Opinion
No. CV 99 0427298
August 7, 2008
MEMORANDUM OF DECISION RE MOTION TO DISMISS #189
FACTS
The history of this action is as follows; additional facts will be introduced as necessary. According to the record, in June 1999, the plaintiff, North Haven Construction Company, Inc. (North Haven) filed an application for a prejudgment remedy against one of the defendants, Banton Construction Co., Inc. (Banton). On September 30, 1999, the court, Pittman J., granted the plaintiff's application based upon a stipulation by the parties. On July 14 and 16, 1999, the plaintiff commenced this action by service of the writ of summons and complaint on Banton and the second defendant, Fidelity and Deposit Company of Maryland (Fidelity).
North Haven alleges the following facts in the complaint. In February 1995, North Haven and Banton entered into a contract for a construction project known as the Sinsabaugh Heights Expansion Project. At that time, Fidelity, acting as a surety, executed and delivered a payment bond in which it agreed to pay any sums that became due to North Haven under the contract. North Haven started working on the project in February 1995, but had to stop from March 1995, until November 11, 1996, because work on the project was suspended due to faulty plans and specifications. This suspension caused damages to North Haven in terms of increased costs, idle equipment and overhead. Banton refused to pay North Haven for these damages, and so did Fidelity, although North Haven gave it timely notice of its claim. Apparently, North Haven began working on the project again after November 11, 1996, and it alleges that it completed its work on August 1, 1998.
On August 20, 2007, after Fidelity filed the motion to dismiss that is before the court, North Haven filed a request to amend the complaint to which it attached its proposed amended complaint. In the proposed amended complaint, North Haven adds a count in which it alleges that Fidelity acted in bad faith in its conduct toward North Haven. Although the defendants filed an objection to the request to amend, they did not do so until September 18, 2007, which is beyond the fifteen-day time limit of Practice Book § 10-60(a)(3). According to § 10-60(a)(3), if a plaintiff files a request to amend the complaint and "no objection thereto has been filed by any party within fifteen days from the date of the filing of said request, the amendment shall be deemed to have been filed by consent of the adverse party."
Nevertheless, for the purpose of considering Fidelity's motion to dismiss, the operative complaint is North Haven's original complaint. This is so because Fidelity's motion to dismiss raises questions that pertain to the subject matter jurisdiction of the court, and "[o]nce the question of lack of [subject matter] jurisdiction of a court is raised . . . [it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding further with the case." (Internal quotation marks omitted.) D'Armo v. Smith, 273 Conn. 610, 616, 872 A.2d 408 (2005). If the court denies Fidelity's motion, the amended complaint will become the operative complaint.
These additional facts are gleaned from the evidence submitted in connection with the motion to dismiss. Banton was the general contractor on the project, and North Haven was a subcontractor. Sinsabaugh Heights is a housing project for the elderly that is owned by the housing authority for the city of Shelton. In their subcontract, North Haven and Banton agreed to be bound by the terms of Banton's contract with the housing authority. The subcontract provided that North Haven would pay damages to Banton as a result of delays caused by North Haven, but it did not contain a provision for Banton to pay damages to North Haven resulting from delays caused directly or indirectly by Banton, or though no fault of Banton. Banton, as principal, and Fidelity, as surety, entered into the bond agreement on the project on January 19, 1995. From January to March 1995, the project experienced delays on 71 days for various reasons. The housing authority suspended work on the project for 149 days from May 1995 to November 1996, due to problems associated with the project's plans. North Haven requested that Banton compensate it for the costs of its idle equipment, lost labor and other costs caused by the delays in two letters that it mailed to Banton in March and May 1995. In August 1998, North Haven sent two letters to Banton in which it again brought up the issue of the unpaid delay claim. On October 5, 1998, North Haven sent a letter to Fidelity requesting payment for the delay claim under the bond. Neither Banton nor Fidelity paid North Haven for the delay costs.
North Haven brings this action to recover the losses it allegedly incurred as a result of the suspension of work. In count one of the three-count complaint, it seeks to recover these losses from Banton pursuant to its subcontract with Banton. In count two, it seeks to recover its losses from Fidelity pursuant to the payment bond. In count three, North Haven adds allegations that in September 1995, Banton submitted a claim to the housing authority for the damages that Banton incurred as a result of the suspension of work. The claim included $737,000 for North Haven's idle equipment. In October or November 1995, the housing authority paid Banton $300,000 on this claim, but Banton did not inform North Haven of the payment, and converted this money for its own use.
