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<div>Bruce/Ty</div>
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<div>I disagree - Larkin dealt with the old AIA A311 form that did not include coverage for delay or lds or latent defects </div>
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<div>The AIA A312 form does. I think the answer depends on the specific damage - if the damage is a latent defect and the A312 form was not changed, then yes bond is liable - but only for 5 year SOL. I dont think you can require the surety to provide a missing
completed ops coverage but for the 5 year SOL period your bond coverage should cover any damage/defect claims directly. </div>
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<div>May also want to look at the agent that issued an improper COI and perhaps pursue them </div>
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<div>Ed </div>
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Sent from my iPhone</div>
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On Apr 18, 2012, at 8:43 PM, "Ty G. Thompson" <<a href="mailto:tthompson@mpdlegal.com">tthompson@mpdlegal.com</a>> wrote:<br>
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<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>
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<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>
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<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"">
<a href="mailto:constructionlaw-bounces@lists.flabarrpptl.org">constructionlaw-bounces@lists.flabarrpptl.org</a> [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>
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<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.â€
<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>
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<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
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