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Loss Position Irrelevant After Wrongful Termination Bonds-payment; Termination-default

Monday, May 03, 2004 01:00 pm

Loss Position Irrelevant After Wrongful Termination Bonds-payment; Termination-default

A federal district court has ruled that when a prime contractor wrongfully terminated a subcontract, the sub could recover the value of its labor and materials from a Miller Act payment bond, regardless of the subcontractor's loss position at the time of termination.

The U.S. Army Corps of Engineers awarded a contract to EnviroServe, Inc. for renovation of barracks in Natick, Massachusetts. EnviroServe furnished payment and performance bonds, pursuant to the Miller Act, issued by National Union Fire Insurance Company of Pittsburgh. EnviroServe then subcontracted the electrical work to Metric E [...]

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