On April 11, 2007, the court entered a scheduling order in which it scheduled the matter for trial on July 17, 2007. On June 29, 2007, Fidelity filed a motion to dismiss North Haven's action as it pertains to Fidelity on the ground that the court lacks subject matter jurisdiction. North Haven filed an objection to the motion to dismiss on August 22, 2007. The matter was heard at short calendar on April 28, 2008. Fidelity filed supplemental memoranda on February 19, and May 29, 2008, and North Haven filed supplemental memoranda on March 19, and June 20, 2008. Both parties submitted affidavits, deposition excerpts and numerous documents in support of their respective positions.
DISCUSSION
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Cox v. Aiken, 278 Conn. 204, 210-11, 897 A.2d 71 (2006). "When a . . . court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Id., 211. "Where, however . . . the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue and need not conclusively presume the validity of the allegations of the complaint." (Internal quotation marks omitted.) Ferreira v. Pringle, 255 Conn. 330, 346-47, 766 A.2d 400 (2001).
Inasmuch as the construction project at issue involved work on a public housing project, North Haven's claim against Fidelity deals with the proper application of Connecticut's Little Miller Act, General Statutes §§ 49-41 through 49-43. As our Supreme Court has noted, "General Statutes §§ 49-41 through 49-43, which provide for the furnishing of bonds guaranteeing payment (payment bonds) on public works construction projects, were enacted to protect workers and materials suppliers on public works projects who cannot avail themselves of otherwise available remedies such as mechanic's liens . . . Section 49-41 requires that the general contractor provide a payment bond with surety to the state or governmental subdivision, which bond shall guarantee payment to those who supply labor and materials on a public works project . . . Section 49-42 provides that any person who has performed work or supplied materials on a public works project, but who has not received full payment for such materials or work, may enforce his right to payment under the payment bond. This legislation, known as the `Little Miller Act' . . . was patterned after federal legislation popularly known as the Miller Act; 40 U.S.C. § 270a through 270d; and, therefore, we have regularly consulted federal precedents to determine the proper scope of our statute." (Citations omitted, internal quotation marks omitted.) Blakeslee Arpaia Chapman, Inc. v. El Constructors, Inc., 239 Conn. 708, 714-16, 687 A.2d 506 (1997).
Fidelity contends that the court lacks subject matter jurisdiction over North Haven's claim against it for two reasons; because the claim is time-barred under General Statutes § 49-42, and because North Haven failed to comply the with statutory notice requirements. North Haven counters that its claim against Fidelity is timely in that it brought the claim within the time frame stated in the bond, and, even if the language of the bond does not control, its claim is not barred by the statute. Further, North Haven argues that it complied with the notice provisions and its failure to do so, if any, is excused by Fidelity's failure to timely respond to North Haven's delay claim.
I Statute of Limitations
Regarding Fidelity's first argument, as a general rule, a statute of limitations defense "must be specially pleaded and cannot be raised by a [motion to dismiss]." Ross Realty Corp. v. Surkis, 163 Conn. 388, 391, 311 A.2d 74 (1972); see also Practice Book § 10-50. Nevertheless, "[w]here a specific time limitation is contained within a statute that creates a right of action that did not exist at common law, then the remedy exists only during the prescribed period and not thereafter . . . In such cases, the time limitation is not to be treated as an ordinary statute of limitation, but rather is a limitation on the liability itself and not of the remedy alone . . . [U]nder such circumstances, the time limitation is a substantive and jurisdictional prerequisite, which may be raised [by the court] at any time, even by the court sua sponte, and may not be waived." (Internal quotation marks omitted.) Ambroise v. William Raveis Real Estate, Inc., 226 Conn. 757, 766-67, 628 A.2d 1303 (1993). As to claims brought under the Little Miller Act, the Supreme Court has specifically stated that "[t]he provision of § 49-42 . . . which sets forth the time limitation within which suit must be commenced under the statute . . . is not to be treated as an ordinary statute of limitation, but as a jurisdictional requirement establishing a condition precedent to maintaining an action under that section." American Masons' Supply Co. v. F.W. Brown Co., 174 Conn. 219, 224, 384 A.2d 378 (1978).
