USCA1 Opinion

March 25, 1994

NOT FOR PUBLICATION

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________

No. 93-1970
BROX INDUSTRIES, INC.,
Plaintiff, Appellee,
v.
H.J. STABILE & SONS, INC. ET AL.,
Defendants, Appellants.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Martin F. Loughlin, Senior U.S. District Judge]
__________________________
____________________
Before
Torruella, Circuit Judge,
_____________
Bownes, Senior Circuit Judge,
____________________
and Selya, Circuit Judge.
_____________
____________________
James E. Owers,
_______________

with whom

Sulloway & Hollis was

__________________

on brief

appellant Reliance Insurance Company

and Morgan A. Hollis, with w

________________
for appellant H.J. Stabile & So

Gottesman & Hollis was on brief

__________________
Inc.
Frank P. Spinella, Jr., with whom Hibbard & Spinella, P.A. was
______________________
_________________________
brief for appellee.
____________________
____________________

BOWNES,
BOWNES,
case

requires us

claim under a
evidentiary
therefore

Senior Circuit Judge.

Senior Circuit Judge.
_____________________
to rule on

payment bond.
hearing, held

granted

the timeliness of
The district

that

judgment

This diversity

the notice

for

BACKGROUND
BACKGROUND

court, after

an

was timely

and

plaintiff-appellee

Industries in the amount of $178,155.86.

I.
I.

a notice of

We affirm.

Brox

__________
We set forth a summary of the pertinent facts found
by the district court.
Stabile &

Son, Inc.

In June 1991 defendant-appellant H.J.

entered into a

contract with

Wal-Mart

Stores, Inc. to build a store in Seabrook, New Hampshire.

July 1991 Stabile obtained
appellant Reliance
is

the

real

subcontracted
Wal-Mart

a payment bond from co-defendant-

Insurance Company.

party

in

interest.

Reliance,
Stabile

with Atom Contracting Corp.

project.

Atom

In

of course,
subsequently

to do work on the

then subcontracted with

Brox to do

both on-site and off-site paving.

Under Stabile's contract with Wal-Mart all work was
to be

completed on the project by December 3, 1991.

By mid-

December Brox had not completed

a substantial portion of the

paving work under

its contract

with Atom.

Stabile instructed

Brox that

it should cease

the project due

to the onset of winter.

On December

13

operations on

Because all of the

parties recognized that paving cannot be done properly in the

-22

winter,

they agreed

spring to
Brox

that

complete the

work.

would return to the

anticipated
Stabile

doing so.

that

Brox would

return the

Stabile

fully expected

work-site in the
On December

substantial

work

23, 1991

remained

date

that

spring, and Brox

for

Brox notified
the

provided Stabile with an estimate of the remaining

stated

following

spring,
work, and

that the total amount of the paving work performed to

was $201,106.50.

Brox

invoiced Atom for

this work in

December 1991.
In February and March 1992, in response to concerns
of

Wal-Mart

about

conducted tests
employee

the

quality

of its work.

filled

in

of

Also

several

Brox's

paving,

Brox

in March

1992, a

Brox

potholes at

the

worksite

in

preparation for returning to the project.

By March of 1992 Stabile had paid Atom all sums due
for work performed by
Brox.

Atom, however,

Atom and its subcontractors, including

still owed Brox

done through December 13, 1991.

a

On March 18, 1992 Brox

notice of claim for that amount

Stabile.

Nonetheless, Brox

$178,155.86 for work

sent

to Reliance as surety for

anticipated that it would finish

the paving work in the spring under its contract with Atom.
On

May

14, 1992

intended to honor their

Hampshire
planned

wanted two
store, to

Atom

informed

Stabile that

contract, and that the State

roads,

which were

be paved by

June 1.

-3-

of New

contiguous to
On

it

the

June 4 Stabile

agreed to the additional

paving with a charge back

Although

are

Stabile

the

specifics

recognized that

unclear,

Atom would

shortly

be unable

contractual obligations, and therefore

to Atom.
thereafter

to meet

its

it sought to engage a

new contractor to complete the paving work.

On June

11, after a brief

bidding period, Stabile

and Brox entered into two contracts for the completion of the
paving at the project,
work.

On June 30

with Atom.

one for on-site and one

for off-site

Stabile formally terminated

its contract

Brox finished the paving work at the project.

In August 1992 Brox commenced a diversity action in

the

United States

District Court

Hampshire against Stabile and

for the

District of

Reliance seeking payment under

the bond issued by Reliance as surety for Stabile.

bond,

New

Under the

a party not in direct privity with the principal, such

as Brox, must

give notice of its

claim to:

the Principal,

the Surety, or the Owner, "within ninety (90) days after such
claimant did or

performed the last of the

furnished the last of

work or labor, or

the materials for which said

claim is

made."

