SMTD LLP recently obtained a decisive defense victory for a client following a two week arbitration. Without notice to the client, a surety, the public owner re-let a substantial portion of the principal’s work and made a claim to the OCIP carrier to recover the additional completion costs. When the OCIP carrier did not pay for the entirety of the completion costs, the owner terminated the principal and made a demand upon the surety, insisting on full payment of the replacement costs and liquidated damages for the project’s delayed completion. Before the hearing, SMTD successfully brought a dispositive motion to preclude the owner’s right to recover replacement costs from the surety based on the owner’s failure to follow the bond’s notice provisions. The matter proceeded to arbitration on the delay damages and the principal’s affirmative claims. After ten days of arbitration, the arbitrator found the surety was completely exonerated and awarded the surety all of its attorney’s fees and costs.
