Construction Bonds

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August 29, 2018
Author: Peter W. Hahn
Organization: Dinsmore & Shohl LLP

A. Background
A bid bond assures the owner that only those contractors truly capable of performing the work contemplated by the project’s plans and specifications will bid the work. On many large private projects and virtually all public projects in Ohio, a bidding contractor is required to furnish the project’s owner with a bid bond. The bond is given to the owner at the time the bid is submitted. The bid bond serves as a guarantee to the owner that, should the bidding contractor be awarded the work, it will enter into a contract with the owner for the amount stated in the bid. If the principal of the bond (the party bidding on the project) either fails to enter into a contract in accordance with its bid or fails to provide the necessary performance and payment bonds required by the terms of the contract, the obligee (the project’s owner) can draw against the bid bond. If the contract is signed by the successful bidder, however, the bid bond simply expires.

B. Ohio Law
1. Generally.
The general statutes governing the vast majority of public contractors’ bonds in Ohio (also known as Ohio’s “Little Miller Act”) are found in R.C. 153.54–153.571. R.C. 153.54 requires that each person bidding for a contract with the state or any political subdivision, district, institution, or other agency thereof (not including the Ohio Department of Transportation), for any public improvement must file a “bid guaranty” in the form of either (1) a bond for the full amount of the bid, or (2) a certified check, cashiers’ check, or letter of credit equal to 10% of the bid.1

2. Exceptions to the Bid Bond Requirement.
Entities bidding a public project in the capacity of construction manager at risk or as a design-build firm are not required to submit a bid bond.2 They may, however, be required to submit a letter of credit.3

3. When and To What Extent is a Bid Bond Utilized?
In Ohio, if the bidder fails, without legal justification, to enter into the contract and the public authority awards the contract to the next lowest bidder, the bidder and the surety are liable to the public authority for the difference between the bid and that of the next lowest bidder, or 10% of the amount of the bid, whichever is less.4 If the public authority does not award the contract to the next lowest bidder but submits the project for rebidding, the original bidder that failed to enter into the contract is, except as provided by law, liable to the public authority for a penal sum not to exceed 10% of the amount of the bid or the cost in connection with the resubmission of printing the new contract documents, required advertising, and printing notices to prospective bidders, whichever is less.5

If alternate bids are utilized on the project, the amount of the bid bond and the applicable penal sum can vary. The form of bond used by public entities in Ohio specifies that the amount of the bond must incorporate any additive or deductive alternate bids made by the bidder which are accepted by the public authority, but in no case will the penal sum exceed a stated amount of dollars.6

4. Protections for Bidders
In an effort to protect contractors with lower bonding capacities from being overextended, Ohio statutes provide that a bidder for a contract with the state or a state agency, not including the Ohio Department of Transportation, for a public improvement costing less than $500,000 may withdraw its bid from consideration if that same bidder’s bid for some other contract with the state or a state agency costing less than $500,000 has already been accepted.7

This ensures that the bidder will have the resources necessary to complete the projects for which it has bid. The bidder attempting to withdraw its bid under this provision must certify, in good faith, that the total amount of all current contracts is less than $500,000. Likewise, the surety issuing the bond must also certify in good faith that the bidder is unable to perform the subsequent contract because to do so would exceed the bidder’s bonding capacity.8 If the bid is withdrawn as described above, neither the bidder nor its surety are liable for the difference between its bid and that of the next lowest bidder or the consequential costs of rebidding the project.

A. Overview and Purpose
The purpose of a payment bond is to protect certain laborers, material suppliers, and subcontractors against nonpayment by the contractor. A payment bond also guarantees the owner of the project that subcontractors and suppliers will be paid the monies that they are due from the contractor. The owner is considered the “obligee” and the laborers, material suppliers, and subcontractors are the “beneficiaries” of the payment bond.

The surety’s obligation on a payment bond is to pay those who have furnished labor or material to the principal or to subcontractors of the principal, in the performance of the contract between the principal and the owner. Generally, condition precedents exist for recovery on the payment bond. These conditions are usually contained either in the bond itself,9 or in the statute under which the bond is issued,10 and consist of requirements for written notice to the surety, the period of time in which suite may be brought, and the location where a suit may be filed.

