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Allgood Elec. Co. v. Martin K. Eby Const. Co.

June 25, 1996


Appeal from the United States District Court for the Middle District of Georgia. (No. 93-125-1MAC(WDO)). Wilbur D. Owens, Jr., Judge.

Before Anderson and Black, Circuit Judges, and Henderson, Senior Circuit Judge.


This appeal arises out of a construction contract dispute between Allgood Electric Company ("Allgood") and Martin K. Eby Construction Company, Inc. ("Eby"). On March 12, 1993, Allgood, an electrical subcontractor for a building project, filed suit in the Superior Court of Dooly County, Georgia against Eby, the contractor, and Eby's sureties, Federal Insurance Company ("FIC") and Fidelity & Deposit Company of Maryland ("FDCM").*fn1 The defendants subsequently removed the case to the United States District Court for the Middle District of Georgia predicating jurisdiction on diversity of citizenship. See 28 U.S.C. ยงยง 1332, 1441. Thereafter, on April 13, 1994, the district court granted summary judgment in part in favor of the defendants. Allgood then appealed. This court dismissed the appeal for lack of jurisdiction because the order granting partial summary judgment did not dispose of all of the issues raised in the complaint and it had not been certified for immediate review in accordance with Fed.R.Civ.P. 54(b).*fn2 Later, the district court directed that a Rule 54(b) judgment be entered and Allgood appealed again. For the reasons that follow, we reverse the district court's grant of summary judgment and remand for further proceedings.


On January 10, 1990, Eby entered into a contract with the Georgia Building Authority (Penal) ("GBA") to build the Dooly Correctional Institution in Unadilla, Georgia. Pursuant to a subcontract dated January 29, 1990, Allgood then agreed to perform certain electrical work for the project at a stipulated price. After its work was completed, Allgood filed this action alleging, inter alia, that Eby failed to properly coordinate the various phases of the prison's construction and that Eby's mismanagement in that respect caused delays which resulted in increased expense to Allgood. Allgood sought to recover these alleged additional costs from Eby and also claimed entitlement to certain sums of money which had been retained in accordance with the prime and subcontracts*fn3 pending the completion of construction.*fn4

Eby subsequently moved for summary judgment. It contended that, during the course of construction, Allgood executed certain form documents that either waived or released all of its demands against Eby. The forms included approximately twenty-four applications for payment and a completion certificate. In support of the motion, Eby submitted, in addition to other evidence, what appears to be photocopies of these documents.

The payment applications identified the project and were addressed to Eby. Each application specified that it was for work performed by Allgood for a certain period of time and stated that,

in consideration of the payment received, and upon receipt of the amount of this request, the undersigned does hereby waive, release, and relinquish all claim or rights of lien which the undersign [sic] may now have upon the premises above described except for claims for right of lien for contract and/or change order work performed to extent [sic] that payment is being retained or will subsequently become due.

(R1-35, Deposition of Gloria A. Alday, Exhibit 6). The sworn, notarized signatures of Allgood's President, Gloria A. Alday, or its Vice-President and Project Manager, Timothy A. Morgan, appeared on the applications.

The completion certificate made a part of the record by Eby was addressed to the Georgia State Financing and Investment Commission ("GSFIC"), which was responsible for discharging the state's administrative duties with respect to the construction. This form also identified the project and stated that it was a "Certificate Regarding Subcontractor's Completed Work and Retainage Release." (R1-33, Affidavit of Charles Schultz, Attachment).*fn5 The body of the document contained the following language:*fn6

1. This is to certify that our work is one hundred percent complete for our subcontract number S28328-21804 and request that our retainage be released in accordance with the contract documents. Our scope of work included the Division 16 Electrical material and installation. The total amount of retainage due is $138,949.06.

2. The Subcontractor hereby certifies that all work required under the above contract has been performed in accordance with the terms thereof, that all materialmen, subcontractors, mechanics, and laborers have been paid and satisfied in full, and that there are no outstanding claims of any character (including disputed claims or any claims to which the subcontractor has or will assert any defense) arising out of the performance of the contract which have not been paid and satisfied in full except as listed hereinbelow:

[Enter "None" or List]

3. The Subcontractor further certifies that to the best of his knowledge and belief there are no unsatisfied claims for damages resulting from injury or death to any employees, subcontractors, or the public at large arising out of the performance of the contract, or any suits or claims for any other damage of any kind, nature, or description which might constitute a lien upon the property of the Owner.

4. The Subcontractor makes this certificate for the purpose of receiving final payment in full settlement of all claims against the Owner arising under or by virtue the [sic] contract, and acceptance of such payment is acknowledged as a release of the Owner ...

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