Ok, so you have a Miller Act payment bond claim. Now what?
In order to sue on a Miller Act payment bond claim, you must file the lawsuit in the name of the Unite States for the use and benefit of YOU and sue in a federal district court. Typically, you sue in the federal district where the construction project is located. However, there is the argument that you can file a Miller Act payment bond claim, or that claim can be transferred, in accordance with the mandatory venue provision in a subcontract.
For instance, a subcontractor filed a Miller Act payment bond lawsuit against the payment bond surety and prime contractor in the federal district court where the project was located. The surety and prime contractor moved to transfer the venue to the venue set forth in the venue provision in the subcontract. The court agreed and transferred venue.
If you are a subcontractor, keep in mind that the Miller Act payment bond claim must be filed in a federal district court. Venue is either where the project is located or per the venue provision in the subcontract. If you don’t like the subcontract’s venue provision, the best bet is not to sue the prime contractor and only sue the surety (since you don’t have a subcontract with the surety) in order to best combat a potential motion to transfer venue.
If you are a prime contractor, include language in the subcontract that the Miller Act payment bond surety is an intended third party beneficiary of the venue provision and can enforce the venue provision in the subcontract. In other words, include language that allows you to try to transfer venue to the venue included in the subcontract in the event only the Miller Act payment bond surety is sued in the lawsuit.
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.