When is a supplier a subcontractor?

In Eggers Industries v. Flintco, Inc., (2011) the Court found a new interpretation of who is a subcontractor and significantly altered the long standing view that a supplier to a supplier generally does not have lien rights.  In Eggers, Flintco, the prime contractor for the Robert Mondavi Institute for Wine and Food Science at UC Davis, hired Architectural Security Products (“ASP”- a supplier) to furnish several hundred custom architectural wood doors.  ASP hired Eggers (a supplier) to manufacture the doors.  Flintco paid ASP who failed to pay Eggers, who served a Preliminary Notice and filed suit against ASP and against Flintco and the on the Payment Bond.

The Court concluded that one who contracts with a prime contractor is a “subcontractor” where it “agrees with the prime contractor to perform a substantial specified portion of the work of construction which is the subject of the general contract in accord with the plans and specifications by which the prime contractor is bound,” regardless of whether it actually constructs any part of the project, onsite or offsite.

ASP was deemed a “subcontractor”, rather than a materialman, because it agreed to furnish the manufactured custom doors in accordance with the architect’s plans and specifications. As such, ASP was “in charge” of the scope of work was a subcontractor under Civil Code §3248 and a proper claimant on the Payment Bond.