General Contractor is Necessary Party to Suit on Bond Bonding Off Mechanic’s Lien

11/09/2012

Virginia’s mechanic’s lien code makes provision for a mechanic’s lien to be bonded off by a surety, and for suit thereafter to brought against the sureties on the “bond off” bond per Virginia Code Sec. 43-71. The statute does not address whether the principal under the bond, typically the general contractor, is also a necessary party to an action under that statute against the surety; however, Judge McCahill of the Twentieth Judicial Circuit of Virginia recently ruled that the principal / general contract is a necessary party. The case is ADS Construction, Inc. v. Bacon Construction Co., CL-74720, Loudoun County, October 18, 2012, VLW 012-8-173.

In it, Bacon Construction bonded off ADS Construction’s mechanic’s lien, and the bond replacing the mechanic’s lien was posted by Westfield, as surety, and Bacon Construction, as principal. ADS Construction subsequently brought suit against Westfield and Bacon Construction, but is bond action only asserted claim against Westfield, and not Bacon Construction. Westfield demurred to the bond claim on the grounds that Bacon Construction was a necessary party to the claim against the bond. Although the statute does not address naming the bond principal or general contractor as a party to such a bond action Judge McCahill agreed with Westfield, and sustained the demurrer; relying upon several Virginia Supreme Court cases, including principally Walt Robbins, Inc. v. Damon Corp., 232 Va. 43 (1986) and George W. Kane, Inc. v. NuScope, Inc., 243, 503 (1992). He also refused to allow ADS Construction to amend because more than the requisite six months had already expired under Virginia Code Sec. 43-17.

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