There are instances in a Miller Act payment bond lawsuit where the prime contractor, or principal of the payment bond, is not sued. Instead, just the Miller Act payment bond surety is sued in an action on the payment bond. In such instances, the prime contractor may consider moving to intervene as a defendant in the lawsuit as the principal of the payment bond. For example, if the prime contractor wants to assert a counterclaim or a third-party claim, it should consider moving to intervene in the lawsuit. Or, if for whatever reason, the payment bond surety retains separate counsel to defend it, the prime contractor should consider moving to intervene with its preferred counsel.
In a recent case, the prime contractor’s Miller Act payment bond surety was sued by a sub-subcontractor. The prime contractor was not sued. The prime contractor moved to intervene as the principal of the payment bond in order to assert a counterclaim against the sub-subcontractor for negligence and a third-party claim against its subcontractor (that hired the sub-subcontractor) for breach of contract and negligence. The court allowed the prime contractor to intervene; it made sense for purposes of efficiency and judicial economy.
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