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Can a bond company just pay someone without giving any notice to the principal?

CaliforniaBond Claims

A plantiff (General Contractor), sues another GC (GC 2).. then adds whoever he can find that can be associated with that person including every bond company who has ever issued a contractors bond to them. GC 2, hires the bond company a lawyer and is paying the fees to honor his indemnity agreement. the bond company wants out of the law suit so they decide to talk directly to the plantiff's attorney and negotiate a settlement of 15k. the bond company pays the 15, the plantiff dismisses the bond company but does not report the settlement to the judge.. the bond company does not notify the principle in any way. it takes about 3 months for GC2 to find out, which only happened because the CSLB suspends his license for not re paying a bond.. it takes another 5 months to get an invoice from the bond company with the amount owed. the court case proceeds and the plantiff's lawyer drops him, the plantiff files to dismiss all parties and closes the case to avoid trial. (it was a shake down from the start and GC2 wouldnt play the game and won because of it). does the surety have the right to collect even a penny? this seems very illegal and unethical

1 reply

Apr 18, 2023
Thank you for reaching out to the Levelset legal community. If you are in need of specific advice for a current legal situation, you may want to consider reaching out to a licensed attorney in your state directly at their office. This forum is public, so it may not be the right place to discuss a sensitive legal issue. Levelset provides a list of attorneys in each state here: https://www.levelset.com/payment-help/experts/experts-by-state/ . From that directory you may find a law firm in your area to call privately.
 
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