MILLGARD CORP. v. WHITE OAK CORP.

Civil Action No. 3:00CV1685(CFD)

224 F. Supp.2d 425 (2002) | Cited 0 times | D. Connecticut | September 30, 2002

RULING ON PENDING MOTIONS

I. Introduction

This action arises out of a dispute over payment for subcontractingwork that Plaintiff Millgard Corporation ("Millgard") performed at aState of Connecticut Department of Transportation ("DOT") constructionproject in New Haven, Connecticut. Millgard alleges breach of contract andunjust enrichment against defendant White Oak Corporation ("White Oak"),and seeks to collect payment on a bond against defendant National UnionInsurance Company of Pittsburgh, PA ("National Union") pursuant to Conn.Gen. Stat. § 49-42, known as Connecticut's "little Miller Act."Currently pending are National Union's Motion for Summary Judgment [Doc.#23], National Union's Motion to Strike [Doc. #28], and Millgard's Motionto Enforce Settlement Agreement [Doc. #35].1

II. Background2

White Oak was the general contractor on a construction project of theDOT to replace a bridge over the Quinnipiac River. On June 6, 1994,National Union issued a payment bond for the project. National Unionacted as surety and White Oak was the principal.

On March 22, 1996, Millgard and White Oak entered into an agreementwhereby Millgard agreed to act as an excavation subcontractor for WhiteOak at the project. Millgard began its work on October 31, 1997, butclaims that it encountered quartz and granite boulders which constitutedconditions differing from those indicated in the subcontract and causedMillgard to incur unanticipated expenditures of time and money. Millgardcontends that it informed White Oak of the problem and requested that thesubcontract price be increased. White Oak then submitted a claim with theDOT for an increase in the contract price.

Millgard asserts that it met with the DOT and White Oak in September,1998 and stated that it was entitled to suspend work due to the siteconditions it had encountered. For the next several months, White Oak andthe DOT engaged in mediation of White Oak's claim with the DOT, andMillgard participated in some of those discussions. Eventually, White Oakterminated Millgard and represents that it did so, in part, becauseMillgard refused to return to work. The parties also dispute when thistermination occurred. Although the parties dispute when Millgard lastperformed work on the project, Millgard admits it was no later thanSeptember 7, 1999.

National Union received written notice of a claim by Millgard on thepayment bond on May 10, 2000. National Union advised Millgard that itdenied its claim on the bond because it had not been timely presented inaccordance with the requirements of Conn. Gen. Stat. § 49-42.

III. Discussion

A. Payment Bond Statute

Conn. Gen. Stat. § 49-41 requires that general contractors onpublic worksprojects obtain payment bonds to ensure payment tosubcontractors and materials suppliers. See, e.g., Blakeslee AnpaiaChapman, Inc. v. E. I. Constructors, Inc., 687 A.2d 506 (Conn. 1997). Tobring an action on a payment bond, a claimant must comply with the"little Miller Act," Conn. Gen. Stat. § 49-42, which is "a remedialstatute enacted to provide security for workers and materials suppliersunable to avail themselves of the protection of a mechanic's lien." OkeeIndus., Inc. v. National Grange Mut. Ins. Co., 623 A.2d 483, 486 (Conn.1993). Section 49-42 provides for a civil remedy for payment bond claimsand sets forth requirements for notice to the surety and generalcontractor and for filing of suit.

At the time the bond in this case was issued, the statute provided, inrelevant part,

(a) Every person who has furnished labor or material in the prosecution of the work provided for in such contract in respect of which a payment bond is furnished under the provisions of section 49-41 and who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him for which the claim is made, may enforce his right to payment under the bond by serving a notice of claim within one hundred eighty days after the date on which he performed the last of the labor or furnished the last of the material for which the claim is made, on the surety that issued the bond and a copy of the notice on the contractor named as principal in the bond.

(b) Every suit instituted under this section shall be brought in the name of the person suing, in the superior court for the judicial district where the contract was to be performed, irrespective of the amount in controversy in the suit, but no such suit may be commenced after the expiration of one year after the day on which the last of the labor was performed or material was supplied by the claimant.

Conn. Gen. Stat. § 49-42 (1994).3 This section "operate[s] ingeneral conformity" with the parallel federal statute known as the MillerAct.4 Federal precedent relating to the Miller Act is relied on byConnecticut state courts in interpreting the 49-42. American Masons'Supply Co. v. F.W. Brown Co., 384 A.2d 378, 381 (Conn. 1978). Inconstruing 49-42, Connecticut courts also rely "on the rule of strictconstruction when the issue was whether the claimant's notice compliedwith the specific time requirements of the statute . . . [but rely] onthe rule of liberal construction when the issue [is] the eligibility forstatutory coverage of a particular class of subcontractors." OkeeIndus., 623 A.2d at 487.

In its motion for summary judgment, National Union argues that there isno genuine issue of material fact that Millgard did not comply with thetime deadlines set forth in § 49-42 for providing notice and filingsuit against a surety.5 Inresponse, Millgard maintains that NationalUnion's motion for summary judgment should be denied because (1) althoughMillgard failed to provide written notice of its claim to National Unionwithin the statutory time limit of 180 days, National Union should beequitably estopped from asserting lack of notice as a defense; and (2)the complaint was filed in a timely manner.

B. Standard for Summary Judgment

In a motion for summary judgment, the burden is on the moving party toestablish that there are no genuine issues of material fact in disputeand that it is entitled to judgment as a matter of law. See Fed.R.Civ.P.56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A courtmust grant summary judgment "`if the pleadings, depositions, answers tointerrogatories, and admissions on file, together with affidavits, ifany, show that there is no genuine issue as to any material fact.'" Minerv. City of Glen Falls, 999 F.2d 655, 661 (2d Cir. 1993) (citationomitted). A dispute regarding a material fact is genuine "`if theevidence is such that a reasonable jury could return a verdict for thenonmoving party.'" Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520,523 (2d Cir. 1992) (quoting Anderson, 477 U.S. at 248). After discovery,if the nonmoving party "has failed to make a sufficient showing on anessential element of [its] case with respect to which [it] has the burdenof proof," then summary judgment is appropriate. Celotex Corp. v.Catrett, 477 U.S. 317, 323 (1986).

