Fire Fighter Sales and Service Co. v. Travelers Casualty and Surety Company of America

Filing 22

Opinion and Order. Defendant's Motion to Dismiss or for Summary Judgment (Related doc # 14 ) is granted and Plaintiff's Complaint is dismissed. Judge Christopher A. Boyko on 9/30/2015. (H,CM)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

FIREFIGHTER SALES AND SERVICE, )
)
Plaintiff,
)
)
vs.
)
)
TRAVELERS CASUALTY AND
)
SURETY COMPANY OF AMERICA, )
Defendant.
)

CASE NO. 1:14CV2337
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER

CHRISTOPHER A. BOYKO, J.:
This matter comes before the Court upon the Motion (ECF DKT #14) of Defendant,
Travelers Casualty and Surety Company of America (“Travelers” or “Defendant”), to Dismiss
or for Summary Judgment. For the following reasons, the Motion is granted and the
Complaint of Plaintiff, Firefighter Sales and Service (“Plaintiff” or “All Lines”), for payment
under Travelers’ Bond is dismissed.
I. FACTUAL BACKGROUND
These facts are not disputed: Plaintiff instituted this action against Travelers to
recover against a payment bond issued in connection with a public project known as the
Orchard School of Science PK-8, Combination Electrical and Technology Project. Travelers

was the Surety for the Project’s general contractor, NuSurge Electrical, Inc. Nusurge
subcontracted with Total Systems Integration, Inc. (“TSI”) and TSI sub-subcontracted with
All Lines. All Lines was not in privity with NuSurge. All Lines agreed to furnish data
communication network equipment, data communications wireless access points and
integrated telephone systems for incorporation into the bonded Project in exchange for
payment from TSI in the amount of $81,911.57. At TSI’s direction, All Lines delivered its
materials to TSI’s warehouse on May 14, 2013. All Lines invoiced TSI for the materials on
May 16, 2013. All Lines’ materials were delivered to the Project site by TSI sometime
between September 2013 and December 2013.
All Lines served a Notice of Furnishing, pursuant to R.C. § 1311.261, upon the
principal contractor NuSurge on or about September 16, 2013. NuSurge paid TSI in full; but
TSI never paid All Lines.
All Lines made a claim against Travelers’ Bond. Travelers denied the claim for
payment under the Bond, asserting that All Lines did not provide NuSurge with the Notice of
Furnishing in a timely fashion under Ohio law. Travelers took the position that the relevant
date was when All Lines delivered its materials to TSI’s warehouse in May of 2013, and not
when TSI ultimately delivered the materials to the Project site.
On January 16, 2015, finding that the most efficient course for this litigation would be
to address the central legal issue: the timeliness of Plaintiff’s Notice of Claim against
Travelers’ Bond (#002-SB-105737177) for a public works project at Orchard School of
Science in the Cleveland Metropolitan School District, the Court ordered cross-briefing. The
parties submitted their briefs on a Motion to Dismiss or alternatively, for Summary Judgment.

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Although the question before it is purely one of law, the Court allowed the submission of
additional documents with the parties’ briefs. Therefore, the Court will address the dispute
under the Rule 56 standard.
II. LAW AND ANALYSIS
Summary Judgment Standard of Review
Summary judgment shall be granted only if “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” See Fed.R.Civ.P. 56(a). The burden is on the moving party to conclusively show no
genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986);
Lansing Dairy. Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir. 1994). The moving party must
either point to “particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations, admissions,
interrogatory answers, or other materials” or show “that the materials cited do not establish
the absence or presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.” See Fed.R.Civ.P. 56(c)(1)(A), (B). A court
considering a motion for summary judgment must view the facts and all inferences in the light
most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986). Once the movant presents evidence to meet its burden, the
nonmoving party may not rest on its pleadings, but must come forward with some significant
probative evidence to support its claim. Celotex, 477 U.S. at 324; Lansing Dairy, 39 F.3d at
1347.
This Court does not have the responsibility to search the record sua sponte for genuine

