Can a sub-contractor file a Bond Claim without having properly filed a 20-day notice?

4 weeks ago

I was reading a Levelset article discussing the changes made in 2011 by SB 293, Padilla. The article states that:
“[t]here is no longer a safety net allowing claims at the completion of construction, and therefore, those who do not properly send their preliminary notices on-time, will no longer have any rights to make a claim against the payment bond or to file a stop notice.”

As I understand it, a subcontractor can still make a claim against a payment bond under the rules of CA Civ Code section 9560. Am I missing something in my reading?

Thank you.

Managing Partner Gibbs Giden LLP

Good afternoon —

Subcontractors can still assert payment bond claims without a preliminary notice, as long as a timely notice of payment bond claim is made to the surety and principal.  However, there is a chance that such a bond claim (with no proper preliminary notice served) may be defeated by a showing that monies were paid downstream in “good faith” and, in such a case, the surety and principal may have a defense to such a payment bond claim.  The only want to prevent this argument is to timely do a preliminary notice.

—CN

Disclaimer: NOTE: The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. This posting does not create any attorney-client relationship and is neither intended to constitute an advertisement nor a solicitation.
| 0 Upvotes
Your answer or comment:
Are you a Registered Expert?
You are not logged in and will be posting
anonymously. Log in Now