The Court resolves "all ambiguities and draw[s] all inferences in favorof the nonmoving party in order to determine how a reasonable jury woulddecide." Aldrich, 963 F.2d at 523. Thus, "[o]nly when reasonable mindscould not differ as to the import of the evidence is summary judgmentproper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991); see alsoSuburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788 (2d Cir. 1992).Additionally "where . . . the non-movant bears the burden of proof attrial, the movant can satisfy its burden of production by pointing out anabsence of evidence to support an essential element of the non-movant'scase." Ginsberg v. Healey Car & Truck Leasing, Inc., 189 F.3d 268,270 (2d Cir. 1999) (citing Celotex, 477 U.S. at 323-24 and Tops Mkts.,Inc. v. Quality Mkts., Inc., 142 F.3d 90, 95 (2d Cir. 1998)).

C. Motion to Strike

As an initial matter, National Union moves to strike two statements inthe affidavit of V. Dennis Millgard, the president of Millgard, which wassubmitted in opposition to the motion for summary judgment. Thestatements concern National Union's role in assisting White Oak inseeking additional funds from the DOTand, more important to the instantaction, National Union's relationship with White Oak at the time WhiteOak was communicating with Millgard about the project. The two statementsby Mr. Millgard are based "[u]pon information and belief."6 (MillgardAff. ¶¶ 32, 34.) National Union argues that they fail to meet thepersonal knowledge requirement of an affidavit when considered inresolving a motion for summary judgment. See Sellers v. M.C. FloorCrafters, Inc., 842 F.2d 639, 643 (2d Cir. 1988) (concluding that anaffidavit based on "information and belief" was insufficient underRule 56 to support a motion for summary judgment). Millgard does not appearto dispute National Union's argument, but argues that if the Court strikesthese statements, it also should strike certain hearsay statementscontained in the affidavit of George Rettig, Complex Claims Director ofAI Management and Professional Liability Claim Adjusters, which wassubmitted by White Oak. Millgard does not indicate specifically to whichsuch statements it refers.

The statements of Mr. Millgard will not be considered as they do notindicate that he possessed personal knowledge regarding the matters setforth. Fed.R.Civ.P. 56(e) ("Supporting and opposing affidavits shall bemade on personal knowledge"). See also Randell v. United States,64 F.3d 101, 109 (2d Cir. 1995) (finding "inadequate" statements that"did not purport to be made on personal knowledge . . ."); Fed.R.Evid.602.7 To the extent that Millgard requests statements in Mr. Rettig'saffidavit be stricken, the request is denied, as Millgard has failed toinclude the request in a motion filed with this Court and has failed toidentify the statements at issue.8

D. Notice under § 49-42 and equitable estoppel

National Union received written notice of Millgard's claim on the bondon May 10, 2000. As explained above, Conn. Gen. Stat. § 49-42(a)requires a claimant to notify the surety in writing of a claim on a bondwithin 180 days of the date it last performed work. Millgard also doesnot dispute that it filed this notice more than 180 days after September7, 1999, the date it claims it last performed work. However, Millgardargues that National Union should be equitably estopped from assertinglack of notice as a defense because National Union had actual notice ofMillgard's claim and because White Oak, acting in concert with NationalUnion, misled Millgard.

In particular, Millgard maintains that White Oak continually assured itthat the disputes over the additional contract payments would be resolvedand Millgard should return to work and expect to be paid. Millgardcontends that based on these representations it remained on "stand by,"prepared to return to work, and that if it had resumed work, NationalUnion would not have been able to assert the statute of limitationsdefense that it raises here because the time period for providing noticewould have been extended.9

As an initial matter to consider, the Second Circuit has ruled that asubcontractor cannot assert an estoppel defense to the one-yearrequirement for filing a complaint under Conn. Gen. Stat. § 49-42(b)because that requirement is jurisdictional. Fisher Skylights, Inc. v. CFCConstr. Ltd. P'Ship, 79 F.3d 9, 12 (2d Cir. 1996). Although this holdinghas not been specifically extended to the notice requirement of §49-42(a), courts have concluded that satisfaction of the statutory noticerequirement is a precondition to recovery on a bond. See, e.g., BarreiraLandscaping & Masonry v. Frontier Ins. Co., 779 A.2d 244, 247-48(Conn.Super.Ct. 2000). Further, courts construe the time requirements of§ 49-42 strictly. Okee Indus., 623 A.2d at 487.10

The court need not decide whether Connecticut law would apply estoppelto the notice requirement of § 49-42, however, because even assumingthat estoppel were available, Millgard has not presented evidence toraise a genuine issue of material fact as to its application here. UnderConnecticut law,

[t]here are two essential elements to an estoppel: the party must do or say something which is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the other party, influenced thereby, must actually change his position or do something to his injury which he otherwise would not have done. Estoppel rests on the misleading conduct of one party to the prejudice of another. In the absence of prejudice, estoppel does not exist.

W. v. W., 779 A.2d 716, 720 (Conn. 2001). Similarly, under the MillerAct, a "representation, reliance, change of position and detriment" isrequired to find estoppel. Humble Oil & Refining Co. v. Fidelity& Casualty Co. of New York, 402 F.2d 893, 898 (4th Cir. 1968)(hereinafter "Humble Oil"). Millgard has not presented any evidence thatNational Union made any written or oral communications to it or that evenif communications by White Oak can be attributed to National Union, thatthey affected the 180 day period which began September 7, 1999.

Although some decisions applying the Miller Act have recognized thatestoppel may be available, they are unavailing to Millgard. First, thosecases generally involve claims by subcontractors that they refrained fromfiling claims because of certain representations made by sureties. See,e.g., B & B Welding, Inc. v. Reliance Ins. Co. of New York,743 F. Supp. 129, 132 (E.D.N.Y. 1990); J. Bobby Currin &Sons v. J & W Builders, Inc.,17 F. Supp.2d 462, 466 (M.D.N.C. 1996);Bagnal Builders Supply Co. v. U.S. Fidelity & Guaranty Co.,411 F. Supp. 1333, 1337-38 (D.S.C. 1976). Here, Millgard claimsthat White Oak (the contractor rather than the surety) misled it and has notpresented any evidence of direct involvement by National Union.

