In May 2015, I authored a post addressing the Arizona Court of Appeals’ then-recent decision in Cemex Construction Materials South, LLC v. Falcone Bros., Inc., 237 Ariz. 236 (App. 2015). My post can be found here. The Cemex decision will, however, cease being good law next Saturday. The case was legislatively overruled by House Bill 2268, which was signed into law by Governor Ducey on May 12, 2016 and will become effective on August 6, 2016.
As a reminder, Cemex upended the longstanding construction industry practice of mailing preliminary twenty-day notices on Little Miller Act projects via first class mail with a certificate of mailing. This had been done as a cost saving measure because: (1) Arizona’s mechanic’s lien statute requiring twenty-day notices—A.R.S. § 33-992.01—expressly provides in Subsection (F) that the notices may be provided by “first class mail sent with a certificate of mailing;” and (2) the Little Miller Act section requiring 20-day notices in certain instances—A.R.S. § 34-223(A)—incorporated by reference a significant portion of § 33-992.01. Nevertheless, Cemex held that this industry practice did not comply with § 34-223(A). Specifically, the Court found that the mailing provisions of § 33-992.01(F) were excluded from § 34-223(A), such that Little Miller Act 20-day notices were required to “to be served by registered or certified mail,” like Little Miller Act ninety-day post-completion notices.
***UPDATE – 7/15/2016***
The Court of Appeals’ decision in in Cemex Construction Materials South, LLC v. Falcone Bros. & Assoc., Inc., 237 Ariz. 236 (App. 2015), which is the subject of this post from May 2015, will cease being good law on August 6, 2016. The case was legislatively overruled by HB 2268, which was signed into law by Governor Ducey on May 12, 2016 and will become effective on August 6, 2016. My post on the effects of HB 2268 and its overruling of the Cemex decision can be found here.
As matter of first impression, the Ninth Circuit Court of Appeals recently held in Technica LLC ex rel. U.S. v. Carolina Cas. Ins. Co., 749 F.3d 1149 (9th Cir. 2014) that state laws preventing unlicensed contractors from recovering for unpaid work do not apply to actions under the federal Miller Act.
In Technica, a sub-subcontractor on a federal project in California filed suit for payment under the Miller Act against the general contractor and its surety. The trial court concluded that because the sub-subcontractor was not a licensed contractor as required by California law, it was precluded from pursuing its Miller Act claim for payment. The particular licensing statute at issue in Technica was California Business and Professions Code § 7031(a), which provides in part that:
In Ramona Equipment Rental, Inc. v. Carolina Casualty Ins. Co., et al., Case No. 12-55156 (June 20, 2014), the United States Court of Appeals for the Ninth Circuit recently addressed for the first time the issue of when a 90-day Miller Act notice needs to be served for materials and/or equipment furnished on an open book account. Consistent with decisions from the First, Fourth, and Fifth Circuits, the Ninth Circuit held “that if all the goods in a series of deliveries by a supplier on an open book account are used on the same government project, the ninety-day notice is timely as to all deliveries if it is given within ninety days from the last delivery.”