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Sub's Miller Act Right To Sue A Surety Isn't A Right To Dodge Dispute With The Contractor

Friday, February 12, 2010 03:04 am


Arbitration - Miller Act

United States f/u/b Milestone Tarrant, LLC v. Federal Insurance Company

A subcontractor tried -- and failed -- to take a shortcut to delay damages recovery by suing the surety who furnished the contractor's payment bond.

General contractor Manhattan Construction Corporation (Manhattan) hired Milestone Tarrant, LLC/Highland Ornamental Iron Works, Inc., a joint venture (Milestone) as a subcontractor on a federal construction project to enhance the Capitol Visitor Center in Washington, D.C. The project took three years longer than planned to complete. Milestone alleged that it spent more than $16 million finishing the project because of the delay and that Manhattan had only paid it $11 million.

Seeking recovery, Milestone sued Manhattan's surety, Federal Insurance Company (FIC), under the Miller Act. [...]

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