Both the obligee and the beneficiaries may sue on the bond to obtain the funds due. If the principal fails to pay the subcontractors or suppliers, they may collect from the principal or surety under the payment bond, up to the penal sum of the bond. The penal sum in a payment bond is often less than the total amount of the prime contract, and is intended only to cover anticipated subcontractor and supplier costs.

An owner also benefits from a payment bond in that the laborers, subcontractors, and suppliers are assured of payment and will continue to perform their work on the project even though they are not getting paid directly by the contractor. On a private project, the owner may benefit by providing subcontractors and suppliers a substitute to mechanics’ liens.

B. What Happens When a Default Occurs?
The surety has two options when faced with a claim on a payment bond: refuse to pay or pay the claimant. But once a claim is made under a payment bond, the surety must reasonably investigate the claimed default to determine the merit of the claim. The claims process varies depending on whether the project is public or private. On public projects in Ohio, claims on payment bonds must be made in accordance with R.C. 153.56. On private projects, the claim should be made in accordance with the terms stated in the bond.

During its investigation the surety must also determined whether it may rely on any defenses, whether the claimants have presented a properly documented claim in which timely notice was given, and whether the bond in fact covers the labor or material requested by the claimants. Additionally, the surety must determine its potential financial loss and whether it has an adequate penal sum to pay all claims under the payment bond.

To investigate these payment claims, the surety will usually request the following information from the claimant and the principal:
• Contract documents, plans, specifications, and addenda.
• Applications for payment, payment certifications, and canceled checks.
• Notices of breach or default in payment.
• Statement of account.
• Accounts payable and receivable (from the principal).
• Estimates of the remaining work for each claimant.
• Substantial and final completion certificates.

After its investigation, if the surety concludes that a default in payment has in fact occurred, that the claim is timely and properly asserted, there that are no defenses to the claims available, and that the surety has an adequate sum under the bond to pay all of the claims, it will usually discharge its payment obligations to the claimants.

A. Overview and Purpose
A performance bond secures the contractor’s promise to perform the contract in accordance with its terms and conditions, at the agreed upon price, and within the time allowed.

The owner is the obligee of a performance bond. If the contractor defaults, or is terminated for default by the owner, the owner may then call upon the surety to complete the contract, or make payment under the terms of the bond, or a combination of those options.

B. What Happens When a Default Occurs?
Just like a claim on a payment bond, a surety must make a reasonable investigation into a claim on a performance bond. In addition to the documents outlined above, a surety should request the following documents from the owner and the contractor:
• Summary of substantiation of the claim.
• Job schedules, punchlists, and photographs.
• Correspondence between the owner, and the contractor, and the contractor’s subs.
• Substantial and final completion certificates.

To understand the project more fully and evaluate the project documents, the surety might also interview key personnel of the contractor and the owner, as well as the project’s architect, if necessary to obtain additional information.

After investigating the merits of a claim under a performance bond and determining the claim is valid, the surety generally has five choices: (1) complete the contract itself through a completion contractor, thereby taking over the contract; (2) select a new contractor to contract directly with the owner; (3) finance the principal’s completion of the project; (4) buy back the bond; or (5) do nothing. The following summarizes each of these options:

1. Contract with Another Contractor
Though a surety may find an entirely new contactor to complete performance of the contract, often the surety will contract with the defaulting contractor to finish the work due to the contractor’s familiarity with the plans, specifications, and owner’s requirements, and because the contractor is already mobilized on the project site.

2. Select a New Contractor to Directly Contract with the Owner
The surety may arrange for the owner to enter into a contract with a new contractor to complete the project. Under this scenario, the surety will be responsible to the owner for the additional costs of the completion contract that exceed the amount in which the owner would have been responsible under the principle contractor’s contract if the default had not occurred.

3. Finance the Principal Contractor to Complete the Work
Where the owner is satisfied with the work performed by the principal contractor, but the primary cause of the principal’s problems is insufficient funds, the surety may elect to finance the principal. The main disadvantage with this option is that the surety’s liability is no longer limited to the penal sum of the performance bond.

4. Buy Back the Bond
The option of buying back the bond is a fast and clean approach to resolving a performance bond claim. In this scenario, the surety provides payment not to exceed the penal sum of the bond to the obligee in full and final settlement of the claim. The drawback to this choice is that the other options might allow the expenditure of a lower dollar amount, and the principal could contend that the settlement payment was too high or improperly made.

