Florida Construction Law

In U.S. for the use of Postel Erection Group, L.L.C. v. Travelers Casualty and Surety  Company of America , Case No. 6:12-cv-182 (M.D. Fla. June 28, 2012) a second-tier  subcontractor sued the sureties on the prime contractor’s Miller Act payment bond. The  first tier subcontractor was engaged in arbitration with the prime contractor, and the  sureties moved to stay the Miller Act suit pending the outcome of the arbitration. The  court granted the sureties’ motion based on its inherent power to control its docket and  the interests of judicial economy. The court noted that there was a “murky” but close  relationship between the first tier subcontractor and the claimant but did not depend on  that relationship in granting the motion.  (from RPPTL Surety and Insurance Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 (813) 579-3278 www.trentcot...

"In U.S. for the use of Capital Computer Group, LLC v. The Gray Insurance Co. , Case No. 10-15519 (11th Cir. December 21, 2011) the claimant alleged that it was an unpaid first tier subcontractor on a Miller Act project. The prime contractor had approached another contractor (Code 4 Systems, Inc.) about the work, but Code 4 could not qualify for financing. Code 4 and the claimant then arranged for the claimant to enter  into the “subcontract” and sub-subcontract the work to Code 4. The claimant financed the work via a factoring arrangement. The work had been performed and the prime contractor had not paid for it, but the surety argued that the claimant was simply providing financing and thus was not within the coverage of the Miller Act payment bond. The Court looked to the subcontract, which obligated the claimant to perform the work including maintaining insurance for the prime contractor’s benefit and indemnifying the prime c...

In U.S. for the use of McAllister Construction Co., LLC v. Diversified Maintenance Systems Inc ., 2011 WL 6112903 (N.D. Fla. 2011) a subcontractor on a federal project sued the Miller Act surety for the prime contractor, and the contractor intervened. The subcontract included an arbitration provision requiring that all disputes be settled by arbitration in Utah. The prime contractor demanded arbitration, but the subcontractor did not participate in the arbitration and claimed that it was invalid. The intervening prime contractor and surety moved for summary judgment. The subcontractor argued that by intervening in the Miller Act suit the prime contractor waived the right to have the dispute resolved by arbitration. The court noted that the petition to intervene cited the arbitration provision and sought to enforce it. The court rejected the subcontractor’s waiver argument, granted the motions, and dismissed the case with prejudi...

Under a Miller Act payment bond, all first and second tier subcontractors and suppliers are entitled to  make a claim for payment. However, third tier subcontractors and suppliers are not entitled to make a claim on the bond.   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Section 207b(b) of the Miller Act states that suit shall be brought in the name of the United States, for the use of the claimant, in the US District Court "for any district in which the contract was to be performed and executed and not elsewhere, irrespective of the amount in controversy in such suit."   Trenton H. Cotney Florida Bar Certified in Construction Law www.trentcotney.com

In Fisk Electric Co. v. Travelers Casualty and Surety Co ., 2009 WL 196032 (S.D. Fla. 2009), the Court held that a subcontractor could pursue delay damages against a surety based on a private payment bond.  The Court reasoned that the language of the private bond was simliar to a Miller Act bond and that language would allow the subcontractor to pursue delay damges. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com