Bond Claims

ACTION AGAINST LIEN TRANSFER BOND MUST BE BROUGHT WITHIN ONE YEAR OF TRANSFER – IF LIEN IS TRANSFERRED DURING PENDENCY OF LIEN FORECLOSURE ACTION

By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, LLC Florida Statute, Section 713.24 governs the transfer of construction liens to security. Pursuant to this statute, any person with an interest in the real property upon which a lien is imposed can transfer the lien to other security by either depositing in the clerk’s office […]

MILLER ACT BONDS: EQUAL PROTECTION FOR SUBCONTRACTORS AND SUPPLIERS ON A FEDERAL PROJECT

By: Stearns, Roberts & Guttentag, LLC Federally owned property is exempt from liens that normally protect subcontractors, suppliers and laborers from nonpayment. As such the Miller Act, Title 40 § U.S.C. 3131, was designed to protect subcontractors and suppliers providing labor and materials to a Federal project, and requires contractors to post a bond to […]

CONTRACTOR’S LACK OF EVIDENCE OF SUBCONTRACTOR’S DELAY PRECLUDES CONTRACTOR FROM WITHHOLDING PAYMENT FROM SUBCONTRACTOR

By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, LLC Before any contract of more than $100,000.00 is awarded for the construction, alteration or repair of any public building or public work of the Federal Government, a payment bond must be furnished to the Government, which becomes binding when the contract is awarded. Such bond […]

COURT STAYS CLAIM AGAINST PAYMENT BOND PENDING RESOLUTION OF ARBITRATION PROCEEDING BETWEEN SUBCONTRACTOR AND GENERAL CONTRACTOR

By: Richard E. Guttentag, Esq. and Alexander S. Beck, Esq., Stearns, Roberts & Guttentag, LLC Florida courts have discretion to stay (i.e. suspend) a civil action between a subcontractor and surety involving a claim against a payment bond pending the resolution of an arbitration proceeding between the same subcontractor and a general contractor arising out […]

PAYMENT BOND CLAIMS AND PREVAILING PARTY ATTORNEY’S FEES

By: Douglas J. Roberts, Esq. and Alex Beck, Esq., Stearns, Roberts & Guttentag, LLC When evaluating a potential construction payment bond claim, claimants should not only consider the potential likelihood of success, but also the amount of attorney’s fees that all parties to the suit will incur as result of the litigation.  Under Florida law1, […]

SURETIES’ RIGHTS UNDER GENERAL INDEMNITY AGREEMENTS

By: Richard E. Guttentag, Esq. and Alexander S. Beck, Esq., Stearns, Roberts & Guttentag, LLC Prior to issuing payment or performance bonds, it is common for sureties to require contractors or subcontractors seeking bonding to execute a general indemnity agreement (“indemnity agreement”). In addition to the contractor entity executing the indemnity agreement, sureties generally require […]

COURT RULES THAT A SURETY’S LIABILITY UNDER A PERFORMANCE BOND IS CAPPED BY THE BOND’S PENAL SUM

By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, LLC In Allegheny Casualty Co. v. Archer-Western/Demaria Joint Venture III, 2014 WL 4162787, the court ruled that a surety’s liability under a performance bond is generally limited to the penal sum of the bond, particularly where a surety limits its liability in the contract under which […]

FAILURE TO DISCLOSE SUBCONTRACTOR’S UNDERBIDDING OF PROJECT TO SURETY EXPOSES CONTRACTOR TO LIABILITY FOR FRAUDULENT MISREPRESENTATION

By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, LLC As previously reported, the case of Allegheny Cas. Co. v. Archer-Western/Demaria Joint Venture III, 2014 WL 4162787 (M.D. Fla. August 21, 2014), involved a dispute between a General Contractor (“Contractor”) and a performance bond Surety (“Surety”) on a construction project.  In addition to the court’s […]