5. Do Nothing
Last, the surety may do nothing when a claim is made on the performance bond and allow the obligee to take the necessary steps to collect on the bond. Under this option, most courts have ruled that the surety’s liability is limited to the penal sum of the bond.

A. Public Projects
1. Bid Bonds
After a bid bond becomes effective, it may be terminated only in accordance with its express terms or R.C. 9.31. That statute provides that, on public works, a bidder may withdraw its bid after opening only if all three of the following conditions are met: (1) the price bid was substantially lower than the other bids, providing the bid was submitted in good faith; (2) the reason for the bid being substantially lower was a clerical mistake as opposed to a judgment mistake and was actually due to an unintentional and substantial arithmetic error or an unintentional omission of a substantial quantity of work made directly in compilation of the bid; and (3) written notice is given to the contracting authority within two business days after the bid opening.

Obviously, prompt action by a contractor is required on public projects when such a contractor realizes that a clerical or mathematical mistake has occurred in order to avoid a claim on its bid bond. Contractors on work without the requirement of a bid bond have greater latitude to withdraw a bid after opening when a significant mistake is made that would result in financial hardship for the contractor.

A defense often asserted by a subcontractor is that its bid to the general contractor was substantially lower than that of other bidders, inferring that the general contractor knew or should have known of the subcontractor’s mistake.11 This is one reason general contractors should verify any subcontractor bid that appears unusual or “out of line.” There have been cases in other jurisdictions that ruled that the general contractor knew or should have known of the mistaken nature of the bid when the disparity of the bids was nearly 50%.12 Another court suggested that there was a presumption of a “busted bid” when the variation was 20% or more, and stated that the expected variation between bidders should decrease as the size of the contract increases.13

2. Payment Bonds
Thomas Steel, Inc. v. Wilson Bennett, Inc.,14 an Ohio Eighth District Court of Appeals decision, thoroughly addressed the remedies available to a supplier against the general contractor on a public improvement contract. Thomas Steel supplied structural steel to a subcontractor on a public improvement project at Cleveland Hopkins International Airport. Thomas Steel sued the general contractor and its surety on the payment bond, and also advanced an unjust enrichment claim against the general contractor. The trial court granted summary judgment to defendants, relying on technical deficiencies in the payment bond claim, and Thomas Steel appealed to the court of appeals.

The court of appeals affirmed, but also addressed Thomas Steel’s unjust enrichment claim, finding that Thomas Steel’s exclusive remedy against the general contractor was on the payment bond claim, not on other common-law remedies. The court reasoned: “[I]f an independent claim for unjust enrichment were also allowed, subcontractors, material suppliers,  and laborers on public works contracts could effectively ignore the notice and commencement of-suit requirements of the bond statute, which would become meaningless.”

B. Private Projects
The remedy available on a private project is a claim against the bond. The rights, obligations, and timing requirements will be outlined in the terms of the bond.

Subrogation is the substitution of one party for another whose debt the party pays, which entitles the paying party to the rights, remedies, or securities that would otherwise belong to the debtor. Through subrogation, the substituted party succeeds to the rights of the other in relation to the debt or claim.

In the construction context, the right of subrogation arises when a surety completes its contractual obligation, and as such, is not dependent upon an assignment, lien, or additional contract. A surety’s right of subrogation, however, does not exist beyond the extent necessary to reimburse itself for payments made to fulfill its obligations under a surety bond. Further, a subrogation right is not a security interest requiring compliance with the filing mandates under the Uniform Commercial Code.

A construction surety has a right of subrogation under the contractual terms of the bond when it makes a payment under the bond on behalf of its principal. It may then step into the shoes of the principal to recover the cost of making payment. These subrogation rights for a performance bond begin on the date of the execution of the bond.

The surety is also entitled to recover its payment costs even in the absence of an express agreement with the principal under the doctrine of equitable subrogation, which is a remedy that arises by operation of law due to the surety’s right in equity to collect any amount owed to the principal from the obligee that it has paid on the principal’s behalf. To maintain a claim for equitable subrogation on a performance bond, the surety must take over the contract or finance completion of the defaulted contract.