At least one case, however, involved representations by a contractorwhich were attributed to the surety. In Humble Oil, the subcontractorclaimed that a "copartner" of the contractor made certain statements onwhich it detrimentally relied in failing to meet the deadline for filingsuit. Humble Oil, 402 F.2d at 899. There, the court found sufficientevidence to conclude that the copartner was the surety's agent, in partbecause the copartner was employed by the surety. Id.

The court further concluded that even if the copartner was not thesurety's agent, the surety "should reasonably have anticipated that itspromise" to the copartner to pay all of the contractor's outstandingbills, including the debt to the subcontractor "would be repeated" to thesubcontractor. Id. Here, Millgard has not presented evidence sufficientto raise a genuine issue of material fact that White Oak was NationalUnion's agent or that White Oak's statements could be attributed toNational Union. Although Mr. Millgard, President of the Plaintiff, statedin his affidavit that White Oak assured Millgard it would be paid, noevidence has been presented that National Union made or endorsed suchstatements, that White Oak represented it was acting on National Union'sbehalf, or that other evidence of White Oak's agency status with NationalUnion exists.11 Millgard Aff. ¶ 33.

Further, even if an agency relationship between White Oak and NationalUnion is assumed, Millgard does not claim that White Oak'srepresentations were specifically directed at causing Millgard not tofile notice on a timely basis. See J. Bobby Curin, 17 F. Supp.2d at 466(remarking that the subcontractor "did not expressly state that it wouldforbear from bringing suit, nor is it clear whether [the subcontractor]had even contemplated such a suit [] when the statute of limitations ranout). Rather, it summarizes White Oak's assurances and as follows: "[h]adMillgard returned to work on the project, National Union could not haveasserted the technical defenses that it is now relying on because thestatute would be tolled while the work continued."

In other words, Millgard appears to claim that the misleadingstatements by White Oak led it to believe that it would be returning towork once the DOT agreed to the additional payments, thus perhapsextending the starting date for the 180 day notice period, the last dayof work on the project by Millgard. However, Millgard does not claim thatWhite Oak made these alleged misrepresentations after September 7, 1999,the date it concedes that it last performed work. Therefore, there is noindication that Millgard changed its position in amanner which caused itprejudice, see W. v. W., 779 A.2d at 720, and its estoppel claim must failon that basis as well.12

E. Complaint and Date of Completion

In its motion for summary judgment, National Union also argues thatMillgard failed to file its complaint within the one year time period setforth in § 49-42(b). In light of the Court's conclusion regard the180 day time requirement for notice, it need not address this argument.

F. Motion to Enforce Settlement Agreement

Finally, Millgard has moved to enforce an oral settlement agreementpurportedly reached between National Union and Millgard. Millgard claimsthat the parties reached a settlement of this case, and both partiesacknowledge that they jointly notified the Court that the case had beensettled. Upon this report, the Court issued a "Notice to Counsel" [Doc.#33] indicating that under Local Rule 16(b), a case that is reportedsettled will be dismissed if closing papers are not filed with thirtydays. However, based on the parties' representations, the Court concludesthat White Oak found the final terms of the proposed settlement to beunacceptable and decided that National Union did not have the authorityto negotiate a settlement on its behalf.13 As a result, NationalUnion refused to participate further in settlement discussions. NationalUnion argues that the Court should not enforce the proposed settlementbecause no agreement actually was reached.

It is . . . well established that parties are bound to the terms of a contract even though it is not signed and is an oral agreement. See Main Line Theaters, Inc. v. Paramount Film Distributing Corp., 298 F.2d 801, 802-04 (3d Cir.), cert. denied, 370 U.S. 939 (1962). See also Schwartzchild v. Martin, 191 Conn. 316, 320-321 (1983) (parties may be bound even if contract not signed), cited in Cyr. v. Schwitzer, et al., 1998 WL 420778 at *1 (Conn.Super. 1998) Accord Green v. John H. Lewis & Co., 436 F.2d 389, 390 (3d Cir. 1971) (same), citing Good v. Pennsylvania R.R. Co., 384 F.2d 384 [sic] (3d Cir. 1967) and other cases collected. The only essential prerequisite for a valid settlement agreement is that the [parties] . . . mutually assent to the terms and conditions of the settlement. "It is well recognized that an agreement to settle a lawsuit, voluntarily entered into, is binding on the parties." Pugh v. Super Fresh Food Markets, Inc. 640 F. Supp. 1306, 1308-08 (E.D.Pa. 1986), cited in Zauner v. Brewer, 1992 WL 205 179 at *2. (Conn.Super. 1992).

Finally, a settlement is still binding even if a party has a change of heart between the time of the agreement to the terms of the settlement and the time those terms are reduced to writing. Morris v. Scardelletti, et al., 1995 WL 708550 at *1 (E.D.Pa. 1995). However, once a settlement is reached, the agreement may not be repudiated by either party. Rather, such an agreement will be summarily enforced by the court.

Brown v. Nationscredit Commercial, No. 3:99-CV-592(EBB), 2000 WL 888507,at *2 (D.Conn. June 23, 2000). However, a court only has the authority tosummarily enforce a settlement agreement "when the terms of the agreementare clear and unambiguous." Audubon Parking Assocs. Ltd. P'ship v.Barclay & Stubbs, Inc., 626 A.2d 729, 733 (Conn. 1993). Further, "ifthe parties do not intend to enter a binding agreement without awriting, they will not be legally bound until that condition is met."Consarc Corp. v. Marine Midland Bank, 996 F.2d 568, 574-76 (2d Cir. 1993)(construing New York law).14

In this case, Millgard has not shown that all of the parties mutuallyassented to all of the essential terms and conditions of the settlementand did not intend to be bound by the settlement agreement without awritten agreement. For example, while the parties may have reached anagreement on a number of terms in a fairly complex settlement agreement,they apparently did not resolve the significant issue of the $250,000credit should National Union's security interest be subordinated. Thus,at least one of the important terms of the agreement was neither clearand unambiguous, nor agreed to. In addition, it is common to completesuch settlement agreements in writing, particularly under thecircumstances of this case, where the parties have a complicatedrelationship and where substantial financial interests are involved.Finally, Millgard does not point to any evidence indicating that thewritten agreement was contemplated only as a memorialization of the oralsettlement. In fact, although the parties notified the Court that thecase had settled, the Court's notice following oral notificationexpressly contemplates additional steps, including the filing ofadditional documents. It states that "a judgment will be entered on11/21/01 unless closing papers are filed on or before that date, orunless counsel reports prior to that date that the case is not in factsettled." (Doc. #33.)

