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Next step after Bond Claim

Minnesota

We filed a Claim on Bond on 11/01/2022. tn e the last date we furnished labor/material was on 04/28/2022. The bonding company has pushed off the bond claim stating that this is a bone fide dispute between parties. The Contractor is holding our money and is refusing payment on this public project. What is our next step to enforce the Claim on Bond? Thank you

3 replies

Mar 9, 2023
The next step would be to commence a lawsuit against your customer and their bonding company. However, the bonding company will probably argue that your bond claim was untimely (Minnesota law requires a bond claim to be filed no later than 120 days from the last date of work), and based on the facts in your summary, they would probably be correct. Therefore, you would probably be left with a breach of contract claim against the owner. You could have an attorney send a demand letter, and then follow up with a lawsuit for breach of contract.
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Mar 9, 2023

Without more information, it is impossible to provide you legal advice you can or should rely on. It sounds as if the surety is telling you there needs to be a resolution to the bone fide dispute before it can act. That means you need to prove up your claim and have it determined that you’re entitled to be paid. This generally requires some sort of dispute resolution process be it litigation, arbitration, or some other form of binding dispute resolution. Once your claim is confirmed, should the other party still not pay, then the surety is more likely to release the funds to you.

These claims are often time bound. Because you are fast approaching one year from the last contribution of materials and labor, you should talk with an attorney knowledgeable about bond claims before you lose your right to pursue your claim under the bond.

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Mar 9, 2023
You need to sue on the bond claim ASAP! It is possible there is a one year deadline. And of course sue the company who owes you the money as well.
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