The first issue is North Haven's argument that the statutory time limit for bringing suit does not apply because the express terms of the bond provided a different time limit. North Haven asserts that the language of a payment bond controls when, as in the present matter, the statute has not been incorporated into the bond. In support of its position, North Haven cites Herbert S. Newman Partners, P.C. v. CFC Construction Ltd. Partnership, 236 Conn. 750, 674 A.2d 1313 (1996), in which the Supreme Court held that the defendants had to honor the terms of a payment bond that provided broader coverage than that provided for by the Little Miller Act. The court explained that, "in light of the plain language of § 49-41, the purposes underlying the statute, and the United States Supreme Court's construction of the Miller Act, we are persuaded that contracting parties who execute a payment bond pursuant to § 49-41 have the authority to expand coverage beyond that required by the statute." Id., 758. Furthermore, the court stated, "statutory requirements establish only a floor of protection beneath which the coverage of a payment bond cannot fall, rather than an upper limit upon the scope of a bond's coverage." Id., 757.
The coverage at issue in Herbert S. Newman Partners, P.C. did not, however, pertain to the issue of the time limit for bringing suit, but rather to whether the services provided by the plaintiff, an architectural firm, were covered by the bond. The defendants maintained that the plaintiff's work was not covered by the payment bond because "as a matter of law, the coverage of a payment bond executed pursuant to § 49-41 cannot be broader than the coverage required by the statute, and that the statute expressly protects only `persons supplying labor or materials.'" Id., 755. The payment bond provided broader coverage in that it stated in relevant part: "Any party, whether a subcontractor or otherwise, who furnishes materials or supplies or performs labor or services in the prosecution of the work under said contract, and who is not paid therefor, may bring a suit on this bond . . ." Id., 758. The Supreme Court found that by "including services as well as labor, without limitation to where the services were to be rendered, the terms of the payment bond afforded protection for the services rendered by the plaintiff." Id. Moreover, the court added, "[i]n the absence of any other countervailing policy reason, [the defendants] are bound by the express terms of the payment bond that they themselves drafted and executed. It is axiomatic that courts do not rewrite contracts for the parties." Id., 760.
North Haven maintains that the bond in this matter, which does not mention the Little Miller Act, should likewise be enforced according to its express terms. The bond states in relevant part: "Any suit under this bond must be instituted before the expiration of one (1) year from the date on which final payment under the contract falls due." (North Haven's Reply to Fidelity's Supplemental Memorandum, Exh. A.) The project was not completed until August 1998, and final payment, according to a letter from Banton to the housing authority, had not been made even as of June 17, 1999. ( Id., Exh. D.) Thus, under the terms of the bond, this action, which was commenced in July 1999, would not be time barred.
In its second supplemental memorandum, Fidelity calls attention to the recent decision in Paradigm Contract Management Co. v. U.S. Fidelity Guarantee Co., Superior Court, complex litigation docket at Stamford, Docket No. X08 CV 03 4001935 (April 10, 2008, Jennings, J.) ( CT Page 13179 45 Conn. L. Rptr. 385). In Paradigm, a subcontractor and a surety entered into an agreement which purported to toll the one year statute of limitations for actions brought on their payment bond. When the subcontractor commenced an action beyond the statutory limitations period, the surety moved to dismiss it on the ground that it was time barred. The subcontractor opposed the motion on the basis that the payment bond in question was not issued pursuant to the Little Miller Act because it did not incorporate the statute by reference. The court disagreed, pointing out that the tolling agreement stated that the defendant had issued a payment bond pursuant to General Statutes § 49-41, et seq. More importantly, the court emphasized that under Connecticut law, "[a]n express reference to the statute in the bond is not required . . . As a bond required by § 49-41 for a public works project `the bond and the statute, therefore, are to be construed together.' American Masons' Supply Co. [v. F.W. Brown Co.], supra, 174 Conn. 225 (citing New Britain Lumber Co. v. American Surety Co., [ 113 Conn. 1, 5-6, 154 A. 147 (1931)], where the court said: `Where a statutory bond is given, the provisions of the statute will be read into the bond . . . If the law has made the instrument necessary, the parties are deemed to have had the law in contemplation when the contract was executed.')." (Citation omitted.) Paradigm Contract Management Co. v. U.S. Fidelity Guarantee Co., supra, 45 Conn. L. Rptr. 387-88.
