Surety Bond Quarterly - Summer 2015 - 18

50-State Survey on Public Owner Liability to Subcontractors and Suppliers for
ALABAMA
*None
**Medical Clinic Bd. v. Smelley,
408 So. 2d 1203, 1981 (Ala.
1981) (public agency liable for
subcontractor's payment claim
for failing to require payment
bond).
ALASKA
*None
**Imperial Mfg. Ice Cold
Coolers, Inc. v. Shannon,
101 P.3d 627, 632 (Alaska
2004) (subcontractor could
not sue school district for
failing to ensure that bonding
requirements of Little Miller Act
were met).
ARIZONA
*None
**Flori Corp. v. Yellow Rose
Dev. & Constr., Inc., 911 P.2d
546 (Ariz. Ct. App. 1995)
(city not liable to unpaid
subcontractors for failing to
ensure that payment bond from
viable surety remained in place
for life of the project).
ARKANSAS
*None
**Blanchard v. Burns, 162
S.W. 63 (Ark. 1913) (directors
of school district could not be
held liable to subcontractor
for failing to require payment
bond).
CALIFORNIA
*None
**Walt Rankin & Assocs. v. City
of Murieta, 84 Cal. App. 4th
605 (2000) (municipality has a
mandatory duty to ensure that
the payment bond posted by a
prime contractor is issued by
a sufficient admitted surety
licensed in California and,
in failing to do so, becomes
liable for claims of unpaid
subcontractors).
COLORADO
*None
**Newt Olson Lumber Co.
v. School Dist., 83 Colo. 272
(1928) (school district not liable
to subcontractor for failing to
require payment bond).
CONNECTICUT
*Conn. Gen. Stat. § 49-41
(d) (political subdivision of
the state liable for payment
of subcontractor claims for
failure to require contractor
to post bond; only applies to

municipalities and does not
apply to claims against the
State).
**York Hill Trap Rock Quarry
Co. v. Conn-Strux, Inc., 2012
Conn. Super. LEXIS 375 (Feb.
10, 2012) (statute applies only
to municipalities; does not
waive the state's sovereign
immunity).

ILLINOIS
*None
**Western Waterproofing Co.
v. Springfield Hous. Auth., 669
F. Supp. 901, 902 (C.D. Ill. 1987)
(subcontractor successfully
sued public entity for failure to
require prime contractor to post
required payment bond, on a
third-party beneficiary theory).

DELAWARE
*None
**None

INDIANA
*None
**None

FLORIDA
*None
**Palm Beach County v. Trinity
Indus., 661 So. 2d 942 (Fla. Dist.
Ct. App. 1995) (bonding statute
interpreted to impose implied
obligation on public entity
to ensure compliance with
contractor's bond requirement;
county directly liable for
payment of subcontractor due
to its failure to require a bond).

IOWA
*None
**Star Equip., Ltd. v. State,
843 N.W.2d 446 (Iowa 2014)
(when public entity waives
bonding requirement for
small businesses, unpaid
subcontractors can, in the
absence of a payment bond,
recover directly against the
public entity).

GEORGIA
*Ga. Code Ann. § 13-10-61
(public entity liable for payment
of unpaid subcontractors in
the event that it fails to ensure
that general contractor posts
required bond).
**City of Atlanta v. United Elec.
Co., 414 S.E.2d 251 (Ga. Ct.
App. 1991) (City of Atlanta has
been held liable to an unpaid
subcontractor for failing to
require a payment bond from a
general contractor, as provided
by statute).
HAWAII
*None
**None
IDAHO
*Idaho Code Ann. § 54-1928
(any public body subject to
the act that fails or neglects to
obtain the required payment
bond must, upon demand, itself
promptly make payment to all
persons who supplied materials
or performed labor in the
prosecution of the work under
the contract).
**H-K Contractors v. Firth, 101
Idaho 224 (1979) (court affirmed
summary judgment in favor of
subcontractor's claim against
city for failure to require prime
contractor to post payment
bond).

