Cemex Construction Materials South, LLC v. Falcone Brothers & Associates, Inc. – 4/30/2015

May 28, 2015

Arizona Court of Appeals Division Two holds that all notices under the Little Miller Act must be sent by registered or certified mail.

Falcone was the general contractor for a public works project in Tucson, which was bonded and guaranteed by Guarantee Company of North America (GCNA).  Falcone subcontracted with J&S Commercial Concrete Contractors for concrete work, and J&S, in turn, subcontracted to Cemex for materials.  After J&S failed to pay for the materials, Cemex filed suit against J&S, Falcone, and GCNA.  J&S did not answer, and Cemex obtained a default judgment.  Cemex filed a motion for summary judgment against Falcone and GCNA, arguing that it was entitled to payment from the guarantee bond under Arizona’s “Little Miller Act,” which ensures payment to subcontractors on public projects.

In its motion, Cemex stated that it had filed four preliminary 20-day notices to Falcone pursuant to A.R.S. § 34-223(A) by first-class mail, postage prepaid, with a certificate of mailing.  Falcone responded that it never received any of the alleged notices, and argued that the notices did not comply with the statute because they were not sent by registered or certified mail as required by A.R.S. § 33-992.01.  Cemex argued that § 33-992.01 did not apply, and that the requirement in § 34-223(A) for registered or certified mail applied only to the 90-day final notice but not to the 20-day preliminary notice. The trial court ruled for Cemex, and Falcone timely appealed.

The Court of Appeals reversed.  The last sentence of § 34-223(A) refers to “such notice” in the singular, indicating not that the registered mail requirement only applies to the 90-day notices, but that it applies to any individual notice sent by a Little Miller Act claimant, including the preliminary notice.  The interpretation urged by Cemex would create a gap in the statute by providing no guidance on how to serve a preliminary notice.  Recognizing that its decision jeopardizes an unknown number of pending Little Miller Act claims, the court noted that the legislature is free to correct the statute.  The court also noted that the harshness of the notification requirements is mitigated by case law holding that actual notice of a claim is sufficient, and remanded the case for a factual determination of whether Falcone received actual notice.

Judge Kelly wrote the opinion for the court; Judges Howard and Vásquez joined