Like North Haven and the plaintiff in Herbert S. Newman Partners, P.C., the subcontractor in Paradigm also argued that the Little Miller Act merely provides a floor of protection and hence parties are permitted to adopt a less restrictive time limitation for bringing suit. The Paradigm court rejected this argument as well, again relying on statements from our Supreme Court. "In the court's opinion this argument takes the concept of liberal construction and freedom to agree to expanded bond coverage a step too far, because it tries to carry those concepts from the area of bond protections into the realm of enforcement mechanism. As the court said in Blakeslee Arapia Chapman, Inc., supra, 239 Conn. at 716: `The federal precedents, like our own, counsel liberal construction of statutory requirements other than those relating to specific time constraints.' The specific time constraint here at issue, the one-year statute of limitations of Conn. Gen. Stat. § [49-42(b)], is no ordinary statute of limitations. It is a jurisdictional requirement establishing a condition precedent to maintaining an action under the Little Miller Act — a cause of action which did not exist at common law. American Masons' Supply Co. v. F.W. Brown Co., supra, 174 Conn. at 224. The statute having created the cause of action and prescribed the procedure, the mode of proceeding is mandatory and must be strictly complied with." (Emphasis in original.) Paradigm Contract Management Co. v. U.S. Fidelity Guarantee Co., supra, 45 Conn. L. Rptr. 388. Finally, the court observed that allowing the parties to modify the one-year limitation period of § 49-42(b) "would be to contravene the established doctrine that parties cannot by agreement confer subject matter jurisdiction upon this court." Id., 389.
The case at hand presents a factual scenario closer to Paradigm, where the parties tried to contract around the statute of limitations, than to Herbert S. Newman Partners, P.C., where they sought to expand the scope of services covered by the payment bond. North Haven also seeks to use contractual language to avoid the statutory time limitation. This court finds the reasoning of Paradigm persuasive and agrees that parties cannot confer subject matter jurisdiction by contract. As the Supreme Court has stated in discussing a different aspect of the Little Miller Act, "if the statute itself imposes specific constraints, we have held these to be mandatory; if the statute leaves room for construction, we have construed its requirements liberally in order to implement the statute's remedial purpose." Okee Industries, Inc. v. National Grange Mutual Ins. Co., 225 Conn. 367, 374, 623 A.2d 483 (1993). Therefore, the statute of limitations provided by § 49-42(b) is applicable, the language of the bond notwithstanding.
The next question is how the applicable limitations period should be calculated. The parties agree that the 1995 version of the Little Miller Act is the controlling statute, as it is the version that was in effect when the bond was signed in January 1995. See American Masons' Supply Co. v. F.W. Brown Co., supra, 174 Conn. 225 ("it is the statute in force at the time of the execution of the contract which controls"). In addition, it is established that service of prejudgment remedy documents that, like those filed by North Haven in this case, do not include a writ of summons, a signed complaint and a return date, is not sufficient to commence an action or to toll the statute of limitations. Raynor v. Hickock Realty Corp., 61 Conn.App. 234, 242, 763 A.2d 54 (2000). Thus, the present action was commenced on July 14, 1999, when the writ of summons and signed complaint were served on the defendants.
Section § 49-42(a) (Rev. to 1995) states, in relevant part: "Any person who performed work or supplied materials for which a requisition was submitted to, or for which an estimate was prepared by, the awarding authority and who does not receive full payment for such work or materials within sixty days of the applicable payment date provided for in subsection (a) of section 49-41a, or any person who supplied materials or performed subcontracting work not included on a requisition or estimate who has not received full payment for such materials or work within sixty days after the date such materials were supplied or such work was performed, may enforce his right to payment under the bond by serving a notice of claim on the surety that issued the bond . . . If the surety denies liability on the claim, or any portion thereof, the claimant may bring action upon the payment bond in the superior court for such sums and prosecute the action to final execution and judgment."