are issued by a sufficient surety that
is licensed in California and, in failing to do so, becomes liable for the
claims of unpaid subcontractors. In
Rankin, a city awarded a contract
for the construction of a playground
to a general contractor that posted
a payment bond issued by a Turks
and Caicos company not licensed
as a surety in California. When the

18

KANSAS
*None
**Freeman v. Chanute, 63 Kan.
573, 578 (1901) (public entity
cannot be sued by unpaid
subcontractor for failure to
require bond).
KENTUCKY
*None
**None
LOUISIANA
*None
**None
MAINE
*None
**None
MARYLAND
*None
**Bd. of Educ. v. Alcrymat
Corp. of America, 258 Md.
508 (1970) (school board
protected by doctrine of
sovereign immunity from
subcontractor's suit for failure
to require payment bond).
MASSACHUSETTS
*None
**None
MICHIGAN
*None
**ABC Supply Co. v. City of
River Rouge, 216 Mich. App.
396 (1996) (public entity cannot
be sued by subcontractor
for failing to require bond or
failing to ensure bond remains
in place, but if public entity

general contractor defaulted on its
payment obligations to a subcontractor, the subcontractor asserted a
payment bond claim. Unfortunately,
shortly after issuing the bond for the
project, the president of the surety
was indicted, the surety vacated its
offices, and its assets were unknown
or nonexistent at the time of the lawsuit. The subcontractor then brought

SURETY BOND QUARTERLY | SUMMER 2015

furnishes subcontractor with a
certified copy, it is liable to the
subcontractor if the bond later
is determined to be invalid).
MINNESOTA
*Minn. Stat. § 574.29 (public
body liable for payment of
subcontractors if it fails to
require contractor to post
payment bond).
**Green Elec. Sys., Inc. v.
Metro. Airports Comm'n,
486 N.W.2d 819 (Minn. Ct.
App. 1992) (Metropolitan
Airport Commission liable
to subcontractor for failure
to require payment bond if
subcontractor can establish
that general contractor was
insolvent and unable to pay
subcontractor for its work).
MISSISSIPPI
*None
**Mississippi State Bldg.
Comm'n v. S & S Moving, Inc.,
475 So. 2d 159 (Miss. 1985)
(when state failed to require
contractor to post bond as
called for in contract, unpaid
subcontractors could maintain
action for payment directly
against state when contractor
became insolvent; by entering
into contract the state waived
sovereign immunity); but see
Pidgeon Thomas Iron Co.
v. Leflore County, 135 Miss.
155 (1924) (subcontractor's
negligence claim against public
entity for failure to require
payment bond barred by the
doctrine of sovereign immunity).
MISSOURI
*Mo. Rev. Stat. § 107.170 (all
public entities have a duty to
ensure that the required bonds
are posted; permits public
entities to indemnify any of its
officers and employees from
personal liability for failure to
comply with the statute).
**Union Pac. R.R. v. St. Louis
Marketplace, 212 F.3d 386
(8th Cir. 2000) (Mo.) (unpaid
contractor could maintain action
against city as well as individual
city officials personally for
failing to require developer to
post required bonds).
MONTANA
*Mont. Code Ann. § 18-2-202
(public entity liable for payment
of subcontractors if it fails to
ensure required payment bond

suit against the city for negligently
failing to require a bond posted by
a sufficient surety. The court found
an implied obligation on the part of
the public owner to investigate and
verify the sufficiency of the surety,
despite the lack of an express statutory obligation to do so. In the aftermath of this decision, the legislature
passed a statute, Cal. Code Civ. Proc.



