Payment Bonds

News & Analysis as of

(US) Payment and Performance Bonds vs Completion Bonds. What’s Best for Your Project?

Several types of bonds exist in the development world. So, which type of bond is best for your project? A payment and performance bond is a combination instrument. It’s first a payment bond that guarantees that the...more

Builders' lien trusts in a bankruptcy - Iona Contractors Ltd v Guarantee Company of North America, 2015 ABCA 240

In 2009, the Calgary Airport Authority (CAA) entered into a construction agreement with Iona Contractors Ltd. for Iona to improve CAA’s north airfield. By October 2010, the work was substantially complete; however CAA...more

Federal Court in Oklahoma Rules that Bond Issued on a Sovereign Tribal Construction Project is Not a Miller Act Bond Even Though...

United States ex rel. J.A. Manning Constr. Co. v. Bronze Oak, 2017 U.S. Dist. LEXIS 6054 (N.D. Okla. Jan. 17, 2017) - In May 2014 the Cherokee Nation issued a bid notice for bridge and roadway construction in Mayes...more

Coming Down the Pipeline: Mitigating the Payment Risk in Oil and Gas Construction Through Lien Claims

Since 2015, the oil and gas market has experienced significant distress. Recent reports have tracked at least 114 North American oil and gas producers and 16 midstream companies that have filed for bankruptcy since the...more

Fraud and Performance Securities

Performance securities are an everyday feature of construction and engineering projects. It is increasingly common to see calls on performance securities challenged on the basis of "fraud". Two recent cases from the English...more

Under Construction - December 2016

Welcome to the winter 2016 edition of our Under Construction newsletter. We hope your year has been good to your family, your company and you as we wrap up these remaining few weeks of 2016. A recent hot topic with...more

Another Year, Another Set of Laws: What California Employers Should Know

In keeping with California’s reputation of being an employee-friendly state, Governor Brown has enacted a number of laws, most of which go into effect on January 1, 2017 (unless specified otherwise below), that place...more

Leaning In – Pennsylvania Refining the Mechanic’s Lien Law

Pennsylvania has continued to refine its mechanic’s lien law in recent years, and next year will bring the most sweeping changes ever for owners and contractors that work on larger projects....more

Appellate Panel forces Developer to Pay Up for Lost Terrace

The Appellate Division, First Department decision in DDG Warren LLC v Assouline Ritz 1, LLC 2016 NY Slip Op 02926 adds another brick in the wall of Real Property Actions and Proceedings Law (“RPAPL 881”) cases requiring...more

Construction Bond Basics

There are three types of bonds that afford financial protection in connection with a construction project: payment bonds, Cranesperformance bonds, and bid bonds. Below is a primer on the differences between these bonds and...more

Changes Loom for Public Works Projects and Payment Bond Claims in Pending Connecticut Legislation

A recently proposed bill to reduce the retainage amount for certain public work contracts to five percent and to allow a claimant to recover reasonable attorney’s fees and costs from a payment bond surety that fails to timely...more

Why Is California’s Derivative Suit Statute Stuck In 1977?

California Corporations Code Section 800 governs derivative suits brought by both domestic and foreign corporations. The statute provides a modicum of protection to defendants by establishing a procedure by which either the...more

Miller Time: Where to File a Miller Act Suit Arising on an Overseas Project?

Subcontractors filing Miller Act lawsuits in the U.S. must generally do so in the federal district court where the contract from which the dispute arose was “performed and executed.” 40 USC §§ 3131-3134 However, on...more

New Georgia Statute on Bad Faith Patent Cases May Discourage Both Weak and Strong Cases from Being Brought in Georgia

Plaintiff Walter Farmer (“Farmer”) initiated suit in September 2014 asserting infringement of claim 1 of his U.S. Patent No. 7,362,007 (the “’007 Patent”), issued April 22, 2008, and covering uninterruptable power supply...more

Federal District Court in California Holds that Subcontract Provision Binding Subcontractor to Result of Dispute Resolution under...

DVBE Trucking and Construction Co., Inc. v. McCarthy Building Companies, Inc., 2015 U.S. Dist. LEXIS 90052 (N.D. Cal. July 10, 2015) - This payment dispute case arises out of a Veterans Affairs (“VA”) construction...more

Barbarians at the (marble)gate?

Restructurings are all about alternatives. It is one thing for a creditor to hold an instrument that entitles it to payment of $X on Y date. But if the debtor does not have the cash to satisfy the obligation when due, some...more

A Brief Look At Common Construction Loan Credit Enhancements

As the competition for construction loan projects remains at unprecedented levels in much of the country, lenders are frequently being asked to waive, modify or re-visit their standard construction loan credit enhancement...more

Construction Bonds and Subguard Insurance

In virtually all public projects (and in many private projects), the owner requires the general contractor to post a performance bond and a payment bond. Recently, in some cases, general contractors have obtained...more

Arizona Court of Appeals Interprets Stricter Requirements for Payment Bond Claimants

Arizona has long protected the rights of subcontractors and material suppliers to seek recovery from the payment bond surety on public bonded projects. Arizona’s Little Miller Act, A.R.S. § 34-223, provides that claimants...more

Under Construction - June 2015

Letter from the Editor - Welcome to the summer edition of our Under Construction newsletter. In this issue, we highlight several hot topic items affecting the construction industry such as what happens when the...more

No Bond for You: Patentee Not Entitled to Bond or Preliminary Injunction While Case Stayed Pending IPR

Order Granting Motion to Stay, Security People, Inc. v. Ojmar US, LLC, 14-cv-04968 (Judge Haywood Gilliam Jr.) - A recent opinion analyzes what relief, if any, a patentee is entitled to when its District Court case is...more

Texas Supreme Court Limits Amount Of Supersedeas Bond In Decision With Possible Implications For Cases In Which Punitive Damages...

One of the biggest challenges confronting a defendant that has lost a large judgment is the need to file a supersedeas bond in order to prevent execution on the judgment during the pendency of the appeal. There are good...more

Court Dismisses Case For No Diversity Jurisdiction 2 Days After Filing

In an unusual display of speedy discretion, federal District Judge Sheri Polster Chappell wasted no time in dismissing the complaint on a public works payment bond filed by Advance Industrial Coating, LLC in Advance Indus....more

Utah Federal Court Stays Proceedings Under Miller Act Pending Arbitration

The core issue facing a federal court in Utah was whether it should stay the proceedings pending resolution of related arbitration proceedings involving sureties which issued payment bonds under the Miller Act. A dispute...more

Construction Case Law Update - January, 2015

FLORIDA STATE CASES - Slavin Doctrine; Design Contracts - Under the Slavin doctrine, a subcontractor design company was not liable despite negligently designing intersection traffic lights that resulted in a fatal car...more

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