Section § 49-42(b) (Rev. to 1995) states in relevant part: [N]o such suit may be commenced after the expiration of one year after the applicable payment date provided for in subsection (a) of section 49-41a, or, in the case of a person supplying materials or performing subcontracting work not included on a requisition or estimate, no such suit may be commenced after the expiration of one year after the date such materials were supplied or such work was performed." In turn, § 49-41a(a) (Rev. to 1995) provides in relevant part: "When any public work is awarded by a contact for which a payment bond is required by section 49-41, the contract . . . shall contain the following provisions; (1) A requirement that the general contractor, within thirty days after payment to the contractor by the . . . municipality, pay any amounts due any subcontractor . . . when the labor or materials have been included in a requisition submitted by the contractor and paid by . . . the municipality . . ."
Thus, the date on which the statute of limitations on a subcontractor's suit on a payment bond begins to run depends on whether the work at issue was included in a requisition or estimate. This issue may be relevant to the resolution of Fidelity's statute of limitations defense as follows. If the delay claim was included in a requisition, the limitations period would have begun to run thirty days after Banton received its settlement payment from the housing authority, which, according to the complaint, occurred in October or November 1995, and expired one year later, in November or December 1996. Under this scenario, North Haven's claim against Fidelity would be time barred, as it did not commence this action until July 1999. On the other hand, if the delay claim was not included in a requisition, under § 49-42(b), the statute of limitations would have begun to run on "the date such materials were supplied or such work was performed," and would have expired one year later. General Statutes § 49-42(b). Whether North Haven's claim is barred under this scenario depends on how the phrases "such materials" and "such work" are construed.
At this point, further information is required to determine whether North Haven submitted a requisition for its delay claim. Although the subcontract delineates the manner in which North Haven was to submit to claims Banton for the work it performed on the project, it does not specify the manner in which delay claims were to be handled. The project experienced several delays from January to March 1995, and the housing authority halted work on the project in March 1995. In a March 15, 1995 letter, North Haven's general manager notified the president of Banton that North Haven would be seeking "compensation for loss motion experienced by the delay." According to the letter, this loss included "all projected costs resulting from labor, material, equipment and the inability to seek and perform other work. The total compensation due will be pro-rated at $2,450.00 per day." (North Haven's Reply to Fidelity's Supplemental Memo, Exh. F.) North Haven followed up with a letter dated May 1, 1995, in which it presented a breakdown of the per day cost of the delay with regard to both labor and nine pieces of equipment. ( Id., Exh. G.)
Neither party argues that the delay claim was included in an estimate.
The contract provided as follows: "COMPENSATION: The General Contractor agrees to pay the Subcontractor for the performance of his work the sum of [$900,000.00] subject to additions and deductions for changes as may be agreed upon and to make payments on account thereon as follows: By the 25th of each month the Subcontractor shall deliver to the General Subcontractor a detailed schedule of values, in duplicate, reviewed and agreed to by the Project Manager, showing value of work completed during the previous month, and not later than the 30th day of the following month, provided that payment has been received from the Owner for such work. The General Contractor shall pay the Subcontractor 90% of his detailed statement as approved by the Owner or his authorized representative. The balance shall be payable 30 days after the contract is completed and accepted." (North Haven's Objection), Exh. A., § 7.)
Meanwhile, Banton and the housing authority had begun to negotiate an agreement through which work on the project would be recommenced and the authority would pay various claims submitted by Banton. On September 5, 1995, Banton sent a letter to the housing authority to which it appended a document detailing its delay claims. That document included the following delay claim damages: "Delay #1" covered the suspension of work from January 18, 1995 to March 30, 1995. Under Delay #1, Banton claimed expenses of $272,042.62 for ten pieces of idle equipment — nine of which match those specified in North Haven's May 1, 1995 letter to Banton. ( Id., Exh. I.) The housing authority and Banton reached an agreement on October 31, 1995. ( Id., Ex. J.)
