Clifford F. MacEvoy Co. v. United States Ex Rel. Calvin Tomkins Co.

Background

MacEvoy Company was the prime contractor on a government housing project in New Jersey. The Government required a payment bond by MacEvoy and its surety, Aetna, to protect those supplying labor and materials. Calvin Tomkins Company sold building materials to James H. Miller & Company, which in turn furnished those materials to MacEvoy; Miller did not perform work on the project and later failed to pay Tomkins $12,033.49. Tomkins sent written notice to MacEvoy and the surety within ninety days and sued on the payment bond after MacEvoy paid Miller in full. Lower courts were split: the District Court dismissed, the Court of Appeals allowed Tomkins’ claim, and the Supreme Court granted review.

Reasoning

The main question was whether the Miller Act lets a supplier who sells to a materialman (not a subcontractor) recover on the prime contractor’s payment bond. The Court examined the Act’s language and its legislative history, noting the Act’s general protection for those who supply labor or materials but also a proviso that limits bond claims to persons with either direct contracts with the prime contractor or direct contracts with a subcontractor who give statutory notice. The Court concluded that Congress used “subcontractor” in its technical building-trade sense — excluding ordinary materialmen — and that allowing remote claims would unfairly expose prime contractors and sureties to vast, indeterminate liabilities.

Real world impact

The Court reversed the appeals court and held that Tomkins cannot recover on MacEvoy’s payment bond. Remote suppliers who sell to materialmen (rather than contracting with subcontractors) cannot use the Miller Act bond to collect unpaid balances. Suppliers will need to rely on contracts with subcontractors, insist on contractual protections, or pursue other remedies. The decision narrows who can claim on government payment bonds and reduces bond exposure for prime contractors and their sureties.