<META HTTP-EQUIV="Content-Type" CONTENT="text/html; charset=iso-8859-1">
<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta name=Generator content="Microsoft Word 12 (filtered medium)">
<style>
<!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
span.EmailStyle17
{mso-style-type:personal;
font-family:"Calibri","sans-serif";
color:windowtext;}
span.EmailStyle18
{mso-style-type:personal-reply;
font-family:"Calibri","sans-serif";
color:#1F497D;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page Section1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.Section1
{page:Section1;}
-->
</style>
<!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang=EN-US link=blue vlink=purple>
<div class=Section1>
<p class=MsoNormal><span style='color:#1F497D'>Hi Bruce, the answer should be
no. See the American Home v. Larkin decision. The performance bond is there
to guarantee construction only . . . .and nothing more.<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<div>
<p class=MsoNormal><span style='color:#1F497D'>Ty G. Thompson<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>Board Certified Construction
Attorney | Mills Paskert Divers<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>100 North Tampa Street, Suite
2010 | Tampa, Florida 33602<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'>813-769-4802 (direct) |
813-229-3500 (firm) | 813-229-3502 (facsimile)<o:p></o:p></span></p>
<p class=MsoNormal><span style='color:#1F497D'><a href="http://www.mpdlegal.com">www.mpdlegal.com</a> </span><span
style='color:#1F497D'><o:p></o:p></span></p>
</div>
<p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p>
<div>
<div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>
constructionlaw-bounces@lists.flabarrpptl.org
[mailto:constructionlaw-bounces@lists.flabarrpptl.org] <b>On Behalf Of </b>Bruce
Partington<br>
<b>Sent:</b> Wednesday, April 18, 2012 5:34 PM<br>
<b>To:</b> RPPTL constructionlaw<br>
<b>Subject:</b> [RPPTL-constructionlaw] Performance bond liability question<o:p></o:p></span></p>
</div>
</div>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Please reply directly to <a
href="mailto:bpartington@cphlaw.com">bpartington@cphlaw.com</a><o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Subcontractor provides performance bond on AIA A312 form
listing the GC as the “Owner” and the sub as the “Contractor.” The bond
defines “Contractor Default” as “failure of the Contractor . . . to perform or
otherwise to comply with the terms of the Construction Contract.” “Construction
Contract is a defined term broadly covering the “Agreement between the Owner
and the Contractor [so, here, the subcontract], . . . including all Contract
Documents and changes thereto.” <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>One of the obligations under the subcontract was to provide
certain liability insurance coverages. Apparently, those coverages were
not provided, and the absence of one or more of those coverages is going to
result in substantial liability to the GC. GC has made a claim on Sub’s
liability policy but the liability carrier has denied coverage and said go
away.<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>So, here’s the question – would the performance bond surety
be liable to GC for damages incurred because of the sub’s failure to provide
the contractually required insurance coverage? It would seem clearly to
be a “default” under the contract which is the subject of the bond, which would
trigger surety liability.<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal><i>Bruner and O’Connor</i> (§ 12.35, n. 6) point out this
issue but don’t indicate any resolution or settled (or unsettled)
principles. They cite two old cases (1965, 1941) which on review don’t
actually even address the question (I don’t know why they were even cited,
frankly). I’ve found no other cases in Florida or elsewhere on this point
yet, but have been looking for a while.<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Any thoughts?<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal>Thanks.<o:p></o:p></p>
<p class=MsoNormal><b><span style='font-size:13.5pt;color:#0000A0'><o:p> </o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:13.5pt;color:#0000A0'>Bruce D.
Partington</span></b><span style='font-size:10.0pt;color:black'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt'>Clark</span> <span
style='font-size:10.0pt'>Partington<span style='color:black'><o:p></o:p></span></span></p>
<p class=MsoNormal><a href="mailto:bpartington@cphlaw.com"
title="blocked::mailto:bpartington@cphlaw.com"><span style='font-size:10.0pt'>bpartington@cphlaw.com</span></a><span
style='font-size:10.0pt'><o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt'>Direct: 850-432-1399<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt'>Fax: 850-432-7340<o:p></o:p></span></p>
<p class=MsoNormal><i><span style='font-size:9.0pt'>*Board Certified in
Construction Law<o:p></o:p></span></i></p>
<p class=MsoNormal><span style='font-size:10.0pt'> <o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:7.5pt'>NOTICE: This e-mail message
and any attachments are private communication sent by the law firm of Clark
Partington Hart Larry Bond & Stackhouse, and may contain confidential,
legally privileged information meant solely for the intended recipient. If you
are not the intended recipient, you are hereby notified that any use,
dissemination, distribution or copying of this communication is strictly
prohibited. Please notify the sender immediately by replying to this message,
and delete the e-mail and any attachments from your system. Thank you.<o:p></o:p></span></p>
<p class=MsoNormal><o:p> </o:p></p>
</div>
</body>
</html>