Suretyship is an ancient undertaking with records referring to contracts of suretyship dating as far back as 4,700 years ago. The Surety & Fidelity Law Team at Wright, Constable & Skeen brings to bear over 100 years of combined surety and fidelity knowledge and practical expertise for its clients. Our lawyers draw on experiences gained from both working within surety companies and working for surety companies, thereby becoming leaders in surety and fidelity law and garnering a national reputation based on our expertise in the industry. We are active participants in the most prominent legal and industry groups and associations, and have been leaders, speakers, authors and authorities on a wide variety of important topics to the surety and fidelity industry. Our experience and knowledge allow us to provide the most effective representation for our clients throughout the Mid-Atlantic region.
When the principal on a bonded project goes out of business, defaults under its contract, is terminated by the obligee, or simply cannot financially afford to complete the bonded project, claims will inevitably be asserted against the performance bond. The Surety & Fidelity Law Team at Wright, Constable & Skeen has extensive experience in addressing a surety´s performance bond claims, whether assisting the surety in fulfilling its performance bond obligations, in asserting and/or protecting its rights, or in defending the surety in litigation. No matter if the obligee is a federal, state or local governmental obligee under a Miller Act or Little Miller Act performance bond or a private obligee under a form (AIA - A312) or manuscript performance bond, we understand the surety´s obligations, rights and defenses and routinely draft and negotiate takeover agreements, completion contracts, tender agreements, financing agreements and other workout agreements, as well as the related and collateral documents necessary to respond to the circumstances. We understand that speed of response is often critical to avoid larger damage and loss on a bonded project and to protect valuable collateral, including the contract funds, when a default occurs. Our Surety & Fidelity Law Team has the depth of staff to cover all the bases and mitigate potential exposure. We have significant experience handling multi-project defaults spread-out over numerous jurisdictions and the challenges facing a surety who must simultaneously determine the status of each project and address the concerns of the various obligees.
Performance bond claims can be complex and present a great deal of risk and exposure to the surety. Our Surety & Fidelity Law Team understands the issues and works to obtain the best results for our clients.
When the principal on a bonded project fails to pay laborers, subcontractors and/or suppliers, claims will be made against the payment bond. We have extensive experience representing sureties in the claim investigation, resolution and litigation stages of payment bond claims. Working with the principal, obligees and claimants to understand the claims, determine the defenses and other practical concerns that surround such claims, our Surety & Fidelity Law Team offers invaluable experience in investigating, evaluating and valuing claims, and negotiating resolutions. If the claim cannot be fairly and reasonably resolved, litigation may result, and we have the depth of staff, knowledge and experience to represent our clients throughout the Mid-Atlantic region. We have considerable expertise in dealing with the AIA - A312 Payment Bond 45 day response deadline and can counsel and guide our clients in providing proper and timely responses to claims under AIA - A312 Payment Bonds. Our team has litigated all of the issues - pay-if-paid and pay-when-paid clauses, statutes of limitations, failure to provide timely or proper notice under the Miller Act, Little Miller Act or the private payment bond, improper venue, improper claimant, scope of payment bond coverage, damages claimed, delay claims and more.
Experience and familiarity with the local jurisdictions is essential, and we offer exactly that to our clients in responding to payment bond claims.
Our practice regularly includes representing the interests of sureties in all aspects of bankruptcy cases, including automatic stay litigation, financing and executory contract issues, reorganization plans, objections and confirmation hearings, proofs of claims, non-dischargeability actions and litigation over contract funds, including trust funds under Section 541 and fraud under Section 523. We have represented sureties in major national bankruptcy matters and defended sureties from trustees and debtor-in-possession claims and preference litigation. Our experience covers all types of bonded obligations, including commercial, retail and construction bonds, court bonds, custom bonds and other license, permit and miscellaneous commercial surety bonds. Some of our lawyers have developed national reputations in representing the surety in bankruptcy, authoring various papers and texts on the subjects and speaking at numerous conferences. In some cases, bankruptcy must be used as a tool to protect the surety´s rights in collateral or other property, and involuntary bankruptcy becomes necessary; we have represented our clients through that process.
Sureties have many rights and protections under the Bankruptcy Code, and we have the experience to protect and guide our clients through the process.