No claim is

made that Brox failed to give

notice as

required to the Principal, Surety or Owner.

The principal defense
that

Brox's March

18, 1992

bond's requirements.
on two alternative

of Stabile

notice was

Brox moved for

theories.

and Reliance

untimely under

is
the

summary judgment based

It argued first that, assuming

-44

arguendo
________

that its

notice was

prejudice from the

the

bond.

untimely, Reliance

tardiness in order to bar

According to

Alternatively, Brox

Brox, no prejudice

maintained that

its

must show

recovery under
could be shown.

notice was

timely

under the bond.

The district court, in
1993,

an opinion dated August 18,

found that Brox's notice was timely.

district court, "[t]he crux of

whether [Brox's]

work

According to the

the case . . . appears

[was] completed

in December,

to be
1991."

Brox Industries, Inc. v. H.J. Stabile & Son, Inc., No. 92______________________
__________________________
426-L,

slip op.

at

6 (D.N.H.

August 18,

1993).

At

the

evidentiary
agreement

[about

[Brox's]

work

completed
notice
under

hearing the

a winter

under

its

that "[i]f
was

subcontract

. .

made then
with

Atom

. an

clearly
was

not

[Brox's] failure to give

within ninety days of that day would not bar recovery

Brox still had

Because the

and

winter hiatus

days, it held that Brox's

notice was

Id. at 7.
___

In response
the project

found that

the contract as of

the parties agreed to a

of greater than ninety

not untimely.

court eventually

substantial work to do on

December 13, and that

period,

hiatus]

on December 13, 1991 and

the bond."

tests

court stated

to Brox's

site in February
pothole

repairs,

argument that work

and March 1992,

reset

the

done at

i.e., quality
____

ninety-day

notice

the district court found that both the tests and the

-55

pothole repairs were remedial in nature

and did not "advance

the

at 5.

completion of

the project."

Id.
___

Accordingly,

under New

Hampshire law, the

above work

district court found

had no effect upon the

See Tolles-Bickford Co.

___ ___________________
This conclusion
been appealed.

ninety-day notice period.

v. School, 94 A.2d
______

and its predicate factual

The

that the

374 (N.H. 1953).

findings have not

court entered judgment for Brox

for the

full amount of its claim, and defendants appealed.

II.
II.
DISCUSSION
DISCUSSION
__________
The focus of this litigation has been twofold:
whether, given the circumstances
the

project, its notice of

the bond issued by

March 18, 1992

the notice

must demonstrate prejudice from the

in order to bar Brox's recovery.

court ruled in the

on

was timely under

Reliance; and (2) whether, if

was not timely, Reliance

delay

surrounding Brox's work

(1)

Because the district

affirmative on the first issue,

it never

reached the second.

Because this is a diversity action, the substantive
law
U.S.

of the forum
64,

78

timeliness

attaches.

(1938).

of Brox's

The
notice

Erie R.R. Co. v. Tompkins, 304

______________
________
parties'

arguments

hinge upon

two New

as to

the

Hampshire

Supreme Court cases.

In

American Fidelity Co.

______________________

(N.H. 1963) a claimant

v. Cray,
____

on a payment bond was

194 A.2d

763

precluded from

-66

recovering due to
Cray
____

late notice

was under a contract

of claim.

The principal

with the State

in

of New Hampshire.

It was required by statute to obtain a contract bond, and the

bond's notice
the version

requirement was prescribed by

of N.H.

RSA 447:17 in

statute.

effect at that

Under

time, in

order to obtain the benefit of the bond, a claimant for labor

performed or

materials furnished

after said claimant ceases to

"shall within

ninety days

perform said labor or

furnish

said materials . . . file . . . with the department of public

works and highways . . . a statement of the claim."
to

November 1958, Cray

principal on a
prior to the
down the
spring

completion of the

1959 the

another construction
claim with the proper
principal.

lubricants to the

highway construction project.

job for the

of

provided fuel and

winter.
surety
company.

From May

In late 1958,

project, the principal

It never returned.

completed
In May

the project

shut

In

through

1959 Cray noticed

authority for money owed to it

the

by the

Although Cray did not

principal
to

provide any materials to the

after November 1958 -- more than ninety days prior

its filing a claim under the bond -- Cray maintained that

it did not "cease"

bond at the
Cray

to furnish fuel and lubricants

time of

argued that

continuing one

the winter shutdown

its

agreement with

such that

the

the ninety day

under the

in November

1958.

principal was

notice requirement

-77

should have been

reviewing

tolled during the

the facts of

seasonal hiatus.

the case, the

After

New Hampshire Supreme

Court stated:
We cannot accept Cray's contention that
it ceased to furnish materials not in
November 1958, after
which date
no
materials were in fact furnished, but the
following spring when LaClair failed to
resume operations.
Id. at
___

766.

position
untimely.

