We are General Contractor for public works in California. Just received notice of Nonpayment from one of our sub.

3 weeks ago

I am working for GC for California Public works and one of sub didn’t get paid due to several reasons (we have hard evidence that this sub didn’t perform such work so we didn’t pay them).
Now I received Notice of Nonpayment from this sub. I researched a bit but in order to file mechanic lien or bond claim, sub must have submitted 20 days preliminary notice. This sub didn’t submit prelim notice so I assume that sub doesn’t have right to file a claim on this project. right?
As a GC, what kind of action should we take after receiving this notice? Should we do something?

Managing Partner Gibbs Giden LLP

Your direct subcontractor does not necessarily have to serve a preliminary notice (Civil Code section 9300(b)(2)).  There are possible defenses that a payment bond surety can raise if the subcontractor makes a payment bond claim due to the failure to serve a preliminary notice, but the subcontractor can likely go ahead with a stop payment notice.  You should definitely consult an attorney to discuss your specific situation, but you should probably respond in writing.   This decision may also depend on your subcontract agreement with the subcontractor and your obligations to provide notice of failure to perform etc.

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