The surety on the bond of a contractor performing work on a public improvement project is entitled to assert the benefits of subrogation as against all funds that the public authority owes the contractor at the time the surety is required to pay the claims of laborers, suppliers, and subcontractors. These rights are secured by the suretyship obligation, and the right of subrogation is particularly applicable to such funds under the terms of the contract, which are reserved and retained until complete performance and acceptance of the work by the owner. Moreover, the surety for a construction contract for public work may have recourse to the funds held by the public authority based on the principle of subrogation, either to the rights of the claimants or the rights of the public authority.

Prior to commencing a suit under R.C. 153.56, a claimant must provide a notice of furnishing of the amount due within 90 days of the completion of the principal contractor. Sixty days after furnishing the statement, the claimant may file suit.15 The suit must be filed within one year from the date of acceptance of the public improvement for which the bond was provided.16 The statute of limitations contained in R.C. 153.56 applies only to suits brought against a lender or a political subdivision.17

Pursuant to 40 U.S.C. § 3133(b)(4), a bond claim under the Miller Act (discussed in a later section of this paper) must be brought with one year of the last day on which labor was performed or material was supplied. A claimant on the bond must commence the action within the prescribed period as a condition precedent to maintenance of the suit.18

A. Background
Enacted in 1935, the Miller Act, codified at 40 U.S.C. § 3131, requires that, before any contract exceeding $100,000 is awarded for the construction, alteration, or repair of any building or public work of the United States, the construction contractor must furnish a payment bond and a performance bond from a surety acceptable to the officer awarding the contract. The purpose of the Miller Act is to ensure that construction contractors are qualified to perform their contractual obligations to the government, that taxpayer funds are protected through third-party guarantees of contract performance and payment, and that subcontractors and suppliers have a payment remedy if the prime contractor becomes insolvent or simply does not pay them. Since its enactment, several state legislatures have passed “Little Miller Acts” requiring prime contractors on state public works projects to furnish payment bonds for the protection of subcontractors and material suppliers. (Ohio’s Little Miller Act, discussed above, is codified at R.C. 153.54- 153.571.)

B. Obtaining a Bond that Complies with Miller Act Requirements
1. The Bonding Company and Form of the Bond.
The corporate surety company that is willing to issue these two bonds for the general contractor must be registered as a qualified surety by the United States Department of Treasury, which registration is issued on a yearly cycle.19 The form of the actual bond is specified in the Federal Acquisition Regulation, located in 48 C.F.R. § 53.301-25-A.

2. The Amount of the Bond.
Generally, the amount of the performance bond that is required to satisfactorily protect the government is 100% of the total contract price. The payment bond cannot be in an amount less than the amount of the performance bond.20

C. Who and What is Protected under the Miller Act?
1. Who is Protected?
When working on a private construction project, an unpaid subcontractor or material supplier can typically file a mechanics’ lien against the project itself. The lien attaches directly to the property, preventing transfers and sales, and protecting the unpaid contractor’s right to payment. On jobs where the federal government owns the property itself, there is no legal right to lien the project due to the federal government’s sovereign immunity. The Miller Act also limits the right to initiate suit for non-payment to those dealing with the prime contractor and those having a direct contractual relationship with a subcontractor to the prime contractor.

Although the payment bond is intended to protect “all persons supplying labor and material in carrying out the work provided for in the contract,” the parties that may assert a claim are limited.21

Unpaid first-tier subcontractors or material suppliers that provide materials directly to the general contractor that procured the bond must turn to the Miller Act for relief.22 The Miller Act allows these entities to sue the surety on the Miller Act Bond. Suit must be brought within one year from the last date they provided materials or services. A Miller Act Notice may be providedto the owner or surety or both.

Other subcontractors as well as material suppliers who have contracts with the first-tier subcontractors that are directly contracted with the prime contractor are also protected under the Miller Act.23 Proper claimants against the Miller Act payment bond also include professionals such as architects, engineers, and surveyors who provide professional services for the benefit of the project.24 Any other parties who find themselves outside of these two tiers of contracts or not providing professional services are considered too distant to make a claim against the payment bond.25

2. What is Protected?
“The breadth of labor, materials and equipment that are covered under the Miller Act payment bond is substantial. In addition to the general or obvious items that are covered by the payment bond such as labor provided by subcontractors and materials supplied by material suppliers, there are numerous other items that are also compensable under a Miller Act payment bond.”26 For example:
• Gasoline and oil used in trucks which were utilized on the project at issue;
• Tires, tubes, and tire repairs where such materials were provided with the understanding that they would be used substantially on the project at issue;
• Lumber, tools, and hardware indispensable for the prosecution of the work, even if some portions of that material were reusable.27
• Groceries and provisions consumed in a boarding house required to be maintained by the general contractor for its laborers as part of the public project at issue28;

