Progress Glass Co. v. American Insurance Co

In Progress Glass Co. v. American Insurance Co. (1980) 100 Cal. App. 3d 720, the county agreed the bond obligation would be fulfilled by the general contractor's furnishing the payment bond, naming the county "'as an additional obligee of Lessee's principal and surety under such bond . . ..'" (Progress Glass Co. v. American Insurance Co., supra, 100 Cal. App. 3d at p. 722.) The general contractor executed the requisite payment bond. The subcontractor glass company was not paid in full for its labor and materials. It sued the general contractor and prevailed, but when the judgment remained unsatisfied, the subcontractor commenced an action against the insurer as surety on the payment bond. We find the court's analysis of private works versus public works pertinent here. Inter alia, the court noted Civil Code section 3096 defines the term "'payment bond'. . . for all purposes of title 15." (Progress Glass Co., Inc. v. American Insurance Co., supra, 100 Cal. App. 3d at p. 724.) Title 15 of the Civil Code, entitled "Works of Improvement," and commencing with section 3082 is generally referred to as the Mechanics' Lien Law. It provides for various remedies--liens, stop notices, and payment bonds--depending upon the circumstances. Chapter 6, entitled "Payment Bond for Private Works," includes Civil Code section 3239, which the Progress Glass court was required to construe. In relevant part, the Progress Glass court stated, "A chapter heading may not be used in aid of interpreting a code which includes a provision prohibiting this , but no such provision appears in the Civil Code. We may accordingly resort to the heading of chapter 6 "Payment Bond for Private Works" in construing its provisions, including section 3239. This means that 'any payment bond given pursuant to any of the provisions of this chapter,' as that term is used in section 3239, must first be a 'payment bond' given for a 'private work.'Defendant's bond is a 'payment bond' within the meaning of section 3096, which defines that term for all purposes of title 15. The title includes no definitions of 'private work,' or 'private work of improvement,' although the latter term appears in the title at least once. The terms 'public work' and 'work of improvement' are respectively defined in section 3100 (read in context with 3099) and in section 3106. The construction project to which plaintiff furnished labor and materials was a 'work of improvement' within the meaning of section 3106. It was therefore a 'work' for purposes of title 15 . . . .The construction project was agreed upon by the County in its lease of the motel site, and the County is a 'public entity' within the meaning of section 3099. However, it was not a party to the construction contract executed by the owners of the project and the general contractor. The project was therefore not a 'public work,' within the meaning of section 3100, because it was not 'contracted for by a public entity' within the same meaning. It being a 'private work' by elimination, defendants' bond was a 'payment bond' for a 'private work' for purposes of section 3239 and the other provisions of chapter 6." (Progress Glass Co. v. American Insurance Co., supra, 100 Cal. App. 3d at pp. 726-727.)