Fidelity asserts that because North Haven referred to its delay claim in its letters to Banton, and Banton included this claim in its own delay claims to the housing authority, a requisition was submitted. Fidelity also notes that the statute does not require that a particular requisition form be used. North Haven counters that Fidelity has not demonstrated that North Haven submitted a requisition for its claim. Furthermore, North Haven notes that the defendants deny that Banton received a payment from the housing authority and contends that "[t]he notice of claim `payment date' provision for a requisition subcontractor would not be triggered in this instance. To hold otherwise would be unfathomable, given Banton's conduct with respect to [North Haven's] claim." (North Haven's Reply to Fidelity's Supplemental Memo, p. 18.)
In an affidavit, Frank Pirovane, owner of North Haven, attested that "Banton told [North Haven] that no delay claim would be paid because the owner did not have any money for delay claims." (North Haven's Reply to Fidelity's Supplemental Memo, Exh. K, ¶ 29.) He also averred that North Haven was never told that Banton and the housing authority were negotiating a settlement ( id., ¶ 30), and that Banton never told North Haven that it had collected $300,000. ( Id., ¶ 34.)
The Little Miller Act does not define the term "requisition" or mandate the use of specific requisition forms. The federal Miller Act does not refer to requisitions at all. Thus, this court will look to the common and legal definitions of the word "requisition" in determining whether North Haven submitted a requisition for its delay claim. "Requisition" is commonly defined as "a formal written request for something that is needed." American Heritage Dictionary (2d College Ed. 1985). This is consistent with the legal definition of the word as meaning, inter alia, "[a] demand in writing, or formal request or requirement . . ." Black's Law Dictionary (6th Ed. 1990). Pursuant to these definitions, the court finds that the letters that North Haven submitted to Banton for its delay claim comprise a requisition for the following reasons: they contained North Haven's formal written request to be paid for the costs it would and had incurred as a result of the delay, and these claims were submitted to the authority in that Banton included them in the delay damage claims that it submitted to the housing authority in September 1995.
See Berlin Steel Construction Co. v. Trataros Construction, Inc., Superior Court, Docket No 05 4011659 (August 17, 2007, Scholl, J.) (court inferred subcontractor's claim was included in requisition in that project was completed and authority paid general contractor).
As previously noted, the possible consequence is as follows: if, as alleged in the complaint, the housing authority paid Banton in October or November 1995, the applicable payment date pursuant to § 49-41a would be thirty days later, or the end of November or December 1995. Therefore, North Haven would have been obligated to bring its claim against Fidelity within a year of that date, or by the end of November or December 1996. North Haven's claim against Fidelity, would thus be time barred because it did not commence this action until July 1999.
The problem is that the payment date is a disputed issue of fact. Specifically, in their answer, Fidelity and Banton deny the paragraph of the complaint in which the plaintiff alleges that Banton received the payment from the housing authority in October or November 1995. Furthermore, the evidence submitted by the parties does not resolve the issue. For example, the settlement agreement itself, which the parties signed on October 31, 1995, states that "THE AUTHORITY shall pay to BANTON the sum of . . . ($150,000.00) DOLLARS simultaneously with the execution of this Agreement. The remaining $150,000.00 balance of the settlement amount shall be paid to BANTON if, and only if, there are any remaining funds from the original construction budget and contingency reserve fund . . . at the conclusion of the Project . . . If there are funds left . . . but less than the $150,000.00 balance of the settlement amount, THE AUTHORITY shall pay BANTON the entire balance of those remaining funds upon final completion and acceptance of the Project by THE AUTHORITY." (Fidelity's Supplemental Memo, Exh. A.) While this suggests that Banton received a partial payment on October 31, 1995, it does not establish if and when an additional payment was made. Further, in a letter from Banton to Fidelity, Banton states that it received a final payment from the authority in September 1998, but it does not mention whether the final payment included any funds due under the settlement. (Fidelity's Supplemental Memo, Exh. G.) In addition, a letter from Banton to the housing authority indicates that the final payment for the project was still unpaid as of June 1999. (North Haven's Reply to Fidelity's Supplemental Memo, Exh. D.) Indeed, when W. Glenn Speicher, the regional managing attorney for Fidelity who investigated North Haven's claim, was asked a question about the final payment at his deposition on April 5, 2007, he replied "[for all I know, it has not yet been paid." ( Id., Exh. B, p. 38.) In short, neither party has presented the court with competent evidence of the date on which the statute of limitations would begin to run if the requisition portion of the statute applies.