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issues of material fact. Betkerur v. Aultman Hospital Ass 'n., 78 F.3d 1079, 1087 (6th Cir.
1996); Guarino v. Brookfield Township Trustees, 980 F.2d 399, 404-06 (6th Cir. 1992). The
burden falls upon the nonmoving party to “designate specific facts or evidence in dispute,”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); and if the nonmoving party
fails to make the necessary showing on an element upon which it has the burden of proof, the
moving party is entitled to summary judgment. Celotex, 477 U.S. at 323. Whether summary
judgment is appropriate depends upon “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one party must
prevail as a matter of law.” Amway Distributors Benefits Ass 'n v. Northfield Ins. Co., 323
F.3d 386, 390 (6th Cir. 2003) (quoting Anderson, 477 U.S. at 251-52).
Ohio Public Bond Law
R.C. §§ 153.54, et seq. set forth the procedure by which a subcontractor or materials
supplier may make a claim on a public improvement bond. Specifically, § 153.56 recites in
pertinent part:
(C) To exercise rights under this section, a subcontractor or materials supplier
supplying labor or materials that cost more than thirty thousand dollars, who is
not indirect privity of contract with the principal contractor or design-build
firm for the public improvement, shall serve a notice of furnishing upon the
principal contractor or design-build firm in the form provided in section
1311.261 of the Revised Code.
(D) A subcontractor or materials supplier who serves a notice of furnishing
under division (C) of this section as required to exercise rights under this
section has the right of recovery only as to amounts owed for labor and work
performed and materials furnished during and after the twenty-one days
immediately preceding service of the notice of furnishing.

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Claim for Furnishing Materials
Pursuant to R.C. § 1311.251, a valid claim for furnishing materials for public
improvements arises when the materials are: “(A)(1) Furnished with the intent, as evidenced
by the contract of sale, the delivery order, delivery to the site by the claimant or at the
claimant’s direction, or by other evidence, that the materials be used in the course of the
public improvement with which the claim arises.” (Emphasis added).
Notice of Furnishing
Pursuant to R.C. § 1311.261:
(A)(1) Every subcontractor and material supplier who wishes to exercise the
subcontractor’s or material supplier’s rights under sections 1311.25 to 1311.32 of the
Revised Code regarding claims for labor or work performed or materials furnished in
furtherance of a public improvement shall serve a notice of furnishing, in accordance
with division (B) of this section, on the principal contractor ... within twenty-one days
after the date that the subcontractor or material supplier first performed labor or
work or furnished materials on the site of the public improvement ...
(A)(2) ... If a subcontractor or material supplier serves the notice, the subcontractor or
material supplier shall have the rights of sections 1311.25 to 1311.32 of the Revised
Code with regard to only amounts owed for labor or work performed and materials
furnished during and after the twenty-one days immediately preceding service of the
notice of furnishing.
(Emphasis added).
In the instant case, All Lines furnished materials to a site of a public improvement, the
Orchard School of Science PK-8, Combination Electrical and Technology Project. No one
disputes that it was a public improvement project. Travelers issued a bond to NuSurge for the
Project and for the protection of subcontractors, material suppliers or laborers who have
lawful claims.
All Lines delivered its materials for the Project to the TSI warehouse on May 14,

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2013, and invoiced TSI pursuant to its purchase order within days thereafter. All Lines
served NuSurge with its Notice of Furnishing on September 16, 2013, although All Lines
performed no labor nor furnished materials after May of 2013. TSI, and not All Lines,
delivered All Lines’ materials to the Project site between September and December of 2013.
Both All Lines and Travelers acknowledge that one purpose of the Notice of
Furnishing is to notify the general contractor, who is not in privity with the claimant, that
another entity is providing labor and/or materials to the bonded public work project. The
Notice is crucial to a general contractor who must answer to a public entity for work
performed, for materials furnished and their quality and for obligations paid or remaining
outstanding. Clearly, NuSurge was not aware of All Lines’ contributions to the Project nor
that All Lines was not compensated for the materials it provided, prior to receiving the Notice
of Furnishing.
To benefit under the Ohio Public Bond and Lien Laws and to exercise the right to
recovery under Travelers’ Bond, All Lines was required to issue its Notice of Furnishing
within twenty-one days of the date it delivered its materials to TSI’s warehouse. The Court
finds that All Lines cannot benefit from the later September date because All Lines did not
furnish the materials to the public improvement site; TSI did. R.C. § 1311.261(A)(1)
unambiguously mandates that a subcontractor or material supplier, like All Lines, shall serve
a notice of furnishing “within twenty-one days after the date that the subcontractor or material
supplier first performed labor or work or furnished materials on the site of the public
improvement.”
The Court agrees with Travelers that, because the September 2013 Notice of

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Furnishing was untimely, All Lines has no valid or lawful claim for the amount of $81,911.57
for materials furnished four months earlier. Travelers properly denied payment under the
Bond.
III. CONCLUSION
For these reasons, the Motion (ECF DKT #14) of Defendant, Travelers Casualty and
Surety Company of America (“Travelers” or “Defendant”), to Dismiss or for Summary
Judgment is granted and the Complaint of Plaintiff, Firefighter Sales and Service (“Plaintiff”
or “All Lines”), for payment under Travelers’ Bond is dismissed.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: September 30, 2015

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