{"id":903904,"date":"2025-01-30T16:01:04","date_gmt":"2025-01-30T23:01:04","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903904"},"modified":"2025-01-30T16:01:08","modified_gmt":"2025-01-30T23:01:08","slug":"bond-claims-maximizing-recovery-on-construction-claims","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/bond-claims-maximizing-recovery-on-construction-claims\/","title":{"rendered":"Maximizing Recovery on Construction Claims: Don\u2019t Forget Bond Claims, Which Could Exceed the Underlying Claim!"},"content":{"rendered":"\n

John Mark Goodman | Bradley<\/a><\/p>\n\n\n\n

As construction claim lawyers, we are always on the lookout for insurance policies or \u201cbonds\u201d that might satisfy our client\u2019s claim. On federal projects, this includes performance and payment bonds known as Miller<\/em> Act bonds. These bonds, which take their name from the federal Miller Act that requires them on all federal contracts over $100,000, protect the government and subcontractors if the contractor defaults. In that situation, subcontractors who are owed money can sue both the defaulting contractor and the insurance company or \u201csurety\u201d who issued the Miller Act payment bond. The surety effectively \u201csteps into the shoes\u201d of the defaulting contractor and becomes liable for the contractor\u2019s debt. In some cases, the surety can actually become liable for more<\/em> than the contractor\u2019s debt. <\/p>\n\n\n\n

That\u2019s what happened in an unpublished opinion released earlier this month by the U.S. Court of Appeals for the DC Circuit in a case styled United States of America, for the use and benefit of American Civil Construction, LLC v. Hirani Engineering & Land Surveying and Colonial Surety Company<\/em>, 2025 WL 88664 (D.C. Cir. Jan. 14, 20215). That case involved a U.S. Army Corps of Engineers project to construct a levee flood wall in Washington, D.C. As with many projects that become cases, the job was plagued by \u201cdelays, unexpected modifications and technical snafus.\u201d After the Corps of Engineers terminated the prime contractor for default, one of the subcontractors filed suit against the contractor and its surety to recover for unpaid work.<\/p>\n\n\n\n

As to the contractor, the trial court found that the subcontractor\u2019s claim was capped by the contract price under D.C. law. As a result, the subcontractor was awarded a judgment against the contractor in the amount of only $568,000. As to the surety, however, the trial court held that the subcontractor\u2019s claim was not capped by the amount remaining on the contract. Rather, as to the surety, the subcontractor was entitled to equitable relief under a quantum merit theory for the full reasonable value of its services. Under that theory, the trial court awarded the subcontractor nearly $2.6 million against the surety, roughly 5 times the amount awarded against the contractor<\/em>. On appeal, the D.C. Circuit rejected the surety\u2019s objection to differing awards:<\/p>\n\n\n\n

\n

[Q]uantum meruit <\/em>damages against the surety under the Miller Act can exceed expectation damages against the prime contractor under D.C. law for the same construction project.  That is because the Miller Act provides protection beyond what ordinary contract law affords, requiring payment bonds on federal government contracts and entitling subcontractors to recover the full value of their services and materials, including those resulting from delays not contemplated under the written contract.<\/p>\n<\/blockquote>\n\n\n\n

The case is a good reminder to watch for insurance policies or bond<\/a>s that may satisfy a recovery, and to consider alternative theories that could maximize recovery. A copy of the court\u2019s decision is available\u00a0here<\/a>.<\/p>\n\n\n\n

Republished with permission. The article, \u201cMaximizing Recovery on Construction Claims: Don\u2019t Forget Bond Claims, Which Could Exceed the Underlying Claim!<\/a>\u201d was originally published on BuildSmart by Bradley Arant Boult Cummings LLP. Copyright 2025.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

John Mark Goodman | Bradley As construction claim lawyers, we are always on the lookout for insurance policies or \u201cbonds\u201d that might satisfy our client\u2019s claim. On federal projects, this includes performance and payment bonds known as Miller Act bonds. These bonds, which take their name from the federal Miller Act that requires them on all federal contracts… Continue reading Maximizing Recovery on Construction Claims: Don\u2019t Forget Bond Claims, Which Could Exceed the Underlying Claim!<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[11015],"tags":[9895,11426,188],"class_list":["post-903904","post","type-post","status-publish","format-standard","hentry","category-construction-claims","tag-advise-consult","tag-bond-claims","tag-construction-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nMaximizing Recovery on Construction Claims: Don\u2019t Forget Bond Claims, Which Could Exceed the Underlying Claim! 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