Accordingly, Millgard's motion to enforce the settlement agreement isdenied.

V. Conclusion

For the foregoing reasons, National Union's motion for summary judgment[Doc. #23] is GRANTED; National Union's motion to strike [Doc. #28] isGRANTED; and Millgard's motion to enforce the settlement agreement isDENIED [Doc. #35]. National Union is dismissed as a defendant and CountThree of the complaint is DISMISSED.15

1. The parties do not dispute that this Court has jurisdictionpursuant to 28 U.S.C. § 1332, as there is complete diversity ofcitizenship between the parties and the amount in controversy exceeds$75,000. Count One of the complaint alleges breach of contract againstWhite Oak; Count Two alleges unjust enrichment against White Oak; andCount Three alleges a cause of action on the payment bond againstNational Union.

2. The recited facts are taken from the parties' Local Rule 9(c)statements and the materials appended thereto, and are undisputed unlessotherwise noted.

3. Conn. Gen. Stat. § 49-42 was amended, effective October 1,1994. The bond was issued on June 6, 1994. There is no dispute that theversion of the statute excerpted above, which was in effect at the timethe bond was issued, controls.

4. The Miller Act is set forth at 40 U.S.C. § 270a et seq.

5. Millgard argues that the Court should consider National Union'smotion as a motion to dismiss, because it concerns subject matterjurisdiction, rather than for summary judgment. Pl.'s Obj. to Def.'sMot. for Summ. J. at 7. However, even if the issues here relate to theCourt's subject matter jurisdiction, as Millgard contends, summaryjudgment is an appropriate method for considering subject matterjurisdiction. See Wright & Miller, Federal Practice & Procedure:Civil 2d § 2713 at 241 ("the label attached to the motion should notprevent the court from deciding a summary-judgment motion challenging thecourt's subject-matter jurisdiction as a suggestion that the courtdismiss the action on that ground."). Also, Millgard has presentedevidence and other materials responsive to the motion for summaryjudgment. Although Millgard's objection to the Motion to Strike (which isconsidered infra) refers to Fed.R.Civ.P. 56(f), which permits the courtto grant a continuance to respond to a motion for summary judgment, nosuch request was made in writing or at oral argument.

6. The two statements are as follows:

32. Upon information and belief, the prosecution of this claim [against the DOT] is being funded by and directed by National Union, which has a security interest in the proceeds of the claim.

34. Upon information and belief, National Union was involved with the project and working with White Oak at the time that White Oak was making these representations [concerning assurances of payment] to Millgard.

Millgard Aff. ¶¶ 32, 34.

7. The Federal Rules of Evidence are applicable when deciding a motionfor summary judgment. Sfasciotti v. Copy-Plus, Inc., No. 85-C6318, 1985WL 5051, at *1 (N.D.Ill. Dec. 23, 1985) ("The Rules of evidence do notapply to the determination of some preliminary questions of fact(Rule 1101(d)(1)), but they do apply to affidavits submitted to the court onmotions to dismiss and for summary judgment.").

8. Millgard also states that it could not obtain affidavits from theemployees of the defendants. However, depositions could have beenutilized to obtain such information. As mentioned in footnote 5, nocontinuance was requested.

9. Millgard also appears to argue that apart from its estoppelargument, National Union received "actual notice" of the claim on thebond. See Pl.'s Obj. to Def.'s Mot. for Summ. J. at 17-18. However,Conn. Gen. Stat. § 49-42(a) requires that written notice be sent tothe surety within the 180 day notice period and Millgard has notpresented any evidence of such written notice prior to May 10, 2000. Seealso footnote 12, infra. Although the Connecticut courts have applied aliberal rule of construction as to the contents of written notice under49-42(a), they still require such notice to be in writing. See OkeeIndus., 623 A.2d at 485-89. Because Millgard has not presented anyevidence of written notice to National Union before May 10, 2000, andappears to rely only on oral and written communications to White Oakbefore that date, that argument fails.

10. The Court notes that "[n]umerous decisions of federal courts ofappeals have . . . held a timely written notice to be sufficient despitetechnical deficiencies in its contents if notice in fact was actually givenand received." Okee Indus., 623 A.2d at 375-76. As stated above in text andin footnotes 9 and 12, no written notice was provided to National Unionbefore May 10, 2000.

11. Even if Mr. Millgard's statements in his affidavit that were thesubject of the Court's decision on the Motion to Strike, supra, areconsidered, they do not affect this result.

12. Millgard has also referred to a copy of a purported notice letterto National Union dated April 7, 2000. See Rettig Aff. Ex. 13. NationalUnion contends it did not receive that letter and it does not comply with§ 42-42(a). In any event, it is still beyond the 180 day noticeperiod.

13. At oral argument, the Court invited the parties to notify it if anevidentiary hearing was requested on this motion, but the Court did notreceive such a request.

14. In Consarc, the Second Circuit enumerated various factors for acourt to consider when determining whether a party intended not to bebound until an agreement was reduced to writing. They are as follows: (1)number of terms agreed upon compared to total number to be included, (2)relationship of the parties, (3) degree of formality attending similarcontracts, (4) acts of partial performance by one party accepted by theother, (5) usage and custom of the industry, (6) subsequent conduct andinterpretation by the parties themselves, (7) whether writing iscontemplated merely as a "memorial," (8) whether contract needs a formalwriting for its full expression, (9) whether any terms remain to benegotiated, (10) whether contract has few or many details, (11) whetherthe amount involved is large or small, (12) whether a standard form iswidely used in similar transactions or whether this is an unusual type ofcontract, (13) the speed with which the transaction must be concluded,(14) the simplicity or complexity of the transaction, (15) theavailability of information necessary to decide whether to enter into acontract, and (16) the time when the contract was entered into. Consarc,996 F.2d at 575-76.

