In Devin B. Strickland v. Arch Insurance Company, No. 17-10610, 2018 WL 327443 (11th Cir. Jan. 9, 2018), the Eleventh Circuit Court of Appeals affirmed the District Court’s determination that Strickland’s claim against the bond surety was time-barred due to his waiting more than one year after the completion of the contract and the acceptance by the public authority to bring suit.
Strickland provided sand to Douglas Asphalt
Paving Company (“Douglas”) for a Georgia Department of Transportation (“GDOT”)
road improvement project. Arch issued a payment bond on behalf of Douglas for
the project in 2003. In 2007, Douglas was terminated and 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.
In August 2010, GDOT determined that the work on
the project was substantially complete and ready for final inspection. Based upon GDOT’s determination that some of the work
completed was non-conforming, the project was not accepted as complete at that
time.
In September 2012, Strickland sent a demand letter
to Arch demanding payment under the payment bond. Arch acknowledged the claim and asked for additional
documentation and a proof of claim.
Strickland took no further action until it filed suit in August
2014. In September 2014, GDOT sent a letter of “final
acceptance,” which stated that the project had “been accepted” by GDOT as of
April 17, 2012.
Arch filed Summary Judgment seeking dismissal of Strickland’s
claim, arguing that it was barred by the applicable one year statute of
limitations. Strickland maintained that although GDOT may have noted it had
accepted the work as of April 17, 2012, because it had not sent its letter of
final acceptance until September 2014, the suit was timely.
The Eleventh Circuit was unpersuaded by
Strickland's argument. It felt that the letter of final acceptance sent by GDOT
had no relation to the completion or the actual acceptance of the work. The
Court noted that language of the statute plainly triggers the limitations
period at acceptance, not “final acceptance.” It reasoned that if it were to
adopt Strickland’s interpretation, that final acceptance hinged on a public
authority’s internal policy and procedure as to when letters are sent and that
would frustrate the purpose of the statute. The Court held although GDOT waited
until 2014 to send an acceptance letter, the letter made clear that GDOT had
accepted the work in 2012 and the statute was triggered at that time. The Court
concluded that Strickland’s suit in 2014 was untimely.
This case is a good reminder as to the importance of timely
requesting payment and determining when work is accepted, especially when
completing work for public authorities. Courts will strictly construe
limitations periods and a contractor will not be afforded additional time
simply because an owner or public authority waits to provide written
documentation of acceptance in accordance with its own internal policies or
procedures.
