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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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This is Surety/Construction Law Question: A client is unhappy

Customer Question

This is Surety/Construction Law Question:

A client is unhappy with work. She fires contractor. Gives no opportunity to remedy. Creates huge list of things she says is wrong. Takes bids, hires others, gets work done. Files complaint to contractor's board- they give warning (listed expired license on paperwork - refile was in works). She files claim against bonding company - they investigate and offer $550 settlement. She takes it. She files claim on a bond that wasn't activated until a full 7 weeks after she terminated the project. Does that bonding company have any obligation to even look at her claim? Also she filed small claims suit a few days before she filed the bond cliam. Seems like she can't triple dip like that... especially going after small claims at same time she has an active claim with bonding company.
Questions are 1) Does bonding company activated after project was terminated have any obligation? and 2) Did she do something wrong by filing that claim while simultaneously filing small claims?
Submitted: 4 years ago.
Category: Legal
Expert:  Dimitry K., Esq. replied 4 years ago.

Thank you for your question. Please permit me to assist you with your concerns.

In terms of the bonding company having or not having obligation, that comes down to how the bond was issued--if they agreed to cover past projects also, then the bonding company could choose to cover this type of claims. But she then cannot also file a claim against the subsequent bonding company since she already received a settlement for losses (unless I am mistaken, from your facts it appears she filed a claim to two bonding companies and via small claims).

She did not do anything wrong by filing suit in small claims or against the bonding company. Both of those options are valid and can be pursued concurrently. But as each cause of action covers the same alleged breach, the collection for her losses can occur only once. That is why the contractor, in small claims, can show that the person already received a payout settlement and use that as evidence that the injury, if there was one, has been paid for. Similarly the subsequent bonding company can do the same.

Good luck.