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CAN-TEX INDUS. v. SAFECO INS. CO. OF AMERICA

November 8, 1978

CAN-TEX INDUSTRIES, a division of Harsco Corporation, Plaintiff,
v.
SAFECO INSURANCE COMPANY OF AMERICA, General Insurance Company of America, Defendants



The opinion of the court was delivered by: SNYDER

Sureties on a construction contract file a Motion for Partial Judgment On The Pleadings under Rule 12(c) Fed.R.Civ.P. *fn1" and seek a determination that finance charges and attorney's fees claimed by a creditor of the general contractor-principal are not recoverable under their bond. The bond was executed in accordance with the requirement of the Public Works Contractors Bond Law of 1967, 8 P.S. § 191 Et seq., that the general contractor provide a payment bond for the protection of subcontractors on any public works project.

For the purposes of Defendants' Motion, we take as true all well pleaded material allegations of the Complaint. Art Metal Construction Co. v. Lehigh Structural Steel Co., 116 F.2d 57 (3rd Cir. 1940), Cert. denied 316 U.S. 694, 62 S. Ct. 1296, 86 L. Ed. 1764 (1942). Conclusions of law, however, are not deemed admitted. Rosenhan v. United States, 131 F.2d 932 (10th Cir. 1942), Cert. denied 318 U.S. 790, 63 S. Ct. 993, 87 L. Ed. 1156 (1943). Judgment on the pleadings may be granted only if on the facts so admitted, the moving party is clearly entitled to judgment. Huntt v. Government of Virgin Islands, 339 F.2d 309 (3rd Cir. 1964).

 The Complaint alleges that:

 1. The Ernest Renda Contracting Company, general contractor on a work site owned by the Carroll Township Authority, is indebted to Plaintiff in the amount of $ 79,263.63 for a quantity of vitrified clay pipe sold and delivered to the contractor at that site, pursuant to a contract between the parties.

 2. The Renda Company is also indebted to the Plaintiff in the amount of $ 10,245.93, representing a finance charge of 11/2% Per month on the overdue account, as authorized by the subcontract.

 3. The Renda Company is also indebted to the Plaintiff in the amount of $ 29,835.10 for attorney's fees, computed at 331/3% Of the balance due, also authorized by the subcontract.

 4. The Plaintiff is entitled to recover the amount of $ 119,349.66 from the Surety, representing the balance, finance charges and attorney's fees as provided for in the subcontract.

 The Defendants deny any obligation as to the fourth allegation as a matter of law.

 The Public Works Contractors Bond Law of 1967 provides in pertinent part that:

 
(2) A payment bond at one hundred percent of the contract amount. Such bond shall be solely for the protection of claimants supplying labor or materials to the prime contractor to whom the contract was awarded, or to any of his subcontractors, in the prosecution of the work provided for in such contract, and shall be conditioned for the prompt payment of all such material furnished or labor supplied or performed in the prosecution of the work. "Labor or materials' shall include public utility services and reasonable rentals of equipment, but only for periods when the equipment rented is actually used at the site."

 8 P.S. § 193.

 The Payment Bond at issue here expressly provides, at Paragraph 5, that:

 
"(T)he terms and conditions of this Bond are and shall be that if the Principal and any subcontractor of the Principal to whom any portion of the work under the Contract shall be subcontracted, and if all assignees of the Principal and of any subcontractor, promptly shall pay or shall cause to be paid, in full, All money which may be due any claimant supplying labor or materials in the prosecution and performance of the work in accordance with the Contract and in accordance with the Contract Documents, including any amendment, extension or addition to the Contract and/or to the Contract Documents, for material ...

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