Additional Insured Coverage and No Fault Named Insured Policyholder

Special thanks for this article from Steven Schreckinger at Anderson Kreiger.   Today is an article about coverage for an additional insured in what is a rare situation as the named insured is deemed without fault.

Mississippi Contractor Payment and Mechanic’s Liens

Harper Whitwell PLLC is a law firm which stands firm in its belief that the construction industry is the backbone of our economy.  We strive to keep contractors compliant with state and federal regulatory requirements and advocate the prompt payment for services rendered.   Like many other states, Mississippi allows for recovery of sums owed to contractors on non governmental projects via the mechanic’s lien.  This article will focus on seven procedural formalities which place the burden on the contractor to follow as contractors and material supplier have rights “only to the extent that they have brought themselves within the terms of the statute.” Riley Blg. Suppliers, Inc. v. First Citizens Nat’l Bank, 510 So.2d 506, 508 (Miss.1987).

To discuss this or any other construction matter, please contact us today.  The remainder of this article will focus on the 7 absolute requirements set forth by the mechanics lien statute.

1).  A contractor must be in substantial compliance with its duties under the subject contract.  See  King v. Hankins, 209 So.2d 190, 191 (Miss. 1968) 

  1.  File Notice and Claim within 90 days of work performed or materials furnished

  2.  Notice and Claim must include the amount due and due date of the claim and be filed within the Court of Chancery where the property is situated. See § 85-7-405

  3.  Once the lien is filed, a contractor must send notice within two business days to the owner and contractor.

  4.  File a payment/lien action within 180 days or 90 days if owner contests.

  5.  Be compliant with applicable licensing requirements

  6.  Commence lawsuit with concurrent notice of Lis Pendens.

These are basic requirements which should only be relied on in the proper context, and with further explanation by a lawyer.    Please contact Clay Olson or James Harper for free consultation.

OSHA Silica Regulations are Now Decided; Compliance Deadline Extended

The U.S. Occupational Safety and Health Administration’s (“OSHA”) new rule for respirable crystalline silica was finalized this past Summer, while  compliance obligations under the new rule start on June 23, 2018.

The new silica rule reduces the permissible exposure level (PEL) for employees and creates many new requirements for businesses. Companies will be required to implement engineering and work practice controls which may be burdensome.   With the new rule’s requirements for engineering and work practice controls, the economic impact to businesses could be harsh if preparations are not in place.

As the deadline approaches, your construction company should not delay preparation.   The full text of the rule can be found here:

The Miller Act and Suppliers

If a material supplier is not compensated for goods delivered properly to a construction site, there are remedies available.  

Before suing on the bond, it is important to review all terms and conditions.

Certified Copy of Payment Bond

If a supplier of materials on a federal project has not been paid they can request a certified copy of a payment bond.  The request must be accompanied with an affidavit which swears a) payment is due and unfulfilled or b) that the person is being sued on the bond. 

Suit on Bond
If a supplier has not been paid within 90 days  of furnishing conforming and required materials, the supplier may bring a civil action on the payment bond covering the unpaid portion of his/her contract. If materials were actually used on another job, there are rights under the Miller Act but limited exceptions might apply.
A second-tier claimant has similar bond rights and must follow similar procedures.

 In the United States District Court in which the contract was to be performed or executed.

One Year Statute of Limitations

If a civil action under the Miller Act is to be filed, it must be presented no later than one year after the labor or material was performed or furnished.
Waiver Clause:

A waiver clause is strongly disfavored as some contractors have attempted to include waiver of Miller Act rights by suppliers.  In some cases after contracting to supply materials, a waiver can be accomplished when accompanied by consideration.


Payment Bonds Under the Miller Act

Last week we briefly discussed the Miller Act and performance bonds.  A payment bond is different from a performance bond in that it provides a form of collateral for unpaid subcontractors and material suppliers who provide labor and/ or materials on federal construction projects.   Because these downstream subcontractors and material suppliers do not have lien rights on governmental projects, the payment bond works as a substitute for lien rights over real property.  The payment bond effectively stands in place of the real property for purposes of security

The primary public policy purpose of the Miller Act payment bond is to replace the security normally provided by the lien right which attaches to real property.  Instead of foreclosing on the mechanics lien, a claim or suit on the bond is made.

Our next discussion will focus on the Miller Act in South Carolina.



The Miller Act and Performance Bonds

The Miller Act, 40 U.S.C. §§ 3131–3134, provides that, before any contract for the construction, alteration, or repair of any public building or public work of the United States of more than $150,0…

Source: The Miller Act and Performance Bonds

The Miller Act and Performance Bonds

The Miller Act, 40 U.S.C. §§ 3131–3134, provides that, before any contract for the construction, alteration, or repair of any public building or public work of the United States of more than $150,000 (increased fris awarded to any person, that person (usually the general contractor) must furnish:

(1) A performance bond in an amount the contracting officer considers adequate for the protection of the United States;

The United States and federally created bodies such as GSA are the beneficiaries of the performance bond piece.  If an awarded prime contractor defaults in the performance of its work or is terminated for cause, the United States may turn to the surety to step in and take over the general contractor’s obligations under the prime contract.  Bond language allows the surety to bring another qualified entity to finish the work, at the surety’s expense on behalf of citizens.