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Sloppy Bookkeeping Means Supplier Wins Its Miller Act Suit

Sunday, March 04, 2007 11:37 am

Sloppy Bookkeeping Means Supplier Wins Its Miller Act Suit

A Mississippi federal court ruled that a sub's endorsement of a joint check does not constitute a misrepresenta tion or concealment of fact when the contractor has no idea what portions of the checks it issues are for labor versus materials.

The U.S. and Debcon entered a construction contract. Travelers Casualty and Surety Co. issued a payment bond for the project with Debcon as principal. Debcon contracted with Allen's Construction, Inc. to perform a portion of the main contract for $684,800. Allen's subcontracted with Just- Rite Supply, Inc. for project materials. Just-Rite, Debcon and Allen's entered into a joint check agreement that let Debcon issue checks payable jointly to Allen's and Just-Rite for materials up to the amount of $365,000.

Debcon actually issued [...]

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