Heldenfels Brothers, a concrete subcontractor, delivered materials to a city recreation center project. The general contractor abandoned the project and went bankrupt after the city discovered the payment bond was fraudulent. The Texas Supreme Court ruled that cities have no legal duty to verify a general contractor's bond is legitimate, and subcontractors cannot sue the city for payment when the general contractor fails—even if the bond turns out to be fake.
Do not rely on the city or project owner to verify the general contractor's payment bond. Request and independently verify the bond yourself before starting work.
When a general contractor abandons a project, you cannot recover from the municipality through quantum meruit, unjust enrichment, or negligence claims—your only recourse is against the contractor and its bond.