Devin Strickland v. Arch Insurance Company

Filing

Opinion issued by court as to Appellant Devin B. Strickland. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.

Case: 17-10610

Date Filed: 01/09/2018

Page: 1 of 10

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-10610
Non-Argument Calendar
________________________
D.C. Docket No. 5:14-cv-00070-LGW-RSB
DEVIN B. STRICKLAND,
Plaintiff-Appellant,
versus
ARCH INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
________________________
(January 9, 2018)
Before TJOFLAT, MARCUS and WILLIAM PRYOR, Circuit Judges.
PER CURIAM:
Devin Strickland appeals the district court’s grant of summary judgment in
favor of Arch Insurance Company (“Arch”) on Strickland’s action to recover on a
payment bond issued by Arch.

Specifically, the district court concluded that

Case: 17-10610

Date Filed: 01/09/2018

Page: 2 of 10

Strickland’s claims on the bond were time-barred. On appeal, Strickland argues
that the district court erred in granting summary judgment on this basis. After
careful review, we affirm.
The relevant, undisputed facts are these.

Strickland provided sand to

Douglas Asphalt Paving Company (“Douglas”) for a Georgia Department of
Transportation (“GDOT”) road improvement project. The GDOT’s 2001 Standard
Specifications for the Construction of Transportation Systems were incorporated
into Douglas’s contract with GDOT. According to the Standard Specifications, the
contractor was obligated to provide any repairs until GDOT issued written final
acceptance. The contractor also had to furnish documentary proof of payment to
material suppliers. Arch issued a payment bond on behalf of Douglas for the
project in 2003. Arch agreed to pay all entities that supplied materials to Douglas.
In 2007, Douglas was no longer authorized to work on the project because GDOT
declared that the company was in default. In accordance with its performance
bond obligations, Arch took over Douglas’s work and arranged for completion of
the project by a third-party contractor.

Strickland did not supply sand after

Douglas was removed from the project.
In August 2010, GDOT determined that the work on the project was
substantially complete and ready for final inspection. In September 2010, the
third-party contractor requested final inspection, and it was performed. The punch
2

Case: 17-10610

Date Filed: 01/09/2018

Page: 3 of 10

list generated from the inspection -- listing work not yet conforming to the contract
specifications -- was complete by September 2011. In early 2012, Arch and its
contractor requested that GDOT accept the road improvement project for
maintenance. In its request, Arch told GDOT that the project had been open to
unrestricted traffic, all pay items were complete, and all punch-list work was
complete.

In February 2012, a GDOT area engineer requested maintenance

acceptance because the project had been satisfactorily completed. In March 2012,
GDOT accepted project maintenance responsibilities retroactive to September
2011. Arch received semi-final payment in July 2012, which was subject to a
review by an auditor. GDOT did not pay any additional money on the project.
In September 2012, Strickland sent a demand letter on Arch’s payment
bond. Arch acknowledged the claim and asked for additional documentation and a
proof of claim. Strickland did not respond to Arch’s requests. In 2014, Strickland
learned that GDOT was preparing to close out the project. A GDOT employee told
Strickland that he needed to file any claims he had immediately, as GDOT would
not close out a project if there was a pending lawsuit. Strickland filed the instant
action in August 2014.

Later that month, a GDOT employee stated in an

e-mail that the road improvement project at issue had not yet received final
acceptance and approval.

In September 2014, GDOT sent a letter of “final

acceptance,” which stated that the project had “been accepted” by GDOT as of
3

Case: 17-10610

Date Filed: 01/09/2018

Page: 4 of 10

April 17, 2012. According to a GDOT representative, the paperwork and close out
of the project took two years to complete; since September 2011, “final
acceptance” of the project had been pending the acquisition of a materials
certificate, which is GDOT paperwork stating that all materials used had been
certified and approved.
On this undisputed record, the district court granted summary judgment in
favor of Arch. It concluded that the one-year statute of limitations had run on
Strickland’s action because no genuine dispute of fact existed about the project
being completed and accepted in September 2011. This timely appeal follows.
We review a district court’s grant of summary judgment de novo, applying
the same legal standard as the district court and construing the facts and drawing
all reasonable inferences therefrom in the light most favorable to the non-moving
party. Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1314
(11th Cir. 2011). We will affirm a grant of summary judgment if the movant has
shown, based on our review of the entire record, “that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). A district court’s interpretation and application of a statute
of limitations presents a legal question that we review de novo. Mississippi Valley
Title Ins. Co. v. Thompson, 802 F.3d 1248, 1252 (11th Cir. 2015).