Table of Contents for the Digital Edition of Surety Bond Quarterly - Summer 2015

NASBP Upcoming Meetings & Events
2015-2016 NASBP Executive Committee
From the CEO - There is Poetry in Surety Claims, Surely
Practical Insights: What You Need to Know - Hiding in Plain Sight: Specifications as a Source of Risk
Profile: President Susan Hecker
Developing Your Leadership Vision
Liability Issues - Can Public Owners be Held Liable to Subcontractors and Suppliers for Failure to Require General Contractors to Obtain Required Payment Bond?
An Introduction to Probate Bonds
Class Act - Surety Team’s Cooperative Efforts Enable School to Open on Time
NASBP’s Attorney Advisory Council - Participants Opine on Current Risk Management Challenges and Business Opportunities
The AIA Describes Updated and Expanded Design-Build Documents Family
Contractor Practices That may Result in Construction Claims to Recover for Delays and increased Costs
NASBP Annual Meeting Speakers - Veterans can benefit private sector, but need help finding jobs
Index to Advertisers
Surety Bond Quarterly - Summer 2015 - cover1
Surety Bond Quarterly - Summer 2015 - cover2
Surety Bond Quarterly - Summer 2015 - 3
Surety Bond Quarterly - Summer 2015 - 4
Surety Bond Quarterly - Summer 2015 - 5
Surety Bond Quarterly - Summer 2015 - 6
Surety Bond Quarterly - Summer 2015 - 2015-2016 NASBP Executive Committee
Surety Bond Quarterly - Summer 2015 - From the CEO - There is Poetry in Surety Claims, Surely
Surety Bond Quarterly - Summer 2015 - 9
Surety Bond Quarterly - Summer 2015 - Practical Insights: What You Need to Know - Hiding in Plain Sight: Specifications as a Source of Risk
Surety Bond Quarterly - Summer 2015 - 11
Surety Bond Quarterly - Summer 2015 - Profile: President Susan Hecker
Surety Bond Quarterly - Summer 2015 - 13
Surety Bond Quarterly - Summer 2015 - Developing Your Leadership Vision
Surety Bond Quarterly - Summer 2015 - 15
Surety Bond Quarterly - Summer 2015 - Liability Issues - Can Public Owners be Held Liable to Subcontractors and Suppliers for Failure to Require General Contractors to Obtain Required Payment Bond?
Surety Bond Quarterly - Summer 2015 - 17
Surety Bond Quarterly - Summer 2015 - 18
Surety Bond Quarterly - Summer 2015 - 19
Surety Bond Quarterly - Summer 2015 - 20
Surety Bond Quarterly - Summer 2015 - 21
Surety Bond Quarterly - Summer 2015 - An Introduction to Probate Bonds
Surety Bond Quarterly - Summer 2015 - 23
Surety Bond Quarterly - Summer 2015 - 24
Surety Bond Quarterly - Summer 2015 - 25
Surety Bond Quarterly - Summer 2015 - 26
Surety Bond Quarterly - Summer 2015 - Class Act - Surety Team’s Cooperative Efforts Enable School to Open on Time
Surety Bond Quarterly - Summer 2015 - 28
Surety Bond Quarterly - Summer 2015 - 29
Surety Bond Quarterly - Summer 2015 - NASBP’s Attorney Advisory Council - Participants Opine on Current Risk Management Challenges and Business Opportunities
Surety Bond Quarterly - Summer 2015 - 31
Surety Bond Quarterly - Summer 2015 - The AIA Describes Updated and Expanded Design-Build Documents Family
Surety Bond Quarterly - Summer 2015 - 33
Surety Bond Quarterly - Summer 2015 - Contractor Practices That may Result in Construction Claims to Recover for Delays and increased Costs
Surety Bond Quarterly - Summer 2015 - 35
Surety Bond Quarterly - Summer 2015 - NASBP Annual Meeting Speakers - Veterans can benefit private sector, but need help finding jobs
Surety Bond Quarterly - Summer 2015 - 37
Surety Bond Quarterly - Summer 2015 - Index to Advertisers
Surety Bond Quarterly - Summer 2015 - cover3
Surety Bond Quarterly - Summer 2015 - cover4
Surety Bond Quarterly - Summer 2015 - outsert1
Surety Bond Quarterly - Summer 2015 - outsert2
Surety Bond Quarterly - Summer 2015 - 43
Surety Bond Quarterly - Summer 2015 - 44
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