ConstructionPro Week, Volume: 2 - Issue: 52 - 12/27/2013

Are Claim Notice Requirements Creating Traps for the Unwary?

By Bruce Jervis

 

Once again, there has been litigation involving the sufficiency of a statutory notice. This did not involve electronic communication. It was a rather prosaic and old-fashioned question: To which address should a notice of claim, transmitted by certified mail, be addressed? The Minnesota Supreme Court said the state payment bond statute created a trap for the unwary -- details of which can defeat meritorious claims.

 

The statute in question calls for an unpaid subcontractor on a public works project to submit a notice of payment bond claim to the bonded prime contractor and the surety at the addresses listed on the bond. The contractor listed an address on the bond that differed from the address it used on the subcontract, in its correspondence and on its website. Additionally, the contractor had actual timely notice of the claim because the surety had consulted the contractor in the matter. Nonetheless, the unpaid subcontractor was doomed by the misaddressed notice of claim.

 

Is it reasonable to require such strict compliance with statutory notice requirements? Or, should the statutes be amended to allow greater flexibility? The contractor in this case appeared to have engaged in deliberate subterfuge. The Minnesota Supreme Court, while compelled to strictly enforce the statute, seemed to sense unfairness. What is your opinion?

 

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