Defendants

as Cray

was,

argue that
and

that

Brox

is in

its notice

is

the

same

therefore

Defendants' position is
the New

Hampshire Supreme Court's subsequent

England Metal Culvert Co.

_________________________
196

contractor on a highway
with

materials,
case in
State,

Cray, the
____
and

was

New England Metal Culvert the

_________________________

in

contractor
required

January

25, 26 and 27, 1961

1961

for

and pipe.

was under

by statute

the pipe was to

not delivered.

opinion in New
___

construction project placed a single

plaintiff

but the contractor

was

In

including a metal culvert

Delivery of
On April

the

by

v. A.E. Williams Construction Co.,

______________________________

A.2d 713 (N.H. 1963).

order

substantially undercut

to

various

As was the

contract with
obtain

be "as required."

the

bond.1

Id. at 714.
___

a metal culvert was delivered,

was not ready to receive the pipe, and it

In October 1961, after learning that the

____________________
1. On April 29, 1961 the notice requirement contained in RSA
447:17, see supra p. 7, was amended to require such a filing
___ _____
"within ninety days after the completion and acceptance of
the project."
-88

contractor was

in financial

notice of claim under

the bond for payment of

that it had delivered in

defaulted

on

the

construction through
December 1961

April.

project,

and

a new construction

the materials

the

surety

completed

construction company.
company was

hired by

In
the

This new company ordered the exact

pipe from the plaintiff

never delivered to, the

filed a

The contractor subsequently

a different

surety to finish the job.

same

straits, the plaintiff

that had been

ordered by, but

original contractor.

was delivered by plaintiff to the

Id.
___

The pipe

new contractor on December

13 and 15, 1961 and was paid for in a timely manner.

The court ruled that
notice

was timely

notice statute.
two

factors.

under

plaintiff's October 27,

the pre-amendment

Id. at 715.
___

version of

This conclusion was

First, the contract

1961
the

based on

between plaintiff and the

original contractor "was a single contract although separable

or

divisible

October, 27,

as to

deliveries."

1961, when the

its claim, although more

delivery of the

And

second, "[o]n

plaintiff first gave

than ninety days had

culvert it

materials, but was

Id.
___

had not then

additional deliveries on request."

Id.
___

elapsed since

ceased to

bound by its [original]

notice of

furnish

contract to make

Moreover,

the remaining pipe was furnished to the

job on December 13 and 15, 1961 for use
in carrying out the contract with the

State. Thus the plaintiff did not cease

to furnish materials within the meaning
of RSA 447:17 until December 15, 1961 . .
-99

in American
________
Fidelity
Co.
v.
Cray, supra,
the
______________
____
_____
plaintiff in this case had a single
contract for a series of deliveries of
specified materials.
Id.
___

Unlike

the situation

(citation omitted).

notice

filed within

ninety

December 15, 1961 would

requirements of

The court
days of

concluded
the

that "[a]

last delivery

on

have constituted compliance with the

the statute before amendment,

and permitted

recourse to the bond for recovery of the price of the culvert

delivered in April 1961."
although

Id.
___

plaintiff's filing

The court further held

was

premature,

notice satisfied the notice requirement.

Brox argues
plaintiff in

that it

the

that

premature

Id. at 716.
___

is similarly situated

New England Metal Culvert, and

_________________________

to the

that its notice

was therefore

timely.

Culvert, Brox
_______

had a single contract with

Brox

gave notice

passed

since

Nevertheless,

We

agree.

of its

its

As in New England Metal

__________________

claim, more

last

paving

out

factors,

we

on

days had

the

project.

at the time Brox gave its notice, it was still

eventually

carrying

At the time

than ninety

work

obligated to complete the paving work

Brox

Atom.

completed

Stabile's

after the spring thaw.

the paving

contract

believe, place

this

work

with
case

necessary

Wal-Mart.

for
These

squarely under

the

shadow cast by New England Metal Culvert.2

_________________________
____________________
2.

The

district

court

also

found,

consistent

with

New
___
in effect,

England Metal Culvert, that Brox's notice was,

______________________
prematurely filed. Brox Industries, Inc. v. H.J. Stabile &
______________________
______________
-1010

Accordingly, under the rule articulated

Hampshire

Supreme Court in

by the New

New England Metal Culvert, if a

__________________________

claimant is still obligated

its original contract
payment bond, such

to perform additional work under

at the

time notice is

as the one at

given under

issue here, the

notice is

not

untimely even if more than ninety days have passed since

the

last

work was

original contract.
viewed as
has

performed

by

In effect,

covering the claimant's

in the future --

yet been paid.

claimant

under

the

the claimant's notice can

not been paid, as well as

to perform

the

prior work, for

be

which it

the work that it is obligated

work for which it

has also not

The ninety-day notice period does

not begin

to run until the claimant actually completes the work that it

was contractually obligated to perform at the time notice was
given.