15. Millgard may move to reopen and to amend its complaint withinthirty days, as requested in its Motion to Enforce Settlement Agreement,to add an additional claim against National Union. National Union mayobject to such a request.

RULING ON PENDING MOTIONS

I. Introduction

This action arises out of a dispute over payment for subcontractingwork that Plaintiff Millgard Corporation ("Millgard") performed at aState of Connecticut Department of Transportation ("DOT") constructionproject in New Haven, Connecticut. Millgard alleges breach of contract andunjust enrichment against defendant White Oak Corporation ("White Oak"),and seeks to collect payment on a bond against defendant National UnionInsurance Company of Pittsburgh, PA ("National Union") pursuant to Conn.Gen. Stat. § 49-42, known as Connecticut's "little Miller Act."Currently pending are National Union's Motion for Summary Judgment [Doc.#23], National Union's Motion to Strike [Doc. #28], and Millgard's Motionto Enforce Settlement Agreement [Doc. #35].1

II. Background2

White Oak was the general contractor on a construction project of theDOT to replace a bridge over the Quinnipiac River. On June 6, 1994,National Union issued a payment bond for the project. National Unionacted as surety and White Oak was the principal.

On March 22, 1996, Millgard and White Oak entered into an agreementwhereby Millgard agreed to act as an excavation subcontractor for WhiteOak at the project. Millgard began its work on October 31, 1997, butclaims that it encountered quartz and granite boulders which constitutedconditions differing from those indicated in the subcontract and causedMillgard to incur unanticipated expenditures of time and money. Millgardcontends that it informed White Oak of the problem and requested that thesubcontract price be increased. White Oak then submitted a claim with theDOT for an increase in the contract price.

Millgard asserts that it met with the DOT and White Oak in September,1998 and stated that it was entitled to suspend work due to the siteconditions it had encountered. For the next several months, White Oak andthe DOT engaged in mediation of White Oak's claim with the DOT, andMillgard participated in some of those discussions. Eventually, White Oakterminated Millgard and represents that it did so, in part, becauseMillgard refused to return to work. The parties also dispute when thistermination occurred. Although the parties dispute when Millgard lastperformed work on the project, Millgard admits it was no later thanSeptember 7, 1999.

National Union received written notice of a claim by Millgard on thepayment bond on May 10, 2000. National Union advised Millgard that itdenied its claim on the bond because it had not been timely presented inaccordance with the requirements of Conn. Gen. Stat. § 49-42.

III. Discussion

A. Payment Bond Statute

Conn. Gen. Stat. § 49-41 requires that general contractors onpublic worksprojects obtain payment bonds to ensure payment tosubcontractors and materials suppliers. See, e.g., Blakeslee AnpaiaChapman, Inc. v. E. I. Constructors, Inc., 687 A.2d 506 (Conn. 1997). Tobring an action on a payment bond, a claimant must comply with the"little Miller Act," Conn. Gen. Stat. § 49-42, which is "a remedialstatute enacted to provide security for workers and materials suppliersunable to avail themselves of the protection of a mechanic's lien." OkeeIndus., Inc. v. National Grange Mut. Ins. Co., 623 A.2d 483, 486 (Conn.1993). Section 49-42 provides for a civil remedy for payment bond claimsand sets forth requirements for notice to the surety and generalcontractor and for filing of suit.

At the time the bond in this case was issued, the statute provided, inrelevant part,

(a) Every person who has furnished labor or material in the prosecution of the work provided for in such contract in respect of which a payment bond is furnished under the provisions of section 49-41 and who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him for which the claim is made, may enforce his right to payment under the bond by serving a notice of claim within one hundred eighty days after the date on which he performed the last of the labor or furnished the last of the material for which the claim is made, on the surety that issued the bond and a copy of the notice on the contractor named as principal in the bond.

(b) Every suit instituted under this section shall be brought in the name of the person suing, in the superior court for the judicial district where the contract was to be performed, irrespective of the amount in controversy in the suit, but no such suit may be commenced after the expiration of one year after the day on which the last of the labor was performed or material was supplied by the claimant.

Conn. Gen. Stat. § 49-42 (1994).3 This section "operate[s] ingeneral conformity" with the parallel federal statute known as the MillerAct.4 Federal precedent relating to the Miller Act is relied on byConnecticut state courts in interpreting the 49-42. American Masons'Supply Co. v. F.W. Brown Co., 384 A.2d 378, 381 (Conn. 1978). Inconstruing 49-42, Connecticut courts also rely "on the rule of strictconstruction when the issue was whether the claimant's notice compliedwith the specific time requirements of the statute . . . [but rely] onthe rule of liberal construction when the issue [is] the eligibility forstatutory coverage of a particular class of subcontractors." OkeeIndus., 623 A.2d at 487.

In its motion for summary judgment, National Union argues that there isno genuine issue of material fact that Millgard did not comply with thetime deadlines set forth in § 49-42 for providing notice and filingsuit against a surety.5 Inresponse, Millgard maintains that NationalUnion's motion for summary judgment should be denied because (1) althoughMillgard failed to provide written notice of its claim to National Unionwithin the statutory time limit of 180 days, National Union should beequitably estopped from asserting lack of notice as a defense; and (2)the complaint was filed in a timely manner.

B. Standard for Summary Judgment

In a motion for summary judgment, the burden is on the moving party toestablish that there are no genuine issues of material fact in disputeand that it is entitled to judgment as a matter of law. See Fed.R.Civ.P.56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A courtmust grant summary judgment "`if the pleadings, depositions, answers tointerrogatories, and admissions on file, together with affidavits, ifany, show that there is no genuine issue as to any material fact.'" Minerv. City of Glen Falls, 999 F.2d 655, 661 (2d Cir. 1993) (citationomitted). A dispute regarding a material fact is genuine "`if theevidence is such that a reasonable jury could return a verdict for thenonmoving party.'" Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d 520,523 (2d Cir. 1992) (quoting Anderson, 477 U.S. at 248). After discovery,if the nonmoving party "has failed to make a sufficient showing on anessential element of [its] case with respect to which [it] has the burdenof proof," then summary judgment is appropriate. Celotex Corp. v.Catrett, 477 U.S. 317, 323 (1986).