D. Requirements of the Miller Act Notice.
All claimants must wait 90 days after they last furnished labor or material to the project before they can pursue a civil action against the Miller Act payment bond.29 The 90-day period is considered a reasonable amount of time for money to flow down from the owner and the general contractor to the subcontractor performing the work. Thus, until this period accrues, the claim against the Miller Act payment bond is inchoate and a civil action filed against the surety within this time period is premature.

Where a claimant contracts directly with the general contractor, there are no special notice requirements to maintain an action against the Miller Act payment bond. However, if the claimant did not contract directly with the general contractor, but instead contracted with a subcontractor of the general contractor (i.e., the claimant is a second-tier subcontractor) then the claimant must provide notice of its claim to the general contractor within 90 days of the claimant’s last furnishing of labor or material to the project. The notice:
• must be in writing;30
• must state with substantial accuracy the monetary amount claimed;31
• must name the party to or for whom the labor or material was furnished;32 and
• must be delivered by any means that provides written verification of delivery or by any means by which the United States marshal of the district in which the project is located may serve summonses.33

The 90-day notice requirement for second-tier subcontractors and second-tier material suppliers is mandatory (i.e., it is a condition precedent).34 If the second-tier subcontractor or material supplier does not provide the notice, then the claim against the payment bond and the surety is barred.35

E. Bringing Suit under the Miller Act
1. Venue and Jurisdiction.
If the requirements discussed above are satisfied or can be established, the claimant may bring a civil action, without regard to the amount in controversy, against the Miller Act payment bond in the United States District Court, naming the surety as a defendant.36 Notwithstanding this, there is authority indicating that this venue requirement may be modified by contract.37 Although the venue requirements of the Miller Act may be waived by agreement of the parties, the jurisdictional requirements may not.38 Thus, a provision which attempts to make a state court the exclusive forum for a Miller Act claim would be unenforceable as that claim can only be heard in federal court.39 An otherwise enforceable agreement to arbitrate between the subcontractor and the general contractor, however, is not barred by the Miller Act.40 And, as the surety’s liability is derivative of the general contractor’s, the surety may typically avail itself of any defense or contract provision properly available to the general contractor.

2. Timing of Claim.
A civil action asserting a claim against the Miller Act payment bond “must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person bringing the action.”41 Failure to file suit within the one-year period following last furnishing is a complete bar to the claimant’s payment bond claim.42

3. Waiving Miller Act Claims.
A claimant cannot prospectively waive a claim against a Miller Act payment bond. Thus, a provision in a contract that attempts to have a subcontractor waive its right to pursue a claim against the Miller Act is void and unenforceable. If the subcontractor consents to waiving its claim against the Miller Act after it has completed its work (e.g., as part of a settlement of claims), the Miller Act requires that the waiver must be in writing, signed by the party waiving its claim, and signed after the work at issue has been performed.43

Because suretyship constitutes a contractual relation whereby the surety agrees to answer for the debt or default of the principal, the surety will generally be primarily and jointly liable with principal. A surety may assert certain defenses, however, to avoid being liable on a payment and performance bond.

When a claim is made on a payment or performance bond, the surety can generally raise all the defenses the contractor would be able to raise since the surety stands in the shoes of its principal. Under this general rule, if the contractor is not liable for the claim, the surety is likewise not liable under the bond. Of course, the list of additional defenses varies based upon the circumstances of each case. And since a surety bond is a contract, the surety may also waive contractual defenses.

One of the surety’s strongest defenses is the timeliness of the claim made on the bond. Some forms of surety bonds impose strict notice requirements on how the surety is to be notified of the contractor’s defaults. For example, one commonly used bond requires the owner to first send a letter to the contractor and surety informing the contractor that the owner is considering declaring the contractor in default. The owner must then arrange a meeting between itself and the contractor within a certain number of days of the letter being sent. If the parties cannot resolve their issues, the owner must declare the contractor in default in writing and terminate the contractor from the project. Last, the owner must agree to pay the balance of the contract price to the surety. Only then will the surety be required to investigate and potentially pay on the claim.

