Prejudgment interest against a surety: recoverable but from when?

06/01/2011

Neither the Miller Act nor the Little Miller Act have specific provisions for the recovery of prejudgment interest if a claimant prevails on a bond claim. Absent contractual language in a commercial bond, it’s the same result. However, case law generally holds that in such actions state law on prejudgment interest applies.

Virginia statute allows for prejudment interest in the discretion of the fact finder. Considering that, the recent opinion of Judge Trenga in Attard Industr., Inc. v. United States Fire Insur. Co., No. 1:10cv121 (EDVA, Alex. Div. Nov. 9, 2010) concluded that prejudgment interest may only run against a surety from the date of demand made against the surety by the claimant.

Judge Trenga concluded that date sufficiently compensates the claimant without unfairly penalizing the surety. As a result, if you are a claimant, the lesson learned is to promptly make demand upon the surety to start the prejudgment interest clock.

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