The Court resolves "all ambiguities and draw[s] all inferences in favorof the nonmoving party in order to determine how a reasonable jury woulddecide." Aldrich, 963 F.2d at 523. Thus, "[o]nly when reasonable mindscould not differ as to the import of the evidence is summary judgmentproper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991); see alsoSuburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788 (2d Cir. 1992).Additionally "where . . . the non-movant bears the burden of proof attrial, the movant can satisfy its burden of production by pointing out anabsence of evidence to support an essential element of the non-movant'scase." Ginsberg v. Healey Car & Truck Leasing, Inc., 189 F.3d 268,270 (2d Cir. 1999) (citing Celotex, 477 U.S. at 323-24 and Tops Mkts.,Inc. v. Quality Mkts., Inc., 142 F.3d 90, 95 (2d Cir. 1998)).

C. Motion to Strike

As an initial matter, National Union moves to strike two statements inthe affidavit of V. Dennis Millgard, the president of Millgard, which wassubmitted in opposition to the motion for summary judgment. Thestatements concern National Union's role in assisting White Oak inseeking additional funds from the DOTand, more important to the instantaction, National Union's relationship with White Oak at the time WhiteOak was communicating with Millgard about the project. The two statementsby Mr. Millgard are based "[u]pon information and belief."6 (MillgardAff. ¶¶ 32, 34.) National Union argues that they fail to meet thepersonal knowledge requirement of an affidavit when considered inresolving a motion for summary judgment. See Sellers v. M.C. FloorCrafters, Inc., 842 F.2d 639, 643 (2d Cir. 1988) (concluding that anaffidavit based on "information and belief" was insufficient underRule 56 to support a motion for summary judgment). Millgard does not appearto dispute National Union's argument, but argues that if the Court strikesthese statements, it also should strike certain hearsay statementscontained in the affidavit of George Rettig, Complex Claims Director ofAI Management and Professional Liability Claim Adjusters, which wassubmitted by White Oak. Millgard does not indicate specifically to whichsuch statements it refers.

The statements of Mr. Millgard will not be considered as they do notindicate that he possessed personal knowledge regarding the matters setforth. Fed.R.Civ.P. 56(e) ("Supporting and opposing affidavits shall bemade on personal knowledge"). See also Randell v. United States,64 F.3d 101, 109 (2d Cir. 1995) (finding "inadequate" statements that"did not purport to be made on personal knowledge . . ."); Fed.R.Evid.602.7 To the extent that Millgard requests statements in Mr. Rettig'saffidavit be stricken, the request is denied, as Millgard has failed toinclude the request in a motion filed with this Court and has failed toidentify the statements at issue.8

D. Notice under § 49-42 and equitable estoppel

National Union received written notice of Millgard's claim on the bondon May 10, 2000. As explained above, Conn. Gen. Stat. § 49-42(a)requires a claimant to notify the surety in writing of a claim on a bondwithin 180 days of the date it last performed work. Millgard also doesnot dispute that it filed this notice more than 180 days after September7, 1999, the date it claims it last performed work. However, Millgardargues that National Union should be equitably estopped from assertinglack of notice as a defense because National Union had actual notice ofMillgard's claim and because White Oak, acting in concert with NationalUnion, misled Millgard.

In particular, Millgard maintains that White Oak continually assured itthat the disputes over the additional contract payments would be resolvedand Millgard should return to work and expect to be paid. Millgardcontends that based on these representations it remained on "stand by,"prepared to return to work, and that if it had resumed work, NationalUnion would not have been able to assert the statute of limitationsdefense that it raises here because the time period for providing noticewould have been extended.9

As an initial matter to consider, the Second Circuit has ruled that asubcontractor cannot assert an estoppel defense to the one-yearrequirement for filing a complaint under Conn. Gen. Stat. § 49-42(b)because that requirement is jurisdictional. Fisher Skylights, Inc. v. CFCConstr. Ltd. P'Ship, 79 F.3d 9, 12 (2d Cir. 1996). Although this holdinghas not been specifically extended to the notice requirement of §49-42(a), courts have concluded that satisfaction of the statutory noticerequirement is a precondition to recovery on a bond. See, e.g., BarreiraLandscaping & Masonry v. Frontier Ins. Co., 779 A.2d 244, 247-48(Conn.Super.Ct. 2000). Further, courts construe the time requirements of§ 49-42 strictly. Okee Indus., 623 A.2d at 487.10

The court need not decide whether Connecticut law would apply estoppelto the notice requirement of § 49-42, however, because even assumingthat estoppel were available, Millgard has not presented evidence toraise a genuine issue of material fact as to its application here. UnderConnecticut law,

[t]here are two essential elements to an estoppel: the party must do or say something which is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the other party, influenced thereby, must actually change his position or do something to his injury which he otherwise would not have done. Estoppel rests on the misleading conduct of one party to the prejudice of another. In the absence of prejudice, estoppel does not exist.

W. v. W., 779 A.2d 716, 720 (Conn. 2001). Similarly, under the MillerAct, a "representation, reliance, change of position and detriment" isrequired to find estoppel. Humble Oil & Refining Co. v. Fidelity& Casualty Co. of New York, 402 F.2d 893, 898 (4th Cir. 1968)(hereinafter "Humble Oil"). Millgard has not presented any evidence thatNational Union made any written or oral communications to it or that evenif communications by White Oak can be attributed to National Union, thatthey affected the 180 day period which began September 7, 1999.

Although some decisions applying the Miller Act have recognized thatestoppel may be available, they are unavailing to Millgard. First, thosecases generally involve claims by subcontractors that they refrained fromfiling claims because of certain representations made by sureties. See,e.g., B & B Welding, Inc. v. Reliance Ins. Co. of New York,743 F. Supp. 129, 132 (E.D.N.Y. 1990); J. Bobby Currin &Sons v. J & W Builders, Inc.,17 F. Supp.2d 462, 466 (M.D.N.C. 1996);Bagnal Builders Supply Co. v. U.S. Fidelity & Guaranty Co.,411 F. Supp. 1333, 1337-38 (D.S.C. 1976). Here, Millgard claimsthat White Oak (the contractor rather than the surety) misled it and has notpresented any evidence of direct involvement by National Union.