4

Case: 17-10610

Date Filed: 01/09/2018

Page: 5 of 10

We are unpersuaded by Strickland’s argument that the district court erred in
granting summary judgment on statute of limitations grounds. In diversity actions,
we apply the relevant state’s statutes of limitations. Cambridge Mut. Fire Ins. Co.
v. City of Claxton, Ga., 720 F.2d 1230, 1232 (11th Cir. 1983). Under Georgia law,
“[n]o action can be instituted on the payment bonds or security deposits after one
year from the completion of the contract and the acceptance of the public works
construction by the proper public authorities.” O.C.G.A. § 13-10-65. State law
also determines when a diversity action commences for statute of limitations
purposes. See Walker v. Armco Steel Corp., 446 U.S. 740, 752-53 (1980). When
the Supreme Court of Georgia construed the former statute governing bonds for
public contractors (which did not vary in any material way from the current statute)
it held that the one-year statute of limitations period for filing suit on a payment
bond “commences at the completion of the actual construction work and
acceptance thereof by the public authority.” U.S.F. & G. Co. v. Rome Concrete
Pipe Co., 353 S.E.2d 15, 16 (1987) (footnote omitted).
As applied here, Strickland’s argument that the project was not “completed”
until 2014 -- because the Standard Specifications provided that the contractor had
work obligations of maintenance and repair until the issuance of written final
acceptance -- lacks merit. The Supreme Court of Georgia has recognized that
“‘[c]ompletion’ . . . refers not only to total completion, but also to ‘substantial
5

Case: 17-10610

Date Filed: 01/09/2018

Page: 6 of 10

completion,’ with only punch-list items remaining to be done.” Id. at 16 n.1. In
Masonry Specialists of Ga., Inc. v. U.S. Fid. & Guar. Co., 616 S.E.2d 103, 105–06
(Ga. App. 2005), the Court of Appeals of Georgia noted that the project at issue
was completed in August 2002, when only punch-list items remained, and the
building was occupied and dedicated. Thus, under Georgia law, this type of
project is not considered incomplete simply because more work might be required.
Georgia courts focus on “completion of the actual construction work.” Rome
Concrete Pipe Co., 353 S.E.2d at 16. Strickland did not provide evidence to
contradict that the road project was substantially complete in August 2010, and the
punch-list items were completed in September 2011, both of which occurred well
over one year before this action was filed.
Nor are we convinced that a genuine dispute of material fact existed
regarding when GDOT “accepted” the work as complete. As we’ve said, the
statute of limitations under Georgia begins running at “the completion of the
contract and the acceptance of the public works construction by the proper public
authorities.” O.C.G.A. § 13-10-65 (emphasis added). Strickland argues that an email from a GDOT employee showed that the road improvement project had not
been accepted by the public authority in 2014. We disagree. In an October 2014
e-mail, a GDOT employee indicated that the project had “not received final
acceptance and approval.” (Emphasis added). However, this evidence only shows
6

