Does a Tolling Agreement Extend the Miller Act’s (or Little Miller Act’s) One-Year Period to File a Lawsuit on a Payment Bond?

Pursuant to the Miller Act and Florida’s Little Miller Act, when certain subcontractors and material suppliers have not been paid on public construction projects, they must file their lawsuit on the payment bond within one-year after the last day labor was performed or materials were supplied to the project. § 255.05(10), Fla. Stat.; 40 U.S.C. § 3133(4). In some circumstances, those parties may attempt to settle the payment bond dispute and enter into a tolling agreement to suspend the running of the one-year statutory period. However, subcontractors and material suppliers should err on the side of caution before relying on a tolling agreement, as it is unclear whether such an agreement effectively tolls the one-year statutory period to file a lawsuit under Florida law.

Overview of the Miller Act and Florida’s Little Miller Act

Subcontractors and material suppliers cannot file mechanic’s liens on public construction projects. To ensure that certain persons who furnish labor and materials on federal government construction projects get paid, the federal government enacted the Miller Act, 40 U.S.C. Section 3131 to 3134. The Miller Act requires a contractor to furnish performance and payment bonds to the United States “before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government.” 40 U.S.C. § 3131(b). Accordingly, the Miller Act provides that certain first and second tier subcontractors and material suppliers may, upon nonpayment, bring a civil lawsuit on the payment bond. Id. § 3133(b)(1). Any lawsuit for recovery under the Miller Act payment bond, however, “must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person” bringing the lawsuit. Id. § 3133(b)(4).

States, including Florida, have also enacted their own version of a “Little Miller Act” to ensure payment on public construction projects, which is based on the Miller Act. See Miller v. Knob Const. Co., 368 So. 2d 891, 893 (Fla. 2d DCA 1979) (“Section 255.05 was patterned after the federal statute known as the Miller Act”). Florida’s Little Miller Act, Section 255.05 of the Florida Statutes, provides that contractors who enter a public construction contract over $100,000 with the state or local government must post a payment bond and a performance bond. § 255.05(1), Fla. Stat. In the event protected subcontractors or material suppliers have not been paid for work performed, they must file a lawsuit on the payment bond within one-year “after the performance of the labor or completion of delivery of the materials or supplies.” § 255.05(10), Fla. Stat.

Generally, if a subcontractor or material supplier fails to bring a lawsuit under the payment bond within one-year of the date on which labor was last performed or material supplied under the contract, the lawsuit will be time-barred under the Miller Act and Florida’s Little Miller Act. See Thomas v. Burkhardt, 636 F. App’x 992, 994 (11th Cir. 2016); Hammet Co. v. Fed. Ins. Co., 560 So. 2d 326, 327 (Fla. 1st DCA 1990).

Overview of Case Law as to Tolling Agreements

Case law is conflicting as to whether parties can toll the one-year statutory period to file a lawsuit under the Miller Act, Florida’s Little Miller Act, or other analogous Little Miller Acts.

For example, the Supreme Court of Connecticut in Paradigm Contract Management Co. v. St. Paul Fire and Marine Insurance Co., 293 Conn. 569 (2009) held that the one-year statutory period in Connecticut’s Little Miller Act could not be tolled or extended by agreement. In this case, the subcontractor and contractor entered into a written tolling agreement, wherein the subcontractor agreed to withdraw the lawsuit on the bond, and the contractor agreed to waive any statutory limitation defenses that might arise. After the one-year statutory period, the subcontractor brought a lawsuit seeking payment under the bond, and the contractor moved to dismiss the lawsuit on the ground that it was barred by the time limitation set forth in the statute. The court held that the subcontractor was time-barred from commencing its lawsuit because it was brought more than one-year after the date work was last performed on the project. Specifically, the court stated that the one-year statutory requirement was “not to be treated as an ordinary statute of limitation, but as a jurisdictional requirement establishing a condition precedent” to maintaining a lawsuit under that section. Therefore, the tolling agreement did not extend or toll the one-year statutory requirement under Connecticut’s Little Miller Act.

However, other courts have rejected the proposition that the one-year statutory period is jurisdictional, and found that a tolling agreement may effectively extend or toll the one-year statutory requirement for filing a lawsuit under the Miller Act. For example, in United States v. Fid. & Deposit Co. of Maryland, No. 3:15-CV-1423, 2016 WL 7012304, at *4 (N.D. Ohio Dec. 1, 2016), the subcontractor and contractor entered into a tolling agreement, which extended the date for filing a lawsuit under the payment bond. The subcontractor subsequently brought a lawsuit under the Miller Act’s payment bond. The contractor moved to dismiss the lawsuit because it wasn’t brought within the one-year statutory requirement. The court held that there was no authority to suggest that the time limits under the Miller Act are jurisdictional, and denied the contractor’s motion to dismiss. Therefore, in this case, the tolling agreement did extend or toll the one-year statutory requirement under the Miller Act. See also U.S. ex rel. Air Control Techs., Inc. v. Pre Con Indus., Inc., 720 F.3d 1174, 1178 (9th Cir. 2013) (“the Miller Act’s statute of limitations is a claim-processing rule, not a jurisdictional requirement”); Arena v. Graybar Elec. Co., 669 F.3d 214, 221 (5th Cir. 2012) (“the one-year period of the Miller Act is limitational and not jurisdictional”).

Florida courts have not answered the question as to whether a tolling agreement can effectively extend or toll the one-year statutory period for filing a lawsuit under the Miller Act or Florida’s Little Miller Act. Florida courts do offer a split of authority regarding whether the one-year statutory period is jurisdictional or non-jurisdictional. For example, the United States District Court, Middle District of Florida, recently stated that the one-year limitation provided in the Miller Act is not jurisdictional. Therefore, under the Middle District of Florida’s interpretation, one can argue that a tolling agreement can effectively extend the one-year statutory period. However, the First District Court of Appeal of Florida (“DCA”), stated that the one-year limitation period in the Miller Act is jurisdictional. Therefore, under the First DCA’s interpretation, one can argue that a tolling agreement cannot extend the one-year statutory period. See United States v. Berkley Reg’l Ins. Co., No. 615CV331ORL41TBS, 2016 WL 7229123, at *3 (M.D. Fla. Mar. 25, 2016); Power Sys., Inc. v. Stallings & McCorvey, Inc., 454 So. 2d 736, 737 (Fla. 1st DCA 1984).

Conclusion

Based on the conflicting case law cited above, the safest approach for subcontractors and material suppliers to protect their interests under Florida’s Little Miller Act and the Miller Act is to timely file the lawsuit and seek a stay. Subcontractors and material suppliers should not rely on a tolling agreement to extend the one-year statutory period for filing their payment bond lawsuit on a public project.

Authors:

• James O. “Joby” Birr, Esquire
• Melissa Murrin, JD Candidate