United States Ex Rel. J.H. Lynch & Sons, Inc. v. Travelers Casualty & Surety Co. of America
783 F. Supp. 2d 294 | District Court, D. Rhode Island | 2011
What This Case Means for Subcontractors
J.H. Lynch & Sons, a subcontractor on a Navy project, sued the general contractor's surety for unpaid work totaling over $575,000. The general contractor had included a pay-when-paid clause in the subcontract, which the surety argued blocked Lynch's claim. The court rejected this argument and ruled that pay-when-paid clauses cannot prevent subcontractors from pursuing Miller Act claims against sureties. This decision protects subcontractors' federal payment bond rights regardless of what their subcontracts say.
Key Takeaways
- •Pay-when-paid clauses in your subcontract cannot stop you from suing the payment bond surety under the Miller Act—your federal rights override contract language
- •If you work on a federal project and don't get paid, pursue the surety directly; don't let the general contractor hide behind contract terms
- •Document all work completion dates and unpaid invoices carefully, as these are critical to proving your Miller Act claim against the surety
A pay-when-paid clause does not foreclose a subcontractor's Miller Act claim.
Frequently Asked Question
Can a pay-when-paid clause in my subcontract prevent me from suing the surety for unpaid work?
No. This court ruled that pay-when-paid clauses do not block Miller Act claims against sureties. Your right to pursue the payment bond is a federal right that cannot be taken away by contract language between you and the general contractor or subcontractor above you. If you complete work on a federal project and aren't paid, you can still sue the surety directly.
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