Because liens cannot be placed on public property, the Miller Act was passed to provide recourse for subcontractors and suppliers working on federal projects. Miller Act claims have a strict one-year period during which they can be filed. Should a claimant file after one year following the last date they provided labor or materials to a project, they face an absolute bar to recovery. For many issues, the ability to use the relation back doctrine provides a little wiggle room to the statute of limitations. Though Miller Act claims are not easily tossed aside, only a small minority of jurisdictions allow for claims under the Miller Act to relate back to extend the one-year deadline. The following is a recent case from one of those courts.
Plaintiff, United States of America for the Use of Heavy Materials (USAHM), contracted with Tip Top Construction Corp. for a project in the Virgin Islands. According to the contract, USAHM was to provide materials to Tip Top for construction of a Joint Forces Readiness Headquarters Facility. As it was a federal project governed by the Miller Act, Tip Top was required to establish performance and payment bonds for the project. USAHM provided the materials necessary under the contract, but Tip Top failed to fully pay USAHM for the materials provided.
USAHM initiated an action against Tip Top as well as Travelers, the surety. While the original action was filed in a timely manner, the bond number included in USAHM’s complaint was incorrect. All other facts pleaded in the complaint related to the construction of the Joint Forces Readiness Headquarters Facility.
Tip Top moved to dismiss the action due to the incorrect bond number. USAHM responded by filing an amended complaint, correcting it. Because the amended complaint was filed outside of the one year time limit established by the Miller Act, USAHM also filed a motion requesting that the amended complaint relate back to the original complaint that was timely filed. USAHM noted that other than the corrected bond numbers, the petitions were nearly identical.
Tip Top moved to dismiss, arguing the relation back doctrine is inapplicable to claims brought under the Miller Act.
Wait, what is “relating back” in this context?
Relating back is a doctrine rooted in Federal Rules of Civil Procedure Rule 15(c). Essentially the rule extends the time period for filing a claim by allowing a petitioner to correct a mistake, aid legal theories, or add additional related causes of action to a filing that was originally made in a timely manner. Under the rule, an amended claim relates back when “the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading.” If the amended claim sufficiently relates back to the claim that was properly filed, the statute of limitations will not bar the claimant from recovery.
Note that this type of procedural relating-back is different than the “relation-back doctrine” mechanics lien claimants make use of in priority battles. When applicable, in mechanics lien parlance relation-back generally refers to the fact that any timely-filed mechanics lien relates-back to the first work performed on the property as a whole for priority purposes. This puts all mechanics liens on equal footing, and sets their priority date as the start of the project – irrespective of when the work was done by the individual lien claimant. In the case at issue, however, relating-back has a different procedural meaning. Here, the civil procedure definition of relating back means the ability to make a certain claim (or to “fix” a claim already made) relates back to the date of the original pleading, provided certain requirements are met.
Does this doctrine apply to Miller Act claims?
The answer to this question is typically “no.” A majority of courts have not allowed claims under the Miller Act to relate back to avoid the one-year deadline, but a few jurisdictions buck the trend. Here, a United States District Court in the Virgin Islands did just that. The court cited holdings from the 9th and 3rd circuits in coming to the conclusion that the relation back doctrine is applicable to claims brought under the Miller Act.
Deciding the Miller Act was susceptible to the relation back doctrine, the court now had to determine whether the amended petition related back to the original filing. As mentioned above, claims relate back when rooted in the same facts and theories set forth in the original filing. Here, the amended complaint was essentially identical to the original complaint, save for the corrected bond number. Because nearly all of the facts were correctly stated in the original complaint and remained unchanged in the amended version, the court found that the original complaint sufficiently notified the defendant of the factual situation and theory. Finding that the complaint states a valid cause of action under the Miller Act, the court denied Tip Top’s motion to dismiss.
What can we take away?
Honestly, not all that much. This opinion is not binding outside the district court’s jurisdiction and could still be overturned if appealed. As previously mentioned, only a few jurisdictions allow Miller Act claims to relate back. But it should be noted that this court struggled to find any reasoning to prevent the relation back doctrine from applying to the Miller Act. When asserting lien and bond rights, procedure is usually king. Should other courts agree and apply the relation back doctrine to Miller Act claims, subcontractors and suppliers will gain some leverage in the battle to get paid. But I wouldn’t hold my breathe.