PARADIGM CONTRACT MANAGEMENT COMPANY v. ST. PAUL FIRE & MARINE INSURANCE COMPANY f/k/a UNITED STATES FIDELITY & GUARANTY COMPANY, SC 18301

Judicial District of Stamford

 

     Suretyship/Guaranty; Whether the Plaintiff's Suit on a General Contractor's Payment Bond is Jurisdictionally Barred by the One Year Limitation Period Provided in General Statutes § 49-42 (b) of the Little Miller Act; Whether There is a Common Law Right to Sue on a General Contractor's Payment Bond.  In April, 1997, pursuant General Statutes § 49-41 et seq., known as the "Little Miller Act," United States Fidelity & Guaranty Company (USF&G), as surety, issued a general contractor's payment bond (bond) for the labor and materials to be supplied for a public works construction project.  Section 49-42 (b) requires a claimant to commence a suit on a payment bond within one year of the day that the claimant last performed work or supplied materials on the bonded project.  The time period in § 49-42 (b) is a jurisdictional requirement establishing a condition precedent to maintaining an action under the Little Miller Act.  See American Masons' Supply Co. v. F.W. Brown Co., 174 Conn. 219 (1978).  In 1998, Paradigm Contract Management Company (Paradigm) brought suit against USF&G on the bond, alleging that it was owed $3,616,250 for labor and material it provided for the project.  On April 19, 2002, the parties agreed not to try the case at that time and entered into a written "Tolling Agreement," pursuant to which the case was withdrawn by Paradigm and USF&G waived any and all statute of limitations defenses for a period of one year.  On March 18, 2003, Paradigm brought a second suit against USF&G on the bond.  USF&G moved to dismiss for lack of subject matter jurisdiction on the ground that the action was commenced after the expiration of the one year period provided in § 49-42 (b).  In response, Paradigm argued it was not suing USF&G under the Little Miller Act, but rather its case was premised on a common law cause of action to enforce the provisions of the bond.  Therefore, Paradigm asserted that § 49-42 (b) was not applicable and that its action was subject only to the one year statute of limitations provision of the bond itself, which had been waived and extended by the Tolling Agreement.  Noting that, prior to the enactment of the Little Miller Act, an action on a general contractor's payment bond did not exist at common law, the court concluded that there was no common law right to sue on a general contractor's payment bond and that an action under the Little Miller Act was the exclusive remedy available to a party seeking to recover under such a bond.  Next, the court observed that while parties may agree on bond protection greater than that required by the Little Miller Act, that freedom to expand bond coverage does not extend to the realm of the Little Miller Act's enforcement mechanism, specifically, the jurisdictional one year period of § 49-42 (b).  To hold otherwise, the court opined, would contravene the established doctrine that parties cannot confer subject matter jurisdiction on a court by agreement.  Accordingly, the trial court granted USF&G's motion to dismiss, ruling that Paradigm's action was jurisdictionally barred by § 49-42 (b).  In this appeal, the Supreme Court will review the trial court's decision.