[RPPTL-constructionlaw] Public Project Bond and SOL
Greg Elliott
gelliott at elliott-berger.com
Thu Apr 19 07:21:10 PDT 2012
public work (255.05 or 337.18 bond), or private work (713.23 or 24)?
Gregory T. Elliott
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On 4/19/2012 9:57 AM, Tracye wrote:
>
> Does anyone know of a case that would estop a surety from relying on
> the SOL to defeat a subcontractor claim when it denied (in writing)
> that a bond was in place during the SOL period?
>
> Logo
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> Tracye K. Solove, Attorney at Law
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> *From:*constructionlaw-bounces at lists.flabarrpptl.org
> [mailto:constructionlaw-bounces at lists.flabarrpptl.org] *On Behalf Of
> *Bruce Partington
> *Sent:* Thursday, April 19, 2012 9:31 AM
> *To:* RPPTL constructionlaw
> *Subject:* [RPPTL-constructionlaw] FW: Bond coverage
>
> *From:*Gibbons, Michael [mailto:Michael.Gibbons at lowndes-law.com]
> *Sent:* Wednesday, April 18, 2012 6:36 PM
> *To:* Bruce Partington
> *Subject:* Bond coverage
>
> Good question Bruce. My thoughts:
>
> 1. Take a look at Phoenix Indemnity v. Board of Public
> Instruction of Alachua County, 114 So. 2d 478 (Fla. 1st DCA 1959).
> The Phoenix Indemnity court held that the contractor's surety bond was
> liable for payment of insurance premiums not paid by contractor
> despite contractor having an express contractual obligation to make
> the premium payments. Not exactly your claim but close and certainly
> gets at the obvious issue that your claim is not for completion of the
> bricks and mortar (which every surety lawyer wants to limit the surety
> bond coverage to).
>
> 2. Is there an issue of who suffered the damage and the operation
> of the mutual waiver of subrogation clauses doubtlessly present in the
> contracts at issue? Could not tell in your summary but I believe this
> may be an issue. If the GC had insurance coverage for the claim
> (which it sounds like) and would simply like to have the sub's policy
> be primary on the loss, then there may be an issue with actual damages
> suffered by GC (given the presence of insurance). Also, if the loss
> falls on the carrier, depending on the operation and breadth of the
> mutual waiver of subro language, there may not be any subrogation
> rights arising out of the loss (especially a property loss).
>
> 3. Is there an issue re operation of a mutual waiver of
> consequential damages provision in the incorporated subcontract
> (either directly or by reference or incorporation of the prime
> contract documents)? Not clear whether the category of damages being
> claimed would fall into the "consequential damages" bucket but it
> sounds like that might be the case.
>
> 4. The AIA A 312 bond form is broad in scope and contains some
> favorable language for the obligee. Without knowing all the facts, it
> sounds like there may be a colorable claim if some of the above raised
> concerns are addressed (as well as others which I have failed to
> identify).
>
> Good luck.
>
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