II Notice of Claim
Fidelity also contends that the court lacks jurisdiction over North Haven's claims against it in that North Haven failed to comply with time limits of the notice requirements set out in § 49-42 as to both Banton and Fidelity. North Haven counters that its notice to Fidelity was timely, that it substantially complied with the notice requirement as to Banton, and that Fidelity waived its right to raise the argument as to the notice that it received in that it did not timely accept or reject the plaintiff's claim.
The initial question is whether Fidelity waived its defense that the notices were untimely by neither accepting nor rejecting North Haven's claim within ninety days of its receipt thereof, as required by § 49-42(a). The statute states the time within which the notices should be filed, and adds that "[w]ithin ninety days after service of the notice of claim, the surety shall make payment under the bond and satisfy the claim, or any portion of the claim which is not subject to a good faith dispute, and shall serve a notice on the claimant denying liability for any unpaid portion of the claim." General Statutes (Rev. to 1995) § 49-42(a).
In the absence of appellate authority, the judges of the Superior Court have reached different conclusions on the issue of whether a surety who fails to respond to a notice of claim within ninety days is precluded from raising the timeliness of the notice as a defense to a Little Miller Act claim. The plaintiff relies upon Acoustics, Inc. v. Travelers Ins. Co., Superior Court, judicial district of New Britain, Docket No. CV 030519565 (January 13, 2004, Cohn, J.) ( 36 Conn. L. Rptr. 476). In that case, the court concluded that "since the [defendant surety] did not, as required, respond to [the plaintiff subcontractor's] letter within ninety days, [the issue of whether the notice was timely] [is] not available as a defense." Id., 479. The court did not explain the reason for its conclusion, except by stating that it was relying on Barreira Landscaping Masonry v. Frontier Ins. Co., 47 Conn.Sup. 99, 779 A.2d 244 (2000). In Barreira, however, the court first determined that the defendants failed to sustain their burden of proof as to their defense that the subcontractor failed to provide a timely notice to the general contractor, and then concluded that the surety's failure to respond to the subcontractor's notice within ninety days precluded it from contesting the subcontractor's claim. Indeed, the court specifically stated that its determination that the surety did not comply with the ninety day provision, " [e]xcept for the defense of the statute of limitations . . . has preclusive effect on the defendant surety's special defenses and counterclaim . . ." (Emphasis added.) Id., 111.
Further, in discussing a related issue, in Gagliardi Electric, LLC v. Lawrence Brunoli, Inc., Superior Court, judicial district of Hartford, Docket No. CV 03 0827774 (July 15, 2004, Wagner, J.) ( 37 Conn. L. Rptr. 489, 491), the court found that a surety that fails to respond to a notice within ninety days is not precluded from raising a defense premised on the statute of limitations. The court explained that "[c]ontrary to [the plaintiff's] claim that damages must always be awarded when a surety fails to pay or deny a claim within ninety days, there appears to be no valid reason for preventing [the] defendant from raising a valid statute of limitations defense." Id. At least one federal court construing Connecticut's Little Miller Act reached the same conclusion. Fisher Skylights, Inc. v. CFC Construction Limited Partnership, 79 F.3d 9, 12 (2d Cir. 1996).
Given the absence of a statutory provision addressing the issue of waiver and our Supreme Court's apparent agreement with the statement that "§ 49-42(a) makes compliance with the statutory notice requirements a precondition to [a subcontractor's] recovery on the surety bond"; Okee Industries, Inc. v. National Grange Mutual Ins. Co., supra, 225 Conn. 370; the better reasoned conclusion is that a surety's failure to comply with the ninety day time limit for responding to a subcontractor's notice of claim should not preclude the surety from raising the issue of the timeliness of the notice as a defense to the subcontractor's action on a payment bond. Therefore, the court concludes that Fidelity did not waive its argument regarding the timeliness of the notices.
