Filed Bond Claim on a State Job – What next?

2 weeks ago

We filed the bond claim through Levelset 5/29. Our customer (subcontractor) and the GC have become unresponsive since then. What’s the next step?

Senior Legal Associate Levelset

Once a bond claim has been made, it’s relatively common for the dispute to cool off while the surety investigates the claim that was made. But, where a contractor and the surety have been unresponsive, reminding them of the claim and informing them that, if necessary, the bond claim will be enforced might be helpful.

Following up with the surety will force them to acknowledge the payment claim being made against the bond. And, if they aren’t responsive, then at least it will be apparent that enforcing the bond claim (by filing a lawsuit against the bond) will be necessary.

If following up with the surety isn’t helpful, and if the contractor and your customer have also been unresponsive, sending something a little more formal might do the trick. Sending a document like a Notice of Intent to File Action on Bond might help. That document is similar to sending a Notice of Intent to Foreclose on a mechanice lien claim – the Notice of Intent to File Action on Bond states that if payment isn’t made and made soon, then a lawsuit will be brought on the bond. And, a surety, contractor, and customer in receipt of that notice would be aware of the stakes at hand.

Further, sending a payment demand letter might help too. By sending a formal payment demand, much like the Notice of Intent described above, the payment dispute is brought back into the forefront and recipients of the payment demand will have to take the issue seriously.

Finally, if all else fails, proceeding with a lawsuit against the bond – similarly to a lien enforcement suit – could be an effective option. Nobody likes dealing with a lawsuit, so the other parties may come to their senses and pay the claim, or at least the legal proceeding might force them to make payment.

Lastly, this is (unfortunately) a relatively common issue – so Levelset wrote about it here: How to Get Paid – Next Steps After Filing a Bond Claim. That article reiterates some of the points above, and I think it will be helpful here.

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