United States For The Use And Benefit Of Walton Technology, Inc. v. Weststar Engineering, Inc.
290 F.3d 1199 | Court of Appeals for the Ninth Circuit | 2002
What This Case Means for Subcontractors
Walton Technology, a subcontractor, rented equipment to the prime contractor Weststar on a federal construction project but wasn't paid. The contract had a 'pay when and if paid' clause, which Weststar argued meant Walton couldn't sue until the government paid Weststar. The Ninth Circuit ruled that this clause doesn't eliminate a subcontractor's rights under the Miller Act payment bond. Subcontractors can sue the surety for payment even if the prime contractor hasn't been paid by the government.
Key Takeaways
- •A 'pay when and if paid' clause in your subcontract does not waive your Miller Act rights—you can still sue the payment bond surety directly
- •You do not have to wait for the government to pay the prime contractor before filing a Miller Act claim against the surety
- •Document all work, equipment rental, and delivery carefully to support your Miller Act claim if payment is withheld
A subcontractor need not await government payment before initiating Miller Act action.
Frequently Asked Question
If my subcontract says 'pay when and if paid,' can I still sue the payment bond surety if the prime contractor doesn't pay me?
Yes. A 'pay when and if paid' clause does not eliminate your Miller Act rights. You can sue the surety directly without waiting for the government to pay the prime contractor. The clause must be very clear and explicit to waive Miller Act protections, and courts interpret it narrowly in your favor.
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