Horst Masonry v. ProControls, et al., (8th Cir. 2000)

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United States Court of Appeals FOR THE EIGHTH CIRCUIT

No. 99-2186SD

Horst Masonry Construction, Inc., United States of America for the use and benefit of Plaintiff; Horst Acoustical Company, Inc., USA for the use and benefit of Horst Acoustical Co., Inc., Appellees, v. ProControls Corporation; Capitol Indemnity Corporation, Appellants.

Submitted: February 29, 2000 Filed: March 10, 2000

Before RICHARD S. ARNOLD, BOWMAN, and BEAM, Circuit Judges.

PER CURIAM.

ProControls Corporation and Capitol Indemnity Corporation appeal from the District CourtÂ’s1 award of attorneysÂ’ fees to the United States "for the use of" Horst Masonry Construction, Inc. and Horst Acoustical Co., Inc. in this Miller Act case.2 We affirm.

In July 1998, Horst Masonry and Horst Acoustical, construction subcontractors, sued ProControls, the general contractor, and Capitol, the surety on a payment bond, for unpaid labor and materials. Defendants initially denied liability and asserted a number of defenses, including an offset defense. In February 1999, two days prior to trial, defendants stipulated with Horst Masonry and Horst Acoustical to a judgment on the Miller Act claims for the full amount claimed. The sole issues remaining for trial were the claim for attorneysÂ’ fees and the appropriate rate of prejudgment interest. At the conclusion of the trial, the District Court awarded Horst Masonry and Horst Acoustical attorneysÂ’ fees.

Initially, we conclude that the District Court correctly applied federal rather than state law in determining whether to award attorneysÂ’ fees. See F. D. Rich Co. v. United States for use of Indus. Lumber Co., 417 U.S. 116, 127 (1974) (finding no evidence of "congressional intent to incorporate state law to govern such an important element of Miller Act litigation as liability for attorneysÂ’ fees"); see also United States for use of Olson v. W.H. Cates Constr. Co., 972 F.2d 987, 990 (8th Cir. 1992)

On Appeal from the United

States District Court

for the District of

South Dakota.

[Not To Be Published]

("[f]ederal law, not state law, governs the scope of the remedy afforded by the Miller Act").

Only defendantsÂ’ post-litigation conduct, and not pre-litigation conduct, is relevant when awarding plaintiffs attorneysÂ’ fees. See Chambers v. NASCO, Inc., 501 U.S. 32 , 53 (1991) (courtÂ’s inherent power to award attorneysÂ’ fees against litigant guilty of bad faith "depends not on which party wins the lawsuit, but on how the parties conduct themselves during the litigation" (emphasis added)); Lamb EngÂ’g & Constr. Co. v. Nebraska Pub. Power Dist., 103 F.3d 1422, 1437 (8th Cir. 1997) ("the district courtÂ’s inherent power to award attorneysÂ’ fees as a sanction for bad faith conduct does not extend to pre-litigation conduct").

Because we conclude the District Court did not abuse its discretion in determining that defendants acted in bad faith in their litigation conduct, we affirm the Court§ 54.171[2][c][iii] (3d ed. 1997) ("the requisite bad faith may be inferred from the absolute lack of merit in the litigantÂ’s actions").

Accordingly, we affirm.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

[1] The Honorable Andrew W. Bogue, United States District Judge for the District of South Dakota.

[2] Under the Miller Act, 40 U.S.C. §§ 270a-270b, a person who receives a federal public works contract must furnish to the United States a payment bond for the protection of both the United States and qualified individuals who have not been paid after furnishing labor and materials for the project. Persons asserting Miller Act claims must bring their claims in the name of the United States "for the use of" the person suing.

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