At least one case, however, involved representations by a contractorwhich were attributed to the surety. In Humble Oil, the subcontractorclaimed that a "copartner" of the contractor made certain statements onwhich it detrimentally relied in failing to meet the deadline for filingsuit. Humble Oil, 402 F.2d at 899. There, the court found sufficientevidence to conclude that the copartner was the surety's agent, in partbecause the copartner was employed by the surety. Id.

The court further concluded that even if the copartner was not thesurety's agent, the surety "should reasonably have anticipated that itspromise" to the copartner to pay all of the contractor's outstandingbills, including the debt to the subcontractor "would be repeated" to thesubcontractor. Id. Here, Millgard has not presented evidence sufficientto raise a genuine issue of material fact that White Oak was NationalUnion's agent or that White Oak's statements could be attributed toNational Union. Although Mr. Millgard, President of the Plaintiff, statedin his affidavit that White Oak assured Millgard it would be paid, noevidence has been presented that National Union made or endorsed suchstatements, that White Oak represented it was acting on National Union'sbehalf, or that other evidence of White Oak's agency status with NationalUnion exists.11 Millgard Aff. ¶ 33.

Further, even if an agency relationship between White Oak and NationalUnion is assumed, Millgard does not claim that White Oak'srepresentations were specifically directed at causing Millgard not tofile notice on a timely basis. See J. Bobby Curin, 17 F. Supp.2d at 466(remarking that the subcontractor "did not expressly state that it wouldforbear from bringing suit, nor is it clear whether [the subcontractor]had even contemplated such a suit [] when the statute of limitations ranout). Rather, it summarizes White Oak's assurances and as follows: "[h]adMillgard returned to work on the project, National Union could not haveasserted the technical defenses that it is now relying on because thestatute would be tolled while the work continued."

In other words, Millgard appears to claim that the misleadingstatements by White Oak led it to believe that it would be returning towork once the DOT agreed to the additional payments, thus perhapsextending the starting date for the 180 day notice period, the last dayof work on the project by Millgard. However, Millgard does not claim thatWhite Oak made these alleged misrepresentations after September 7, 1999,the date it concedes that it last performed work. Therefore, there is noindication that Millgard changed its position in amanner which caused itprejudice, see W. v. W., 779 A.2d at 720, and its estoppel claim must failon that basis as well.12

E. Complaint and Date of Completion

In its motion for summary judgment, National Union also argues thatMillgard failed to file its complaint within the one year time period setforth in § 49-42(b). In light of the Court's conclusion regard the180 day time requirement for notice, it need not address this argument.

F. Motion to Enforce Settlement Agreement

Finally, Millgard has moved to enforce an oral settlement agreementpurportedly reached between National Union and Millgard. Millgard claimsthat the parties reached a settlement of this case, and both partiesacknowledge that they jointly notified the Court that the case had beensettled. Upon this report, the Court issued a "Notice to Counsel" [Doc.#33] indicating that under Local Rule 16(b), a case that is reportedsettled will be dismissed if closing papers are not filed with thirtydays. However, based on the parties' representations, the Court concludesthat White Oak found the final terms of the proposed settlement to beunacceptable and decided that National Union did not have the authorityto negotiate a settlement on its behalf.13 As a result, NationalUnion refused to participate further in settlement discussions. NationalUnion argues that the Court should not enforce the proposed settlementbecause no agreement actually was reached.

It is . . . well established that parties are bound to the terms of a contract even though it is not signed and is an oral agreement. See Main Line Theaters, Inc. v. Paramount Film Distributing Corp., 298 F.2d 801, 802-04 (3d Cir.), cert. denied, 370 U.S. 939 (1962). See also Schwartzchild v. Martin, 191 Conn. 316, 320-321 (1983) (parties may be bound even if contract not signed), cited in Cyr. v. Schwitzer, et al., 1998 WL 420778 at *1 (Conn.Super. 1998) Accord Green v. John H. Lewis & Co., 436 F.2d 389, 390 (3d Cir. 1971) (same), citing Good v. Pennsylvania R.R. Co., 384 F.2d 384 [sic] (3d Cir. 1967) and other cases collected. The only essential prerequisite for a valid settlement agreement is that the [parties] . . . mutually assent to the terms and conditions of the settlement. "It is well recognized that an agreement to settle a lawsuit, voluntarily entered into, is binding on the parties." Pugh v. Super Fresh Food Markets, Inc. 640 F. Supp. 1306, 1308-08 (E.D.Pa. 1986), cited in Zauner v. Brewer, 1992 WL 205 179 at *2. (Conn.Super. 1992).

Finally, a settlement is still binding even if a party has a change of heart between the time of the agreement to the terms of the settlement and the time those terms are reduced to writing. Morris v. Scardelletti, et al., 1995 WL 708550 at *1 (E.D.Pa. 1995). However, once a settlement is reached, the agreement may not be repudiated by either party. Rather, such an agreement will be summarily enforced by the court.

Brown v. Nationscredit Commercial, No. 3:99-CV-592(EBB), 2000 WL 888507,at *2 (D.Conn. June 23, 2000). However, a court only has the authority tosummarily enforce a settlement agreement "when the terms of the agreementare clear and unambiguous." Audubon Parking Assocs. Ltd. P'ship v.Barclay & Stubbs, Inc., 626 A.2d 729, 733 (Conn. 1993). Further, "ifthe parties do not intend to enter a binding agreement without awriting, they will not be legally bound until that condition is met."Consarc Corp. v. Marine Midland Bank, 996 F.2d 568, 574-76 (2d Cir. 1993)(construing New York law).14

In this case, Millgard has not shown that all of the parties mutuallyassented to all of the essential terms and conditions of the settlementand did not intend to be bound by the settlement agreement without awritten agreement. For example, while the parties may have reached anagreement on a number of terms in a fairly complex settlement agreement,they apparently did not resolve the significant issue of the $250,000credit should National Union's security interest be subordinated. Thus,at least one of the important terms of the agreement was neither clearand unambiguous, nor agreed to. In addition, it is common to completesuch settlement agreements in writing, particularly under thecircumstances of this case, where the parties have a complicatedrelationship and where substantial financial interests are involved.Finally, Millgard does not point to any evidence indicating that thewritten agreement was contemplated only as a memorialization of the oralsettlement. In fact, although the parties notified the Court that thecase had settled, the Court's notice following oral notificationexpressly contemplates additional steps, including the filing ofadditional documents. It states that "a judgment will be entered on11/21/01 unless closing papers are filed on or before that date, orunless counsel reports prior to that date that the case is not in factsettled." (Doc. #33.)

