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How much longer should I wait before I file a lawsuit?

On this project site located in Columbus, OH we supplied equipment to a general contractor on a federal project. At the point which (the subcontractor) had gone unpaid by the GC for 3 months, we sent in a affidavit claiming our amount against the bonding company in December 2019. We (the subcontractor) received a response that the claim was denied on 3/5/20 and put together a rebuttal with proof against the reasons given for claim denial and submitted this to the bonding company on 3/31/20; it was acknowledged on 4/4/20. this is the 7th week now and we have received small excuses from the bonding company like "we are getting to it" or "the bonded GC has outstanding questions to send back to us". I am concerned the bonding company is buying time. I am wondering how much longer (as the subcontractor) should wait before we begin a lawsuit process.

1 reply

May 22, 2020

It's absolutely possible that the surety bonding company would do what it can to avoid paying out a claim. And, it's also possible the surety is stalling in hopes that you'll miss a deadline (though, at best, that'd constitute shady business practices). Regardless of whether it's intentional, though - sureties tend to take a long time to review. That idea is discussed in this article: How to Get Paid – 4 Steps to Take After Filing a Bond Claim. If the surety isn't taking your claim seriously, then threatening to enforce your bond claim (i.e. threatening the lawsuit) might work. If the surety knows they'll face litigation expenses, they may be more open to paying the claim. So, notifying them that you're about to file a lawsuit could get the ball rolling - particularly when that threat is sent via an attorney letter. You can download a template for such a threat here: Notice of Intent to File Miller Act Suit Form. Finally keep in mind that the deadline to enforce a payment bond claim on a federal project will be 1 year from the last date when you furnish labor or materials to the job. So, if that date is closing in, it'd be wise to start preparing. And, consulting with a local Ohio construction attorney could be useful for picking out what options make the most sense moving forward. Plus, you'll need an attorney if you decide to proceed with the enforcement suit, anyway.

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