Federally owned construction projects are covered by a Miller Act Payment Bond for the benefit of the subcontractors and suppliers thereof. If you make a claim for payment under the Miller Act, you may, under certain circumstances, also have a claim for attorney fees and interest. The text of the Miller Act is silent with respect to attorney fees and pre-judgment interest. However, federal common law allows the recovery of both under certain circumstances.
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Collecting Attorney Fees for Lien and Bond Claims
Previously, Texas law provided that a court “may” award costs and reasonable attorney fees in a suit to foreclose a lien, enforce a payment bond claim or declare a lien to be invalid to the extent that such costs and reasonable attorney fees were “equitable and just”. The use of the word “may” allowed courts discretion over whether to award a lien claimant his or her attorney fees. This led to unfair results. Even lien claimants who prevailed did not always receive their attorney fees and/or costs.
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Why Delivery Tickets Matter
Paperwork can win or lose a lawsuit. This is especially so in
construction litigation. To be entitled to a lien, bond, or any other claim for payment for materials delivered to a construction project, you are not required to show the materials you furnished were installed on the project. However, you must show the materials
Federal Payment Bond Claims
The Miller Act requires a payment bond on federally owned projects where the prime contract is in excess of $100,000. If you–a subcontractor or supplier–have a contract or account directly with the general contractor, you are covered. If you do not have a direct contract with the general contractor, you are protected only if the
Private Payment Bonds: The Basics
A general contractor on a privately owned project may provide the owner with a payment bond. Although these payment bonds are not required under Texas law, many owners require general contractors to post payment bonds so the owner can avoid lien claims against the owner and the owner’s property. You may perfect a claim against
Texas Public Payment Bond Claims: Just as Good as a Lien
You cannot lien public real property. Instead, you have a claim against a payment bond obtained for the project you furnished labor or materials to. For the construction, alteration, or repair of a public building or public work (i.e., land owned by a “Governmental entity”) in which the prime contract is in excess of $25,000
Rights and Remedies to Help Subcontractors and Suppliers Collect Payment
Nonpayment is the biggest threat to most subcontractors’ and suppliers’ bottom lines. Nonpayment frequently occurs in the construction and oil and gas industries because most goods and services are sold on credit. C.O.D. sales are uncommon and payment upfront is almost unheard of. Because of this practice, nonpayment is one of the most common legal