Case: 17-10610

Date Filed: 01/09/2018

Page: 7 of 10

that GDOT had not sent written final acceptance at that point. GDOT’s written
final acceptance itself showed that the public authority “accepted” the project as of
April 2012. And a GDOT employee’s deposition testimony indicated that there
was a two-year gap between acceptance and written final acceptance because
GDOT had to complete paperwork and close out the project. Testing of the
materials used was also required. Thus, the undisputed evidence showed that
written final acceptance had not been issued based on GDOT’s internal policy and
procedure, and not because the actual construction work had not been accepted.
The case law is consistent with the language of the statute, which plainly
triggers the limitations period at acceptance, and not final acceptance. So, for
example, while Rome Concrete Pipe Co. only addresses “completion of the
contract,” its reasoning is instructive. 353 S.E.2d at 16. There, the plaintiff argued
that completion under the statute was completion of the contract as determined by
GDOT’s internal procedures. Id. The state high court rejected that argument:
The purpose of the statute in question is to limit the time during which
the surety can be held liable for the obligor contractor’s performance
of the work or payment of its subcontractors and suppliers. Under the
construction urged by Rome, . . . no matter when the general
contractor completed the work and when it was accepted by the public
authority, the contract would not be complete for purposes of the
statute of limitation until the public authority determined it was
complete with reference to its own internal policy and procedure.
This construction would make it impossible to sue on a public work
bond as long as the public authority contended the contract was not
complete under its policy and procedures even where the work had
been completed as far as the general contractor is concerned, and had
7

Case: 17-10610

Date Filed: 01/09/2018

Page: 8 of 10

been accepted by the public authority. Such a construction is neither
fair nor reasonable and is in conflict with the legislative intent
underlying the statute.
Id. at 16–17. As with “completion,” if “acceptance” turned on a public authority’s
internal policy and procedure, it would frustrate the purpose of the statute.
Moreover, in Masonry Specialists of Ga., Inc., the Court of Appeals of
Georgia found that the statute of limitations began to run when the project was
accepted, the project was complete save for punch-list items, and the building was
occupied and dedicated, without reference to the public authority’s internal
procedure. 616 S.E.2d at 106. Here, the evidence presented by Strickland only
demonstrated that GDOT had not completed its internal procedure and did not
show that GDOT did not accept the actual construction work. Because the statute
of limitations concerns acceptance of the actual construction work, and not
GDOT’s internal procedure, the August 2014 e-mail did not create a genuine
factual dispute. Rather, the evidence showed that GDOT inspected, accepted for
maintenance, and paid for the actual construction work between 2010 and 2012,
more than one year before Strickland filed suit.
Strickland also claims that the project was not “accepted” more than one
year before he filed suit because the Standard Specifications required maintenance
and repair until GDOT issued written final acceptance, and final acceptance could
not be given until GDOT certified the materials used. This argument parallels
8

Case: 17-10610

Date Filed: 01/09/2018

Page: 9 of 10

Strickland’s argument regarding “completion” of the project. However, Georgia
courts have determined that projects were “complete” and “accepted” within the
meaning of the statute where additional work, through a punch-list, could be
required.

Id. at 105–06.

Further, this argument concerns GDOT’s internal

procedure and not acceptance of the actual construction work.
Finally, we are unpersuaded by Strickland’s argument that the statute of
limitations has not run because the bond at issue remains in “full force and effect”
until all suppliers are paid by the contractor, and Strickland has not been paid. As
Arch points out, this interpretation of the statute of limitations would render the
statute meaningless because the limitations period would never begin where a
supplier or subcontractor had not been paid. In addition, in Augusta Iron & Steel
Works, Inc. v. U.S. Fid. & Guar. Co., 790 F.2d 852, 853 (11th Cir. 1986), a case
cited with approval by the Georgia Supreme Court in Rome Concrete Pipe Co.,
353 S.E.2d at 16, we rejected the argument that “completion of the contract”
within the meaning of the former statute governing bonds for public contractors
should be construed to include final payment for construction work. As we’ve
noted, the statute of limitations begins to run “at the completion of the actual
construction work and acceptance thereof by the public authority,” Rome Concrete
Pipe Co., 353 S.E.2d at 16, and not when the bond is no longer in effect.

9

Case: 17-10610

Date Filed: 01/09/2018

Page: 10 of 10

In short, the district court did not err in determining that the statute of
limitations had run on Strickland’s bond claims.
AFFIRMED.

10