Thus, as

the New Hampshire Supreme Court

has noted,

although the claimant's notice is premature, it is valid.

At oral argument Reliance sought to distinguish New
___
England Metal Culvert on the ground that one contract was at
______________________
issue in that

case whereas two

the present case.

It

is clear, as in

contracts are implicated

Defendants' contention is not persuasive.

the present case,

New England Metal Culvert completed

__________________________
made the December 13

in

that the plaintiff in

its performance,

and 15 pipe deliveries, under

____________________
Son, Inc., slip op. at 7.
_________

i.e.,
____

a second

-1111

contract which required completion of

for under the original contract.
Although
statutory notice
requirement,

requirement, as
see

In

identical
and

to a

contractual

the New

Hampshire

the former would not apply

(N.H. 1971) (contractual subrogation

fact, the

identical statutory

notice requirement at

provision
subrogation

issue here

is

to the Miller Act's ninety-day notice requirement,

the New Hampshire Supreme Court has looked to Miller Act

cases in construing the

See
___

why

involves

See, e.g., Raitt v. National Grange Ins. Co.,

___ ____ _____
________________________

construed consistently with

right).

opposed

no reason

Supreme Court's interpretation of

285 A.2d 799

Id. at 714.
___

New England Metal Culvert

____________________________

we can

to the latter.

the performance called

pre-amendment version of RSA 447:17.

New England Metal Culvert,

___________________________

196

A.2d at

715

(citing

cases).
Aside
above,

from the two

the parties

New Hampshire

have focussed

cases discussed

their attention

on cases

construing
Act,

the ninety-day

40 U.S.C.

270b(a).

precedent under
these cases.

notice requirement in

the Miller

Because we have found controlling

New Hampshire

law, we need

not delve

into

Nevertheless, we note that the Miller Act cases

are not hostile to our holding.

On

the

performances,

question

we have

of

uncovered

ninety-day
only a

gaps

handful of

between
cases.

Those cases have held, where there is a break of greater than

-1212

ninety
orders,
______

days between

deliveries under

that the last delivery does not resurrect claims for

payment for

the earlier

deliveries.

Peter Reiss Constr. Co.,

__________________________
(Friendly,

J.).

the

273

F.2d

See United States v.

___ ______________
880

(2d

Cir.

1959)

This was essentially the issue in Cray, and

____

the court there reached

Cray,

a series of purchase
___________________

the same conclusion.

plaintiff never

made

any

Of

course, in

deliveries after

the

____
ninety-day plus hiatus.
performed
purchase

under a
orders,

On

the other hand,

contract,
a

as

greater

opposed

than

where work

to

ninety-day

is

series

of

interval

in

performances will not bar recovery on the earlier performance

despite the absence

of immediate

notice.

See
___

Id. at
___

United States v. Chester Constr. Co., 104 F.2d 648

_____________
____________________
1939).

882;

(2d Cir.

This was the situation in New England Metal Culvert,

_________________________

and the New Hampshire Supreme Court reached the same result.
The three Miller Act
in

cases relied on by defendants

their brief would not warrant a contrary conclusion.

first

case,

The

United States ex rel. J.A. Edwards & Co. v.

____________________________________________

Thompson Constr. Corp.,

________________________

273

F.2d

873

(2d

Cir.

1959),

concerned the substance of a notice of claim under the Miller

Act,

not

its

requirement.

timeliness

And the

under

the

ninety-day

notice

last two cases, United States ex rel.

______________________

John D. Ahern Co. v. J.F. White Contracting Co.,

_________________
__________________________

649 F.2d 29

(1st Cir. 1981) and A.B. Cooley v. Barten & Wood, Inc., 249
____________
____________________
F.2d 912 (1st

Cir. 1956), although more closely analogous to

-1313

the

instant

case, do

not

involve gaps

in

the claimant's

performance of greater than ninety days, and are therefore of

limited relevance.

This is particularly true

given the New

Hampshire Supreme Court's clear statement in this matter.

Defendants' have
decipher,

any substantive

failed to identify, and we cannot

distinction

Metal Culvert and the case at bar.

_____________
of the district court is Affirmed.
Affirmed
________

between New England

____________

Accordingly, the judgment

-1414