Special thanks for this article from Steven Schreckinger at Anderson Kreiger. Today is an article about coverage for an additional insured in what is a rare situation as the named insured is deemed without fault.
Harper Whitwell PLLC is a law firm which stands firm in its belief that the construction industry is the backbone of our economy. We strive to keep contractors compliant with state and federal regulatory requirements and advocate the prompt payment for services rendered. Like many other states, Mississippi allows for recovery of sums owed to contractors on non governmental projects via the mechanic’s lien. This article will focus on seven procedural formalities which place the burden on the contractor to follow as contractors and material supplier have rights “only to the extent that they have brought themselves within the terms of the statute.” Riley Blg. Suppliers, Inc. v. First Citizens Nat’l Bank, 510 So.2d 506, 508 (Miss.1987).
To discuss this or any other construction matter, please contact us today. The remainder of this article will focus on the 7 absolute requirements set forth by the mechanics lien statute.
1). A contractor must be in substantial compliance with its duties ..
The U.S. Occupational Safety and Health Administration’s (“OSHA”) new rule for respirable crystalline silica was finalized this past Summer, while compliance obligations under the new rule start on June 23, 2018.
The new silica rule reduces the permissible exposure level (PEL) for employees and creates many new requirements for businesses. Companies will be required to implement engineering and work practice controls which may be burdensome. With the new rule’s requirements for engineering and work practice controls, the economic impact to businesses could be harsh if preparations are not in place.
As the deadline approaches, your construction company should not delay preparation. The full text of the rule can be found here:
If a material supplier is not compensated for goods delivered properly to a construction site, there are remedies available.
Before suing on the bond, it is important to review all terms and conditions.
Certified Copy of Payment Bond
If a supplier of materials on a federal project has not been paid they can request a certified copy of a payment bond. The request must be accompanied with an affidavit which swears a) payment is due and unfulfilled or b) that the person is being sued on the bond.
Suit on Bond:
If a supplier has not been paid within 90 days of furnishing conforming and required materials, the supplier may bring a civil action on the payment bond covering the unpaid portion of his/her contract. If materials were actually used on another job, there are rights under the Miller Act but limited exceptions might apply.
A second-tier claimant has similar bond rights and must follow similar procedures.
In the United States District Court in which the contract was to..
Last week we briefly discussed the Miller Act and performance bonds. A payment bond is different from a performance bond in that it provides a form of collateral for unpaid subcontractors and material suppliers who provide labor and/ or materials on federal construction projects. Because these downstream subcontractors and material suppliers do not have lien rights on governmental projects, the payment bond works as a substitute for lien rights over real property. The payment bond effectively stands in place of the real property for purposes of security
The primary public policy purpose of the Miller Act payment bond is to replace the security normally provided by the lien right which attaches to real property. Instead of foreclosing on the mechanics lien, a claim or suit on the bond is made.
Our next discussion will focus on the Miller Act in South Carolina.
The Miller Act, 40 U.S.C. §§ 3131–3134, provides that, before any contract for the construction, alteration, or repair of any public building or public work of the United States of more than $150,000 (increased fris awarded to any person, that person (usually the general contractor) must furnish:
(1) A performance bond in an amount the contracting officer considers adequate for the protection of the United States;
The United States and federally created bodies such as GSA are the beneficiaries of the performance bond piece. If an awarded prime contractor defaults in the performance of its work or is terminated for cause, the United States may turn to the surety to step in and take over the general contractor’s obligations under the prime contract. Bond language allows the surety to bring another qualified entity to finish the work, at the surety’s expense on behalf of citizens.
The Miller Act is codified at 40 U.S.C. §§ 3131-3134. The Act requires a general contractor contracting with the federal government or a federal governmental entity for a construction project with a contract in excess of $100,000 to obtain both a performance bond and a payment bond.
The Miller Act’s primary function is to foster construction and development in the public sector, while protecting infrastructure and public projects from the potential lien rights of material suppliers and subcontractors.
Miller Act v. Mechanics Lien
When a subcontractor is not paid for labor or materials furnished to a prime contractor in a private construction contract, the aggrieved party is normaly able to seek recourse if not paid by taking out a mechanic’s lien against the property. However, the doctrine of sovereign immunity prohibits a lien being taken out against any public property, and this applies to construction contracts awarded by the federal government.
To afford subcontractors a form o..
What happens when one party to an arbitration no longer remains solvent, yet a successor entity remains viable, although not a party to an arbitration proceeding? Mississippi recently decided that a separate action could be brought in US District Court against the non-contracting successor entity which was not barred by judicial estoppel.
In 2009, RDS contracted with S&S Construction LLC to construct a building in Ocean Springs, Miss. The occupant, RDS, alleged there were problems with the roof leaking.
In 2011, contractor S&S Construction changed its name after being purchased by Abrams Group. It was a subject of some debate as to whether or not S&S was doing business under the new name or, alternatively, no longer in existence.
ARBITRATION ACTION AGAINST S&S
RDS, as owner of the building, brought suit against S&S Construction as well as the successor, Abrams. The suit was dismissed in favor of an arbitration clause and Abrams refused to consent, claiming it was not o..
I very recently joined my friends at Harper Whitwell PLLC as a partner in the firm’s new Charleston SC office. Harper Whitwell is based in Oxford, MS having been founded by James Harper and Quentin Whitwell. With the addition of Charleston, the firm now has enhanced geographical coverage to include Alabama, Mississippi, South Carolina, Tennessee and the District of Columbia.
The firm will continue to handle commercial litigation, employment claims, health care law, construction matters and general torts. The firm’s attorneys also provide consultation to a number of strategic industries including, but not limited to the following:
• Contract Negotiation
• Risk Mitigation
• General business consultation
Back in April, I reported to you a curious decision from California which applied the doctrine of strict liability to a contractor who merely applied, or installed, a defective or dangerous product…
Source: Update on California Strict Liability Decision