Ramona Equip. Rental v. Carolina Casualty Ins. Co., No. 12-55156 (9th Cir. 2014)
Annotate this CaseCandelaria, CCIC, and Otay (collectively, defendants) appealed the district court's judgment in favor of Ramona, the supplier of rental equipment, in Ramona's action under the Miller Act, 40 U.S.C. 3131-3134. The court held that Ramona's notice of demand was timely as to rental equipment furnished more than ninety days before the notice. The court joined its sister circuits and held that if all the goods in a series of deliveries by a supplier on an open book account are used on the same government project, the ninety-day notice is timely as to all the deliveries if it is given within ninety days from the last delivery. Concluding that there was no risk of double liability to Candelaria, the court affirmed the district court's award in damages, holding that all amounts due for all the rental equipment furnished to Otay for construction of the project were properly in the ninety-day notice. The court affirmed the district court's ruling not to award damages for invoices submitted on or after June 10, 2008, where Ramona had commercially reasonable justifications for choosing not to mitigate its damages prior to that date. Defendant's claim that Ramona waived its right to collect service charges was waived. Accordingly, the court affirmed the judgment of the district court.
Court Description: Miller Act. The panel affirmed the district court’s judgment after bench trial in favor of the plaintiff in an action under the Miller Act. The plaintiff alleged that a subcontractor on a federal project failed to pay for equipment rented on an open book account. The panel held that the plaintiff’s notice of demand, served on the prime contractor within ninety days of the last day on which the plaintiff furnished the equipment, was timely as to equipment furnished more than ninety days before the notice. Agreeing with the First, Fourth, and Fifth Circuits, the panel held that if all the goods in a series of deliveries by a supplier on an open book account are used on the same government project, then the ninety-day notice is timely as to all of the deliveries if it is given within ninety days from the last delivery. The panel also affirmed the district court’s determination of when the plaintiff’s duty to mitigate damages arose, as well as the district court’s award of contractual prejudgment interest. Dissenting, Judge Erickson wrote that he would reverse the district court’s judgment because, in light of the Miller Act notice provision’s purpose of protecting the general contractor and its surety, the plaintiff’s ninety-day notice was RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 3 not timely as to equipment furnished more than ninety days before the notice. Judge Erickson wrote that he also would reverse as to mitigation of damages and prejudgment interest.
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