University of Maryland Construction Law Update
Payment Bond Claims – Time is of the Essence
McNamee Hosea, P.A. Successfully Recovers $500,000.00 for Regional Supplier for work at University of Maryland Chemistry Building
Payment Bonds are required by project owners and more often these days by general contractors from their subcontractors when supplying materials and labor. The Payment Bond protects the owner or contractor from unpaid claims and possible mechanic’s liens, and are often required on government projects where the unpaid parties do not have the right to file a mechanic’s lien against the public land and improvements.
Subcontractors and suppliers can benefit from Payment Bonds if they act timely and comply with the bond’s notice requirements. Notice requirements typically include delivery of notice of the claim for unpaid materials and labor to the Bond’s principal (the general contractor or subcontractor providing the bond), and to the surety (the insurance company issuing the bond). Following notice, the surety will provide the principal time to rebut the bond claim or assert defenses.
If the surety determines factual or legal issues exist, the unpaid party will have to file suit against the principal and the surety typically in the venue where the project is located.
Recently, on a project at the University of Maryland Chemistry Building, following notice to the Payment Bond’s principal and its surety, the surety refused to pay McNamee Hosea’s client.
John Lynch and Greg Hislop filed suit in the Circuit Court of Prince George’s County and aggressively pursued the parties for the amounts owed to MH’s client. Upon the filing of a Motion for Summary Judgment and certain admissions obtained in discovery, the surety and principal agreed to resolve the claim and pay MH’s client $500,000.00.
McNamee Hosea has an experienced team of lawyers and paralegals that protect client’s rights in the District, Maryland and Virginia every day.
Contact us with any questions.
John P. Lynch
410-571-9906 (d)
jlynch@mhlawyers.com