Though such procedures seem severe, courts have strictly enforced these notice requirements. For instance, in Safety Signs, LLC v. Niles-Wiese Construction Company,44 a contractor working on the construction of an airport runway had a payment bond that required its surety to pay its subcontractors if the contractor did not. One of the subcontractor’s on the project sent a notice of its claim on the payment bond to the contractor’s primary business address rather than the address listed on the payment bond. The applicable statute, however, required service of a claim as set forth in the bond. As such, even though the surety agreed that 44 820 N.W.2d 854 (Minn. Ct. App. 2012). the subcontractor had completed its work and had not been paid in full, the subcontractor could not recover payment from the surety because it did not strictly comply with the notice requirement in the statute and the court ruled that this defect could not be waived.45

On public projects, Ohio has strict requirements for the timing of a claim on a surety bond as well as the time allowed to file suit against the surety on a bond. Under R.C. 153.56(A), a claimant must provide notice to the surety of the amount it is owed on the project no later than 90 days after completion of the contract by the principal contractor or design-build firm, and acceptance of the public improvement by an authorized representative of the public authority that owns the project. Additionally, suit must be filed on the bond claim within a year from the date of acceptance of the public improvement under R.C. 153.56(B).

On private projects, the timing of a claim depends upon the language of the bond. The AIA Document A312-2010 Performance Bond, for example, requires that suit be brought under the bond no later than two years after the contractor stopped work on the project. The A312- 2010 Payment Bond requires that suit be brought on the bond no later than one year after the contractor completes its work on the project.

A. Defenses to Payment Bond Claims
A surety has several defenses it can assert to payment bond claims, including the following:
(1) The contractor’s defenses, except those personal to the contractor such as bankruptcy and insanity.
(2) The contractor’s setoffs and counterclaims;
(3) The claimant’s material breach;
(4) The claimant’s failure to mitigate its damages;
(5) The claimant’s failure to give proper notice;
(6) The claimant’s failure to commence suit within the time prescribed by the bond or by statute or in the proper venue;
(7) The penal sum of the bond as a limitation of liability;
(8) The lack of a requirement to pay statutory penalties under Ohio’s Prompt Payment, including the interest and attorneys’ fees assessed against a contractor for its failure to promptly pay its subcontractors;
(9) For federal projects, if the claimant is a third tier claimant or lower;
(10) For remote claimants, failure to timely provide sufficient notice of the claim to the proper person or entity;
(11) Proof that that the materials or services provided were not used in carrying out the work; and
(12) Defenses based on certain subcontract provisions, including pay-whenpaid and pay-if-defenses.

B. Defenses to Performance Bond Claims
A surety has several defenses it can assert to a performance bond claim, including the following:
(1) The contractor’s defenses, except those personal to the contractor, such as bankruptcy and insanity. These defenses include:
(a) Impossibility to perform the construction contract;
(b) Fraud or duress by the obligee in obtaining the consent of the principal on the construction contract, especially where the principal has subsequently repudiated the contract;
(c) Prior breach by the obligee in the performance of conditions precedent in the construction contract; and
(d) The contractor’s lack of default.
(2) The contractor’s setoffs and counterclaims;
(3) The obligee’s material breach or default;
(4) The obligee’s failure to mitigate its damages;
(5) The obligee’s failure to give proper notice;
(6) The obligee’s failure to commence suit within the time prescribed by the bond or by statute or in the proper venue;

