Offsite “Subcontractor” Found a Claimant Under Virginia Little Miller Act Bond

09/10/2012

In a recent decision, Judge Harris of Hanover County Circuit Court allowed a Little Miller Act claim to proceed by an offsite disposal yard as a payment bond claimant. The case is Yard Works, LLC v. GroundDown Constructors, LLC, and Safeco Insurance Company of America, Hanover Circuit Court Case No. CL11001781-00.

The plaintiff-claimant, Yard Works, LLC (Yard Works) received land-clearing debris from the project at an off-site facility. When Yard Works was not paid, it filed suit, including a Little Miller action claim against the prime contractor’s surety, Safeco Insurance Company of America (Safeco).

Safeco filed a demurrer to Yard Works’ complaint (roughly speaking, this is Virginia’s version of a motion to dismiss a complaint for failing to state an actionable claim), arguing that the action should be dismissed because Yard Works had not supplied labor or materials. Judge Harris disagreed and dismissed the demurrer.

The main bases for his ruling dismissing the demurrer were: 1) that the Little Miller Act was remedial in nature, and so construed in favor of claimants and against sureties; and 2) that Yard Works’ acceptance of debris, even though offsite, was part of the necessary obligations of the prime contractor in fulfilling the contract requirements.

He thus found Yard Works a claimant for purposes of overruling the demurrer. This ruling allows Yard Works to proceed against Safeco, and try and prove recoverability otherwise under the payment bond for the project. Whether Yard Works can ultimately prevail, or Safeco chooses to appeal this decision remains to be seen.

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