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No. 85-175 IN THE SUPREME COURT OF THE STATE OF MONTANA
1985

ROBINTECH, INC., Plaintiff and Respondent,

WHITE & McNEII, EXCAVATING, INC. , and TRANSAM.ERICA INSURANCE CO., Defendants and Appellants.

APPEAL FROM:

District Court of the Fourteenth Judicial District, In and for the County of Musselshell, The Honorable Roy RodQhiero, Judge presiding.

COUNSEL OF RECORD: For Appellant: Landoe, Rrown, Planalp Eozeman, Montana For Respondent: Sardine, Stephenson, Blewett & Weaver; ~ i l l i a m D. Jacobsen, Great Falls, Montana
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Momrners; James M. Kommers,

Submitted on briefs: Aug. 15, 1985 Decided: November 6, 1985

Filed :

NO!/ 6 - 985

., .

Clerk

Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Defendants, prime contractor and its surety on a public works project, appeal summary judgment in favor of plaintiff, a materialman and supplier to a subcontractor, entered in the Fourteenth Judicial District, Musselshell County, on December 28, 1984. The District Court determined that as a matter of

law plaintiff was entitled to summary judgment in the amount of $47,639, pl-us interest at 6 percent and costs. We affirm. We hold that White
&

McNeil Excavating,

Inc., as the prime contractor, was bonded by Transamerica Insurance Company to assure payment to its materialman,

Robintech, under the public works bonding provisions in Part Two of Title 18, Chapter 2, MCA. We hold that White
&

McNeil

had adequate legal notice on Robintech's claim, and Robintech was entitled to payment under the contract and under the bonding statutes. Both parties moved for summary judgment claiming that the material facts were undisputed. appeal, White
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For its first issue on

McNeil challenges the court's conclusion that

Robintech was a supplier or a materialman to a subcontractor, alleging that Waterworks Supplies Company was a materialman and not a subcontractor. Therefore, appellant urges this

Court, Robintech supplied a materialman and is not protected by the bond. in
$

For its second issue, appellant alleges error ruling that Robintech complied with

the

court's

18-2-206, I I A by JC,

mailing invoices but failing to send

notice by certified mail of any claim upon the bond. The facts material to the summary judgment follow. On

June 9, 1982, the City of Roundup, Montana, entered into a public works contract with White
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McNeil Excavating, Inc.,

for the construction of water main improvements to be incorporated into the city water system. White
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McNeil, prime

contractors on the project, executed a payment bond with co-defend.ant Transamerica Insurance Company as surety. The payment bond contained the following language:

NOW, THEREFORE, if the PRINCIPAL shall romptly make payment - - persons, to all & corporations furnishinq Firms, materia.1~ for or ~erforminalabor in the prosecution of - - p;ovided t<e WORK -for in such contract, and any authorized extension - -or modification thereof, includinq all amounts - - materials. lubridue for cants, oil, gasoline, coal and coke, repairs on machinery, equipment and tools, consumed or used in connection with - construction - f- - WORK. o such - the [~mphasis added.]
.
-

....

A

further

provision

limited

the

claimants

entitled

to

coverage : PROVIDED, that beneficiaries or claimants hereund.er shall be limited to the SUECONTRACTORS, and persons, firms and corporations having a direct contract with the PRINCIPAL or its SUBCONTRACTORS. The general contract defined a "subcontractor" as "an individual, firm or corporation having a contract with the CONTRACTOR or with any other SUBCONTRACTOR for the performance of the WORK at the site." contract as
"

"Work" was defined in the

[all1 labor necessary to produce the construc-

tion required by the CONTRACT DOCUMENTS, and all materials and equipment incorporated - - - incorporated - or to be in the
PROJECT."

(Emphasis added.)

White

c

McNeil

contracted with Waterworks

Suppl-ies

Company as the sole direct supplier of pipe and all materials for the project, and Waterworks in turn contracted with Robintech to provide the pipe. Steve McNeil testified at his

deposition tha.t he knew when they "were quoted the job, tha.t

it was Robintech pipe."

Robintech shipped its pipe directly
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to the project and a representative of White for the pipe as consignee.

McNeil signed

The packing lists and receipts Before the project comple-

bore the Robintech letterhead.

tion, Betty White, secretary of the prime contractor, realized that Waterworks was not paying for the Robintech pipe, so she withheld payments to Waterworks. The City Council of Roundup met and approved final payment to White
&

McNeil on or about August 3, 1982.

On

August 30, 1982, Robintech mailed a notice to the City of its claim against the bond executed between White
&

McNeil and

Transamerica on the project, pursuant to notice requirements for a right of action, B 18-2-204, MCA. Defendants admitted

that copies of this notice were mailed to them the next day, August 31, 1982.

I

Appellant

contends

that Waterworks
&

Supplies was

a

materialman, not a subcontractor, to White

McNeil, and that Arguing

Robintech supplied one who was not a subcontractor.

that Rohintech did not have a direct contract with the principal or a subcontractor, appellant claims that Robintech did not qualify for protection under the limiting provision. We find no merit in appellant's contentions. works had a contract with the principal, White
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Water-

McNeil, to

provide materials, and Robintech had a contract with Waterworks to provide pipe. Robintech was covered under the Furthermore,

limiting provision as well as the general bond.

Robintech was protected under the bonding statutes for public works projects, 5 18-2-201, et seq., as a materialman providing materials for the prosecution of work under the contract.

First, appellant incorrectly argues that Waterworks was only a supplier and not a subcontractor, apparently from a misconception that a subcontractor must perform labor at the work site. White
&

McNeil contracted with Waterworks to

provide all its pipe for the public works project, knowing that the pipe would be supplied by Robintech. Under the

general contract, work encompassed both labor and materials incorporated into the project. subcontractor on the project. Waterworks was clearly a

The bond assured payment to a

corporation having a direct contract with a subcontractor. Robintech had such a contract and qualified under the limiting provision of the bond. Therefore, the prime contractor

or its surety was liable for payment. Second, Robintech is entitled to c1a.i.m on the bond

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