Notice must be actually received to be effective. If notice is actually received, the court may waive the requirement that it be served according to the methods listed above, though it’s best not to rely on that. [40 USC §3133(b); Schor at §1.06[B]; Pepper Burns Insulation, Inc. v. Artco Corp., C.A.4 (N.C.) 1992, 970 F.2d 1340, certiorari denied 113 S.Ct. 976, 506 U.S. 1053, 122 L.Ed.2d 130; U.S., ex rel. Triple S Alarm Co., Inc. v. Westfield Ins. Co., Not Reported in F.Supp.2d, 2011 WL 1042279 (E.D.Ark.,2011); U.S. v. Fidelity and Deposit Co. of Maryland, Not Reported in F.Supp.2d, 2013 WL 4829051 (D.Md, 2013)] Note that a case has considered the notice adequate where an employee of the sub-sub met with an employee of the contractor and gave him an invoice detailing the sub-sub’s work and stating the balance due, including a list of materials purchased for the project, and including sales receipts as well. [U.S. ex. Rel. Martinez v. Encon International, Inc., 571 F.Supp.2d 754 (W.D. Tex. 2008)] Another case has accepted notice given via email that included copies of the invoice and all other statutory requirements for the notice. The key issue is actual notice. U.S. f/u/b/o Cummins-Wagner v. Fidelity &Deposit Co. of Maryland, Not reported in F.Supp.2d, 2013 WL 4829051 (D.Md.2013)]

-Amount claimed. Note that a notice without an amount – e.g. from a trust fund stating that funds are owed but not stating how much – will not be adequate as a Miller Act notice.

-Name of the party to whom the material or labor were provided.

-Statement that the claimant is looking to the prime contractor for payment. Notice must be in writing. Per case law, the notice does not need to be signed by the claimant. NOTE that costs for repairing damaged equipment may be recoverable under a contract, but they are not recoverable under the Miller Act. [40 USC §3133(b); Schor at §1.06[B]; Trustees of Heating, Piping and Refrigeration Pension Fund. v. Milestone Const. Services, Inc. 991 F.Supp.2d 713 (D.Md 2014); Houston Fire & Cas. Ins. Co. v. U.S. for Use and Benefit of Trane Co., 217 F.2d 727 (C.A.5 (Tex.) 1954); U. S. for Use of A. & J. Friedman Supply Co. v. M. S. I. Corp., 246 F.Supp. 337 (D.C.N.J.1965) U.S. ex rel. Thyssenkrupp Safway, Inc. v. Tessa Structures, LLC, Not Reported in F.Supp.2d, 2011 WL 1627311 (E.D.Va.)]

More than 90 days but less than one year after the last day on which the claimant provided labor or materials to the project. It is not sufficient to only name and serve the general contractor in that time; the surety must also be named and served before the deadline expires. NOTE that this time period begins to run from the time subcontractor claimant last provides labor or materials, not the time the subcontractor’s replacement subcontractor last delivers labor or materials. NOTE ALSO that a court has determined that the last day a claimant provides labor or materials cannot be later than the date that the claimant’s contract was terminated. [See Tymatt, below.] NOTE that where the general contractor providing the bond files for bankruptcy, the stay does not apply to suits against the surety; the Miller Act deadlines still apply to claims against the surety. [U.S. ex rel. Fritzsche v. Lexon Sur. Group, Not Reported in F.Supp.2d, 2013 WL 3872947 (D.C.Neb. 2013)] NOTE ALSO that remedial or corrective work will not extend deadline for filing suit, nor do post-project tasks, such as repairs, removal of equipment, and final inspections. NOTE ALSO that at least one court has held that, where the filing deadline falls on a Saturday, Sunday or legal holiday, suit may be filed on the next business day. [See Tymatt, below.]   NOTE ALSO that where claimant’s contract requires claims be arbitrated rather than litigated, claimant may be required to arbitrate breach of contract claim while bond claim is stayed pending outcome of arbitration. If, however, the claimant is a sub-subcontractor, and the sub-subcontract does not have an arbitration clause but the subcontract has one, the claimant cannot be compelled to arbitrate its Miller Act claim. Furthermore, arbitrability in that situation is for the court, not the arbitrator, to decide. A claimant cannot be compelled to arbitrate a dispute that the claimant has not agreed to arbitrate. NOTE ALSO that the defendant’s place of business is a proper venue for suit where the contract is performed outside the United States. NOTE ALSO that a contractual venue clause may override the Miller Act venue provision. A court has held that by furnishing and supplying materials to a sub in a different state than where the project itself is located, the claimant is “performing and executing” the contract in the claimant’s own state, and venue may be had there. NOTE that where a sub-sub works or supplies materials beyond the date that the subcontractor performs, the subcontractor is not permitted to use the sub-sub’s last date of performance to extend the deadline for the subcontractor to file suit. [40 USC §3133(b); Schor at §1.07; U.S. ex rel. Lee Masonry Products, Inc. v. Finley, Not Reported in F.Supp.2d, 2009 WL 2568713 (W.D.Ky., 2009); GE Supply v. C & G Enterprises, Inc., 212 F.3d 14 (C.A.1 [Puerto Rico] 2000; Safe Environment of America, Inc. v. Employers Ins. of Wausau, 278 F.Supp.2d 121 (D.Mass. 2003); U.S. ex rel. PRN Associates, Inc. v. K & S Enterprises, Inc., Not reported in F.Supp.2d, 2007 WL 925267 (S.D.Ind. 2007) Lee & Rua Co. v. Great American Ins., Not Reported in F.Supp.2d, 2008 WL 1868633 (W.D.Wash.2008); U.S. for use of Lighting and Power Services, Inc. v. Interface Const. Corp. 553 F.3d 1150 (C.A.8 (Mo.) 2009; U.S. ex re. Norshield Corp. v. E.C. Scarborough, 620 F.Supp.2d 1292, (M.D.Ala.); Dunn Const., L.L.C. v. Gray Ins. Co., Not Reported in F.Supp., 2010 WL 231742 (W.D.La.2010) (regarding punch-list items); U.S. ex rel. Tymatt Industries, Inc. v. Allen & Shariff Const. Services, LLC, Not Reported in F.Supp.2d, 2013 WL 4110551 (D.C.Md.2013); Artistic Stone Crafters, Inc. v. Safeco Ins. Co. of America, Not Reported in F.Supp.2d, 2010 WL 317472 (S.D.Ga.2010) (contractual venue provision); Ricky Tittle Const. Co. v. Safeco Ins. Co. of America, Not Reported in F.Supp.2d, 2010 WL 2690572 (M.D.Ga.,2010) (post-project tasks will not extend deadline); U.S. ex rel. Kountry Wood Products, LLC v. Ohio Farmers Ins. Co., Not Reported in F.Supp.2d, 2013 WL 550562 (N.D.Ind. 2013); U.S. ex rel. Burkholder v. Connelly, Not Reported in F.Supp.2d, 2012 WL 4471599 (E.D.N.C.2012) (sub-sub’s last day of performance does not extend sub’s filing deadline.)]