1 Ohio Rev. Code § 153.54(B)(1).
2 Ohio Rev. Code § 153.54(A).
3 Ohio Rev. Code § 153.54(C)(2).
4 Ohio Rev. Code § 153.54(B)(1).
5 Ohio Rev. Code § 153.54(B)(1).
6 Ohio Rev. Code § 153.571.
7 Ohio Rev. Code § 153.54(G).
8 Ohio Rev. Code § 153.54(G).
9 For example, in the AIA, A-311 document.
10 For example, in the Miller Act, 40 U.S.C. § 270b.
11 Wargo Bldrs. Inc., v. Cox Plumbing & Heating, 26 Ohio App.2d 1 (1971).
12 S.N. Nielson Co. v. Nat'l Heat & Power, 337 N.E.2d 387 (1975).
13 Hardeman v. Arkansas Power & Light, 380 F. Supp. 298 (1974).
14 127 Ohio App.3d 96, 711 N.E.2d 1029 (1998)
15 See O.R.C. § 153.56(A) & (B); Whitaker Merrell Co. v. Claude A. Janes, Inc., 87 Ohio L. Ab. 556, 173 N.E.2d 402 (CP 1961).
16 O.R.C. § 153.56(B).
17 Burson Trucking, Inc. v. Kirk Bros. Co., 5th Dist. Morrow No. 2006CA0002, 2007 Ohio 5639, ¶ 14.
18 United States use of T Square Equipment Corp. v Gregor J. Schaefer Sons, Inc., 272 F Supp 962 (E.D. N.Y. 1967).
19 The Surety Bond Blog, The Miller Act and What it Means, actwhat- it-means (Oct. 13, 2008).
20 40 U.S.C. § 3131(b)(2).
21 40 U.S.C. § 3131(b)(2).
22 Scott Wolfe, Jr., The Lien and Credit Journal, 5 Things to Know About the Miller Act, (Dec. 2, 2009).
23 The Surety Bond Blog, supra note 1.
24 See, e.g., Price v. H. L. Coble Const. Co., 317 F.2d 312, 322 (5th Cir. 1963) (holding that an architect could recover against a Miller Act payment bond even where the architect’s compensation was calculated on a percentage basis).
25 The Surety Bond Blog, supra note 1. See also Clifford F. MacEvoy Co. v. Calvin Tomkins Co., 322 U.S. 102
(1944) (finding that the Miller Act did not authorize a supplier of a material supplier of a government contractor to look to the government contractor or its surety for nonpayment by the material supplier).
26 Jason T. Strickland, An Essential Brick and Its Chip: A Refresher on Payment Bond Claims Under the Miller Act and the “Little Miller Act,” (May 24, 2011).
27 See, e.g., Koppers Co. v. Five Boro Constr. Corp., 310 F.2d 701 (4th Cir. 1962); Color Craft Corp. v. Dickstein, 157 F.Supp. 126 (E.D.N.C. 1957).
28 Brogan v. Nat’l Surety Co., 246 U.S. 257, 62 L.Ed. 703, 38 S.Ct. 250 (1918).
29 40 U.S.C. § 3133(b)(2).
30 40 U.S.C. § 3133(b)(2)(A). See also Pittsburgh Builder Supply Co. v. Westmoreland Const. Co., 702 F. Supp. 106
(W.D. Pa. 1989) (holding that actual, but not written, notice was insufficient to satisfy the ninety-day notice requirement).
31 40 U.S.C. § 3133(b)(2).
32 Id.
33 Id. The Fourth Circuit Court of Appeals, in a North Carolina case, has held that the notice must actually be received by the general contractor within the ninety-day period. See Pepperburn’s Insulation, Inc. v. Artco Corp., 970 F.2d 1340 (4th Cir. 1992).
34 See John D. Ahern Co. v. J.F. White Contracting Co., 649 F.2d 29 (1st Cir. 1981).
35 Id.
36 40 U.S.C. § 3133(b)(3) (emphasis added).
37 See, e.g., Coken v. Nat’l Union Fire Ins. Co of Pittsburgh, PA, 103-CV-00222, 2003 WL 22937731 at *2–3 (M.D.N.C. Dec. 2, 2003) (unpublished) (allowing transfer of a Miller Act case where there was an applicable venue selection clause in the parties’ subcontract selecting a federal district other than the district in which the project was performed and in which the suit had been brought).
38 See B&D Mech. Contractors v. St. Paul Mercury Ins. Co., 70 F.3d 1115, 1117-18 (10th Cir. 1995).
39 Id.
40 See, e.g., Bay State York Co. v. Seward Constr. Co., 298 F.Supp. 1356 (D.N.H. 1969); Ray Gains, Inc. v. Essential
Constr. Co., 261 F. Supp. 715 (D. Md. 1966).
41 40 U.S.C. § 3133(b)(4).
42 See Pippin v. J.R. Youngdale Const. Co., Inc., 923 F.2d 146 (9th Cir. 1991); Bailey v. Faux, 704 F. Supp. 1051 (D.
Utah 1989).
43 40 U.S.C. § 3133(c).
45 Safety Signs, LLC v. Niles-Wiese Constr. Co., 820 N.W.2d 854 (Minn. Ct. App. 2012).

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