1950 OLD GALLOWS ROAD, SUITE 750
VIENNA, VA 22182
PHONE: 703.506.1990   FAX: 703.506.1140
EMAIL: INFO@BRIGLIALAW.COM

slogan2.gif
MARYLAND AND DC COURTS HOLD THAT DISPUTE RESOLUTION CLAUSE IN PRIME CONTRACT DOES NOT REQUIRED STAY OF SUBCONTRACTOR’S PAYMENT BOND SUIT. PDF Print

(November 6, 2016) - In two recent cases in the U.S. District Courts for the Districts of Maryland and the District of Columbia, the federal courts both held that dispute resolution clauses contained in the contracts between the owners and general contractors do not require subcontractors to wait indefinitely until the general contractor and owner have resolved their disputes in order to proceed with their Miller Act lawsuits.

First, in Clark Construction Group, LLC v. United States ex rel. Tusco, Inc., No. PJM 15-2885, 2016 WL 4269078 (D.Md. Aug. 15, 2016), a payment bond surety moved to stay the subcontractor's Federal Miller Act claim due to a dispute resolution provision located in the subcontract. For owner-caused issues, the subcontract required the subcontractor to first submit its claim to the general contractor, who would in turn review and determine whether to submit the claim to the owner or permit the subcontractor to pursue the owner under the general contractor's name. The court denied the stay, finding that the Miller Act trumped any dispute resolution clause that constrained the subcontractor's expeditious right of action against the payment bond surety guaranteed by the Miller Act. The surety's argument that the refusal to stay could create inconsistent results and duplicative litigation did not overly concern the court, as a more troublesome result would occur if the subcontractor were required to wait indefinitely for payment.

Second, in District of Columbia ex rel. Strittmatter Metro, LLC v. Fidelity & Deposit Co. of Maryland, No. 15-2114, 2016 WL 5108021 (D.D.C. Sep. 20, 2016), a payment bond surety moved to dismiss or stay a subcontractor's D.C. Little Miller Act claim due to a dispute resolution clause that required the subcontractor to wait for the prime contractor to resolve its claims with the District of Columbia government. As in Clark Construction, the Strittmatter Metro court rejected the surety's argument, noting that not only does the subcontractor lack any control over the recovery efforts made by the general contractor, but a dismissal or stay would run counter to the express purpose of the Little Miller Act - to provide a prompt remedy to any aggrieved subcontractor. Both Strittmatter Metro and Clark Construction emphasized that no provision in a subcontract – be it a pay-if-paid clause or a dispute resolution clause – could operate to delay a subcontractor's right to a speedy resolution of its claim under the statutory ambit of the Federal Miller Act and corresponding Little Miller Acts.

 

News

RECENT DECISION HIGHLIGHTS THE BENEFITS THAT QUALIFIED MECHANIC’S LIEN COUNSEL CAN PROVIDE TO LIEN CLAIMANTS.

(June 26, 2017) - Earlier this month, the Virginia Supreme Court issued a mechanic’s lien decision that underscores the benefits of having a qualified mechanic’s lien attorney prepare and file ...

More

SHANNON J. BRIGLIA CO-AUTHORS ARTICLE IN TORT TRIAL & INSURANCE PRACTICE LAW JOURNAL.

(May 1, 2017) – Shannon J. Briglia has co-authored an article for the Winter 2017 edition of  the American Bar Association’s Tort Trial & Insurance Practice Journal titled: “Recent Developments ...

More

BRIGLIAMCLAUGHLIN OBTAINS COMPLETE RECOVERY ON SUMMARY JUDGMENT FOR SURETY CLIENT.

(March 31, 2017) - On March 7, 2017, BrigliaMcLaughlin obtained summary judgment on behalf of a surety client in the case Developers Surety and Indemnity Company v. Belcher, et al., ...

More
©2014 BrigliaMcLaughlin, PLLC - View Disclaimer
Law Firm Web Design by The Modern Firm