As to the merits of Fidelity's notice argument, our Supreme Court explained in Okee Industries, Inc. v. National Grange Mutual Ins. Co., supra, 225 Conn. 372, that the requirements of the notice provisions of § 49-42 involves "two somewhat conflicting lines of cases. On the one hand . . . § 49-42 is a statutory cause of action that had no antecedents at common law. The statute having created the cause of action and prescribed the procedure, the mode of proceeding is mandatory and must be strictly complied with . . . On the other hand . . . § 49-42 is a remedial statute enacted to provide security of workers and materials suppliers unable to avail themselves of the protection of a mechanic's lien . . . [S]uch statutory provisions are to be liberally construed." (Citations omitted; internal quotation marks omitted.). Further, the court noted, "[t]he federal precedents, like our own, counsel liberal construction of the statutory requirements other than those relating to specific time constrains . . . [T]he lower federal courts, except in cases involving the timeliness of notice, have eschewed the rule of strict construction." (Citations omitted.) Id., 374. Instead, the court noted with approval that federal courts have applied a substantial compliance test when the timeliness of the notice is not at issue, and in "[n]umerous decisions [the] federal courts of appeals have . . . held a timely written notice to be sufficient despite technical deficiencies in its contents if notice in fact was actually given and received." Id., 375-76.
The notice provisions of § 49-42 sets out two time limits that also depend on whether the subcontractor submitted a requisition as follows: "Any person who performed work or supplied materials for which a requisition was submitted to . . . the awarding authority and who does not receive full payment for such work or materials within sixty days of the applicable payment date provided for in subsection (a) of section 49-41a, or any person who supplied materials or performed subcontracting work not included on a requisition or estimate who has not received full payment for such materials or work within sixty days after the date such materials were supplied or such work was performed, may enforce his right to payment under the bond by serving a notice of claim on the surety that issued the bond and a copy of such notice to the contractor named as principal in the bond within one hundred eighty days of the applicable payment date provided for in subsection (a) of 49-41a, or in the case of a person supplying materials or performing subcontracting work not included on a requisition or estimate, within one hundred eighty days after the date such materials were supplied or such work was performed . . ." According to the Supreme Court, "[t]he statute . . . permits the surety to assert as a defense to an action on the bond not only a lack of timely notice to the surety itself, but also a lack of `a copy of the notice' to the general contractor." Okee Industries, Inc. v. National Grange Mutual Ins. Co., supra, 225 Conn. 371.
The court has previously determined that North Haven submitted a requisition for its delay claim, and that, pursuant to § 49-41a(a), the payment date was thirty days after Banton received the payment from the housing authority. Therefore, North Haven was required to submit its notices to Fidelity and Banton within two hundred and ten days after the date that Banton received the payment from the housing authority. It is undisputed that North Haven sent its notice to Fidelity on October 5, 1998. (Fidelity's Supplemental Memo, Exh. A.) Further, although the evidence does not establish that North Haven sent a copy of the notice to Banton, it alerted Banton that it intended to pursue its delay claim in a letter to Banton dated August 21, 1998 (North Haven's Objection, Exh. F); Fidelity apparently sent a copy of its notice from North Haven to Banton on November 10, 1998; (Fidelity's Supplemental Memo, Exh. D); and Banton acknowledged that it was aware of North Haven's claim on November 23, 1998. ( Id., Exh. G.) This provides evidence that Banton had actual notice of North Haven's claim. See Okee Industries, Inc. v. National Grange Mutual Ins. Co., supra, 225 Conn. 37* ([t]he fact that the general contractor had received actual notice at the proper time persuades us that the imperfections in the letter fall within the category of deviations that are insubstantial in the absence of demonstrated prejudice."). Nevertheless, the court cannot determine whether these notices were timely because, as explained above, the payment date is a disputed issue of fact and the parties have not presented evidence from which the court can determine the date.
CONCLUSION
Insofar as the motion to dismiss raises issues of fact that pertain to the subject matter jurisdiction of the court, an evidentiary hearing is required. See Standard Tallow Corp. v. Tallow, 190 Conn. 48, 56, 459 A.2d 503 (1983) ("[w]hen issues of fact are necessary to the determination of a court's jurisdiction, due process requires that a trial-like hearing be held, in which an opportunity is provided to present evidence and to cross-examine adverse witnesses."). As such, an evidentiary hearing will be held on Thursday, August 21, 2008 at 10:00 a.m.