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UNITED STATES v. PENSACOLA CONSTRUCTION CO.

August 26, 1966

THE UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF MASON PEEVY, D/B/A PEEVY'S D-X SERVICE STATION, PLAINTIFF,
v.
PENSACOLA CONSTRUCTION COMPANY, A CORPORATION, MISSOURI VALLEY DREDGING CO., A CORPORATION, AND COMMERCIAL UNION INSURANCE COMPANY, A CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

OPINION

The motion of plaintiff filed herein August 11, 1966, for summary judgment and the response filed August 17, 1966, of defendants are before the court.

This suit was instituted under the Miller Act, and jurisdiction is granted by Sec. 270b of the Act, 40 U.S.C. § 270b, (1965 Supp.). The pleadings, exhibits thereto, interrogatories and answers thereto, the affidavit and exhibits in support of the motion for summary judgment, and the affidavits in support of the response to the motion show that there is no genuine issue as to any material fact. Rule 56(c), Fed.R.Civ.P., provides:

  "The judgment sought shall be renderdered forthwith
  if the pleadings, depositions, answers to
  interrogatories, and admissions on file, together
  with the affidavits, if any, show that there is no
  genuine issue as to any material fact and that the
  moving party is entitled to a judgment as a matter of
  law."

Because of the many delays in the formation of the issues now before the court, it seems necessary to refer rather fully to the pleadings. The complaint was filed April 11, 1966. In paragraphs VI, VII and VIII, it is alleged that the defendant Pensacola Construction Company (hereinafter referred to as Pensacola) was awarded a contract by the United States Government in the sum of $884,080.00 for bank stabilization revetments and dikes in Flat Rock Bend Pilot Channel Area of the Arkansas River in the Western District of Arkansas. The defendant Missouri Valley Dredging Company (hereinafter referred to as Missouri Valley) was awarded a portion of the work by the prime contractor, Pensacola.

A payment bond was executed by Pensacola and the defendant Commercial Union Insurance Company (hereinafter referred to as Insurance Company) as required by the Miller Act, 40 U.S.C. § 270a et seq., in the penal amount of the contract, which bond was conditioned for the payment of all claims for material or labor furnished or performed in connection with said contract. In the performance of the contract, Missouri Valley, for itself and Pensacola, purchased from the use plaintiff, Peevy's D-X Service Station (Peevy's) gasoline, oil, parts, materials and supplies in the principal amount of $1,174.49 between September 1, 1965, and December 27, 1965.

In paragraph IX of the complaint the use plaintiff alleged that it is entitled to recover jointly from the defendants the said sum of $1,174.49, "together with interest thereon at a lawful rate from the due date thereof, and a reasonable attorney's fee for the plaintiff's attorney herein, any penalties allowed by law, and the plaintiff's costs herein expended."

The three defendants were and are represented by the same firm of attorneys. The complaint was filed April 11, 1966. On May 2 Missouri Valley filed its motion for an extension of time in which to plead, and on May 3 Pensacola and the Insurance Company filed a motion for extension of time to answer. On May 3 an order was entered allowing defendants 20 days from the date of the order in which to answer or otherwise plead. On May 23 Missouri Valley was given 10 days additional time.

On May 23 Pensacola and the Insurance Company filed their answer, in which they prayed that the complaint of plaintiff be dismissed, or in the alternative that they be given judgment against Missouri Valley for such amounts as defendants may be held liable to plaintiff.

On June 2 Missouri Valley was granted a third extension until June 10 in which to answer or otherwise plead. On the same day Pensacola and the Insurance Company filed a cross claim against Missouri Valley. On June 10 Missouri Valley filed its answer, in which it admitted it owed the claim of plaintiff in the principal sum of $1,174.49. It further pleaded that it had tendered the said sum to the plaintiff and had offered to pay the costs of the action, which tender was declined by plaintiff. It paid into the registry of the court the said sum of $1,174.49, the principal sum, but made no offer or tender of interest on said sum. It also tendered to the Clerk a check in the amount of $15.00 for costs, and further offered to pay the charges of the United States Marshal for service of process when apprised of the amount of such charges. It was further alleged: "This defendant specifically denies that in law or fact plaintiff is entitled to penalty or attorney's fees."

On July 7 Missouri Valley served five interrogatories upon the use plaintiff. At that time the attorney for the plaintiff was engaged in a political campaign, and the court, upon the request of the attorney, granted the use plaintiff until August 15 to submit answers to the interrogatories. The interrogatories were fully answered on August 11, and on the same date the motion for summary judgment was filed by the use plaintiff. On August 17 the defendants filed their response to the plaintiff's motion for summary judgment, and on August 22 filed affidavits in support of the response.

In the response the defendants stated:

    "1. Plaintiff is not entitled to judgment against
  defendant Commercial Union Insurance Company for
  penalty or attorney's fees for the reason that
  plaintiff has never made a demand for payment prior
  to filing suit as required by Ark.Stat.Ann. Sec.
  66-3238.
    "2. Plaintiff is not entitled to judgment against
  defendants Pensacola Construction Company and
  Missouri Valley Dredging Company for penalty and
  attorney's fees for the reason that there is no
  federal or state legal authority for such award.
    "3. This court has lost jurisdiction by reason of
  payment by Missouri Valley Dredging Company of the
  claim which is the subject of federal jurisdiction,
  ...

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