If you are a claimant (subcontractor, sub-subcontractor, or supplier) on a federal construction project, you need to preserve your Miller Act payment bond rights to the extent you are unpaid. This gives you the leverage to pursue your claim for nonpayment against a presumed solvent surety versus foregoing the surety and suing the contractor that either a) may not have the financial wherewithal to pay or b) may file for bankruptcy. Don’t make this mistake.
In a recent case, a subcontractor sued a contractor and recovered a judgment. However, the subcontractor could not collect on its judgment. (That’s no good!) The contractor then tried to create an argument to pursue the Miller Act payment bond surety. But guess what? The statute of limitations expired and the court held that the surety was not bound by the judgment against the contractor.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.