Suing a Lien Transfer Bond in County where Bond is Posted

Previously, I discussed the venue to sue on a payment bond.

What about the venue to sue on a lien transfer bond (which is a bond posted in order to transfer a construction lien from the real property to the bond)?

A lawsuit against a lien transfer bond needs to be initiated in the county where the lien transfer bond is posted. This makes sense because the bond will be posted in the county where the underlying construction lien is recorded.

What if there is a contract that contains a venue provision different from the venue where the lien transfer bond is posted? The action on the lien transfer bond still must be brought in the county where the bond is posted and the action on the contract should be brought in that same county (instead of the county per the contract’s venue provision).

For example, a subcontractor records a construction lien on a project to secure nonpayment. The general contractor transfers that construction lien to a lien transfer bond in the county where the lien is recorded. The subcontractor wants to sue the general contractor but the subcontract has a venue provision different from where the lien transfer bond was posted. This should not matter as the subcontractor must sue on the lien transfer bond in the county where the bond is posted; thus, the subcontractor’s breach of contract claim should be brought in that same county to avoid duplicative lawsuits and inconsistent rulings on the same subject matter.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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