Multiple Complaints on Contractors Bond

2 months ago

We submitted a complaint to our contractor’s bond for poor workmanship in August 2018. The Bond company just informed us that there is a 2nd complaint for the same contractor. I know that “If a bond required by this article is insufficient to pay all claims in full, the sum of the bond shall be distributed to all claimants in proportion to the amount of their respective claims.” However, what are the guard rails here? Do we need to wait until they finish the investigation on the 2nd complaint – which could be another 9 months? and during that time another complaint can come in? Or is our 2018 complaint against the 2018 bond and the new complaint against the 2019 bond? I am not sure when the work was done related to complaint #2. Again, I am just trying to find the rules here that the bond company needs to follow when there is more than one complaint against a contractor’s bond.

Senior Legal Associate Levelset

These are great questions, and I’m sorry you’re even having to deal with making a claim against a contractor’s bond. Admittedly, I’m not an expert regarding claims against a contractor’s license bond, but there are some principles that should apply here.

Generally, it’s a good idea to regularly follow up with the surety in order to ensure the proper processing of the claim that’s been made. Sureties regularly let a claim drag on and on – but if an owner can show that they’re serious about the claim and that they aren’t afraid to take legal action to recover from the bond, the surety might be more apt to moving a claim along.

So, a surety may attempt to hold off making payment on a claim until they have the opportunity to evaluate each claim made against the bond. But, that doesn’t necessarily mean a claimant has to wait until the timeframe that works best for the surety – and, if necessary, filing suit (or at least threatening to file suit) against the surety bond may be an option to speed things up.

For a little more insight on how best to proceed with a claim against a contractor’s license bond, it would be wise to consult a local construction attorney who’s familiar with dealing with sureties and the CSLB. They’ll be able to review your circumstances as well as any relevant documentation and communications and advise on how best to proceed. Plus, they might be able to shed a little more light on what timeframes should be expected with a license bond claim, and when suit might be appropriate.

For more background on license bond claims, this is a great article from the California Construction Law Blog: Shaken? Stirred? A Primer on License Bond Claims in California.

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