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INSURANCE COMPANY NORTH AMERICA v. CENTRE CONCRETE COMPANY (07/13/87)

decided: July 13, 1987.

INSURANCE COMPANY OF NORTH AMERICA, APPELLANT
v.
CENTRE CONCRETE COMPANY, A CORPORATION, APPELLEE



Appeal from the Order of the Court of Common Pleas of Cambria County, in case of Centre Concrete Company, a corporation v. AGI, Inc. and Insurance Company of North America, No. 1983-3263, Argument Court No. 5200, dated August 5, 1985.

COUNSEL

Louis C. Long, Meyer, Darragh, Buckler, Bebenek & Eck, for appellant.

David J. Kaltenbaugh, with him, Gilbert E. Caroff, for appellee.

Judges Craig and Barry, and Senior Judge Narick, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 107 Pa. Commw. Page 327]

Insurance Company of North America (INA) has filed an interlocutory appeal*fn1 of an order by the Court

[ 107 Pa. Commw. Page 328]

    of Common Pleas of Cambria County which denied INA's motion for judgment on the pleadings. The primary issue raised by that motion and by the present appeal is whether an assumpsit action by Centre Concrete Company against contractor AGI, Inc., and its surety, INA, was filed after the expiration of the statute of limitations.

The facts are not at issue. AGI, Inc., was awarded a road construction contract by the Commonwealth of Pennsylvania, Department of Transportation. To that end, AGI contracted with Centre for the latter to supply materials for the project. Following Centre's final delivery of materials on October 21, 1982, AGI owed Centre $26,114.75 for materials furnished but has not made payment. On January 11, 1983, Centre submitted its claim to INA, which had issued to AGI a payment bond, as required by section 3(a)(2) of Public Works Contractors' Bond Law of 1967 (Bond Law), Act of December 20, 1967, P.L. 869, 8 P.S. § 193(a)(2).*fn2

[ 107 Pa. Commw. Page 329]

On December 2, 1983, INA wrote to Centre, Under Pennsylvania law you were required to file suit within one year from the last day you performed work or supplied material on the project. . . . [T]he last date you furnished labor, material or supplies and services in connection with the job was on October 21, 1982. Consequently, we are not in a position to honor your claim.

Centre then filed suit against AGI and INA on the bond on December 2, 1983. In new matter, INA raised the affirmative defense that Centre's action was time-barred and then moved for judgment on the pleadings.

INA's statement refusing payment does in fact reflect the literal language of section 7(b) of the Bond Law, 8 P.S. § 197, which was repealed by the Judical Act Repealer Act (JARA), Act of April 28, 1978, P.L. 202, 42 Pa. C.S. § 2001-2004. Section 7(b) had provided that no action upon a payment bond could be commenced after the expiration of one year from the day on which the last of the labor or material had been supplied. Based upon that language, the Pennsylvania courts had uniformly recognized that the statute of limitations began to run on that final supply date. See Valley Forge Industries, Inc. v. Armand Construction, ...


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