Accordingly, Millgard's motion to enforce the settlement agreement isdenied.

V. Conclusion

For the foregoing reasons, National Union's motion for summary judgment[Doc. #23] is GRANTED; National Union's motion to strike [Doc. #28] isGRANTED; and Millgard's motion to enforce the settlement agreement isDENIED [Doc. #35]. National Union is dismissed as a defendant and CountThree of the complaint is DISMISSED.15

1. The parties do not dispute that this Court has jurisdictionpursuant to 28 U.S.C. § 1332, as there is complete diversity ofcitizenship between the parties and the amount in controversy exceeds$75,000. Count One of the complaint alleges breach of contract againstWhite Oak; Count Two alleges unjust enrichment against White Oak; andCount Three alleges a cause of action on the payment bond againstNational Union.

2. The recited facts are taken from the parties' Local Rule 9(c)statements and the materials appended thereto, and are undisputed unlessotherwise noted.

3. Conn. Gen. Stat. § 49-42 was amended, effective October 1,1994. The bond was issued on June 6, 1994. There is no dispute that theversion of the statute excerpted above, which was in effect at the timethe bond was issued, controls.

4. The Miller Act is set forth at 40 U.S.C. § 270a et seq.

5. Millgard argues that the Court should consider National Union'smotion as a motion to dismiss, because it concerns subject matterjurisdiction, rather than for summary judgment. Pl.'s Obj. to Def.'sMot. for Summ. J. at 7. However, even if the issues here relate to theCourt's subject matter jurisdiction, as Millgard contends, summaryjudgment is an appropriate method for considering subject matterjurisdiction. See Wright & Miller, Federal Practice & Procedure:Civil 2d § 2713 at 241 ("the label attached to the motion should notprevent the court from deciding a summary-judgment motion challenging thecourt's subject-matter jurisdiction as a suggestion that the courtdismiss the action on that ground."). Also, Millgard has presentedevidence and other materials responsive to the motion for summaryjudgment. Although Millgard's objection to the Motion to Strike (which isconsidered infra) refers to Fed.R.Civ.P. 56(f), which permits the courtto grant a continuance to respond to a motion for summary judgment, nosuch request was made in writing or at oral argument.

6. The two statements are as follows:

32. Upon information and belief, the prosecution of this claim [against the DOT] is being funded by and directed by National Union, which has a security interest in the proceeds of the claim.

34. Upon information and belief, National Union was involved with the project and working with White Oak at the time that White Oak was making these representations [concerning assurances of payment] to Millgard.

Millgard Aff. ¶¶ 32, 34.

7. The Federal Rules of Evidence are applicable when deciding a motionfor summary judgment. Sfasciotti v. Copy-Plus, Inc., No. 85-C6318, 1985WL 5051, at *1 (N.D.Ill. Dec. 23, 1985) ("The Rules of evidence do notapply to the determination of some preliminary questions of fact(Rule 1101(d)(1)), but they do apply to affidavits submitted to the court onmotions to dismiss and for summary judgment.").

8. Millgard also states that it could not obtain affidavits from theemployees of the defendants. However, depositions could have beenutilized to obtain such information. As mentioned in footnote 5, nocontinuance was requested.

9. Millgard also appears to argue that apart from its estoppelargument, National Union received "actual notice" of the claim on thebond. See Pl.'s Obj. to Def.'s Mot. for Summ. J. at 17-18. However,Conn. Gen. Stat. § 49-42(a) requires that written notice be sent tothe surety within the 180 day notice period and Millgard has notpresented any evidence of such written notice prior to May 10, 2000. Seealso footnote 12, infra. Although the Connecticut courts have applied aliberal rule of construction as to the contents of written notice under49-42(a), they still require such notice to be in writing. See OkeeIndus., 623 A.2d at 485-89. Because Millgard has not presented anyevidence of written notice to National Union before May 10, 2000, andappears to rely only on oral and written communications to White Oakbefore that date, that argument fails.

10. The Court notes that "[n]umerous decisions of federal courts ofappeals have . . . held a timely written notice to be sufficient despitetechnical deficiencies in its contents if notice in fact was actually givenand received." Okee Indus., 623 A.2d at 375-76. As stated above in text andin footnotes 9 and 12, no written notice was provided to National Unionbefore May 10, 2000.

11. Even if Mr. Millgard's statements in his affidavit that were thesubject of the Court's decision on the Motion to Strike, supra, areconsidered, they do not affect this result.

12. Millgard has also referred to a copy of a purported notice letterto National Union dated April 7, 2000. See Rettig Aff. Ex. 13. NationalUnion contends it did not receive that letter and it does not comply with§ 42-42(a). In any event, it is still beyond the 180 day noticeperiod.

13. At oral argument, the Court invited the parties to notify it if anevidentiary hearing was requested on this motion, but the Court did notreceive such a request.

14. In Consarc, the Second Circuit enumerated various factors for acourt to consider when determining whether a party intended not to bebound until an agreement was reduced to writing. They are as follows: (1)number of terms agreed upon compared to total number to be included, (2)relationship of the parties, (3) degree of formality attending similarcontracts, (4) acts of partial performance by one party accepted by theother, (5) usage and custom of the industry, (6) subsequent conduct andinterpretation by the parties themselves, (7) whether writing iscontemplated merely as a "memorial," (8) whether contract needs a formalwriting for its full expression, (9) whether any terms remain to benegotiated, (10) whether contract has few or many details, (11) whetherthe amount involved is large or small, (12) whether a standard form iswidely used in similar transactions or whether this is an unusual type ofcontract, (13) the speed with which the transaction must be concluded,(14) the simplicity or complexity of the transaction, (15) theavailability of information necessary to decide whether to enter into acontract, and (16) the time when the contract was entered into. Consarc,996 F.2d at 575-76.

15. Millgard may move to reopen and to amend its complaint withinthirty days, as requested in its Motion to Enforce Settlement Agreement,to add an additional claim against National Union. National Union mayobject to such a request.

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