No. 1057 Pittsburgh, 1980, Appeal from the Order of the Court of Common Pleas, Civil Division, Allegheny County, at No. 6987 of 1979.
Theodore E. Breault, Pittsburgh, for appellant.
Michael J. Kearney, Jr., Pittsburgh, for appellees.
Cercone, President Judge and Brosky and Hoffman, JJ. Brosky, J., files a dissenting opinion.
[ 293 Pa. Super. Page 13]
Appellant, C. M. Eichenlaub Company, Inc., a subcontractor, brought an action in assumpsit on July 10, 1979, against the general contractor, Cocivera Construction Company, and against Fidelity & Deposit Company of Maryland, the surety, seeking payment for labor and materials supplied pursuant to its subcontract agreement with the general contractor. Under the subcontract agreement, appellant was to provide factory built cabinets and other items for the Warminster Township Free Library. Cocivera Construction Company failed to defend and judgment by default in favor of appellant was entered. Fidelity, however, defended on the ground that appellant's suit was barred by the one year time limitation contained in the surety bond. The surety bond specifically provided that any action had to be brought within one year after the time the cause of action accrued.*fn1 Following an award of judgment to appellant by a board of arbitrators, Fidelity appealed to the Court of Common Pleas. After cross motions for summary judgment were filed, the court awarded summary judgment in favor of Fidelity, finding that the action had been untimely filed. It is from this order that appellant takes the present appeal. The sole issue raised by appellant is whether the lower court erred in granting Fidelity's motion for summary judgment based upon the expiration of the statute of limitations contained in Fidelity's surety bond. It is appellant's contention that the grant of summary judgment was improper since issues of fact existed as to whether or not the limitation of action provision had begun to run. The kernel issue which must be decided, then, is whether or not the cause of action had accrued for the running of the one year statute of limitation.
[ 293 Pa. Super. Page 14]
Generally, it is the breach of a duty which gives rise to a cause of action. See Chittenholm v. Griffin, 357 Pa. 616, 55 A.2d 324 (1947); Bell v. Brady, 346 Pa. 666, 31 A.2d 547 (1943). See also Irrera v. Southeastern Pennsylvania Page 14} Transportation Authority, 231 Pa. Super. 508, 517, 331 A.2d 705, 709 (1974). Where, as here, the liability of a surety is concerned, the provisions of the underlying contract must be examined, since the liability of a surety, such as Fidelity, commences only upon breach of the underlying contract. See Plummer v. Wilson, 322 Pa. 118, 185 A. 311 (1936); In re Brock, 312 Pa. 7, 166 A. 788 (1933); Pgh. Construction Co. v. West Side Belt R. Co., 227 Pa. 90, 75 A. 1029 (1910). The provisions of the underlying May 24, 1976, contract between Cocivera and appellant in pertinent part provides:
B. The contract price shall be paid from time to time as the materials are delivered and the work progresses as follows:
(4) Builder (Cocivera) shall be under no obligation to make any payments to contractor (appellant) for materials delivered or for work performed by contractor unless and until Builder is first paid for such materials and work by the owner (Warminster Township Free Library)
According to this contract term, Cocivera was not required to make any payment to appellant unless and until it had first been paid by the owner. Therefore, the cause of action could not accrue until Cocivera was paid by the owner, Warminster Township Free Library, and subsequently defaulted on his payment to appellant.
The record, however, is uncertain as to when, if at all, Warminster Library paid Cocivera Construction for work and materials supplied by appellant. Included among the papers submitted by Fidelity, there is a letter, dated March 7, 1978 from Doris Anderson, Vice-President of appellant company, to Fidelity requesting their assistance in collecting the remaining balance of $4,954 due appellant. In the letter Ms. Anderson wrote: "We have contacted the contractor several times asking for payment and in addition have been told by the architect that our portion of the contract has been approved and the ...