Electrical Contractor Not Paid for Installation of Traffic Control Devices: Bonding Company Green-Lights Payments After Bond Claims Made; Client Collects $462,000

StoplightOur client, an electrical subcontractor, was owed money for work performed on three public-works projects. The work involved the installation of traffic control devices, traffic control cabinets, light poles, and other electrical and traffic-related devices. The general contractor with whom our client contracted refused to pay our client for the work, despite having received payment for some of our client’s work from the project owners.

Because the work involved public entities, the general contractor was required, prior to the start of each job, to post a bond to assure payment to its subcontractors. As an unpaid subcontractor, our client was able to make claims against the general contractor’s payment bonds.

After the claims were made, we dealt primarily with the bonding company in connection with the non-payment claims. The general contractor contended that our client failed to complete all of the work and, with respect to the completed work, failed to do it in a timely manner. The general contractor claimed it was assessed liquidated damages by the owners, due to delays caused by our client. Our client denied the general contractor’s contentions. Prior to the filing of a lawsuit, the parties agreed to participate in an informal settlement conference.

An out-of-court settlement was reached, pursuant to which the bonding company agreed to pay our client $462,292 for unpaid invoices, interest and attorney fees.

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