Suretyship is not insurance! Contrary to risk underwriting in insurance, if the surety incurs a loss, it looks to its principal and indemnitors for reimbursement and to be made whole. In exchange for its agreement to issue bonds for a principal, a surety requires the execution an indemnity agreement, which gives the surety very broad powers and rights with respect to reimbursement for losses, costs and expenses, including attorney´s fees, incurred by reason of having issued the bonds; payment of collateral; access to books and records; holding contract funds in trust; and other rights. In addition to its contractual rights set forth in the indemnity agreement, sureties also enjoy numerous rights under common law, equitable subrogation, exoneration and quia timet. Pursuing and protecting its indemnity and subrogation rights is critical to the surety´s ability to be made whole. The Surety & Fidelity Law Team at Wright, Constable & Skeen is very experienced at aggressively pursuing principals and indemnitors for reimbursement through investigation, asset location, negotiation, temporary restraining orders, injunctions and litigation. In addition, our lawyers are skilled and experienced at pursuing obligees, subcontractors and third parties to recover funds for the surety as subrogee or in its own right.
Over the many years we have been representing surety clients we have been involved with virtually every type of commercial surety bond available. We have represented sureties in matters involving probate bonds, license and permit bonds, utility bonds, customs importer bonds, bail bonds, subdivision bonds, supersedeas and injunction bonds, mortgage broker bonds, tax payment bonds, health care bonds, notary bonds, automobile dealership bonds, and other statutory bonds. We investigate, evaluate and handle claims regarding all manner of commercial surety bonds, advising our clients on the applicable law, rules and regulations governing such bonds and the best manner to resolve claims regarding such bonds.
Groups and Associations
District of Columbia Bar Association
Maryland State Bar Association
American Bar Association - Fidelity and Surety Law Committee
American Bar Association - Forum on the Construction Industry
Defense Research Institute
Surety and Fidelity Claims Institute
National Bond Claims Association
Chicago Surety Claims Association
Baltimore Building Congress & Exchange, Ambassador Committee
Professional Women in Construction - D.C. Chapter
American Bar Association - Public Contract Law Section
Federal Bar Association
Board of Contract Appeals Bar Association
Associated Builders & Contractors - Baltimore Metro Area
Washington Building Congress
American Subcontractors Association
Associated General Contractors
The Surety & Fidelity Team Publications and Seminars
Performance Bond Issues
Co-Author, "The Performance Bond Surety´s Rights to the Contract Funds," Chapter 4 of THE LAW OF PERFORMANCE BONDS, 2D ED (Lawrence R. Moelmann, Matthew M. Horowitz and Kevin L. Lybeck, eds) (2009).
Author, "The Surety Performance Bond Lifeboat - Bailing Out and/or Salvaging Someone Else´s Wreck" (2007), republished as "A Primer for the Surety´s Handling of Performance Bond Claims" (2008).
Co-Presenter: Hot Topics For The Performance Bond Surety, Northeast Surety & Fidelity Claims Conference, New Jersey 2008;
Contributing Author to The Performance Bond Manual (Maryland section). Tort and Insurance Practice Section, American Bar Association (Lawrence Lerner and Theodore M. Baum, Eds. 2006).
Author, The Surety and the Federal Government: Negotiating a Minefield, Surety Claims Institute (2005);
Co-Author, "Financing the Principal," Chapter 4 of the BOND DEFAULT MANUAL, 3D ED (Duncan L. Clore, Richard E. Towle and Michael J. Sugar, Jr., eds.) (2005).
Co-Author, "The Financing Surety as a Performing Surety - Law and Practice" (2003).
Co-Author, "The ABC´s of the Surety Claims Process" (primarily the surety´s financing of the principal) presented to the Construction Industry CPAs/Consultants Association (CICPAC) (2003).
Editor for the Surety Program Written Materials for TAKEOVER BY THE SURETY, 2002 ABA/TIPS Fidelity and Surety Law Committee Spring Program in New Orleans, Louisiana in May, 2002.
Chair and Moderator, "Takeover by the Surety: The Obligations That You Forget About (and Wish You Hadn´t)" (1999).
Co-Author, "The Surety and the Court of Federal Claims" (1995) and "The Surety and the Court of Federal Claims - Revisited" (1999).
Payment Bond Issues
Contributing Author to The Payment Bond Manual, Third Edition (Maryland section). Tort and Insurance Practice Section, American Bar Association (Wayne D. Lambert, Todd R. Braggins, and J. Blake Wilcox, Eds. 2006).
Author: Perils and Pitfalls in Payment Bond Claims, A Discussion of Unusual Case Law, Northeast Surety & Fidelity Claims Conference, New Jersey 1997.
Bankruptcy Issues
Author, "Surety Underwriting and Claims Handling With a Principal in Bankruptcy" (2009).
Author, "The Surety´s Claim in Bankruptcy - Obtaining Reimbursement for the Surety´s Loss" (2009).
Author, "Money and Time - The Critical Issues in Construction Industry Bankruptcies" (2009).
Author, "The Principal´s Bankruptcy: What You Really Need to Know" and "The Surety´s Strategy and Rights When the Principal Files for Bankruptcy" (2009).
Author: Do You Have Trust Issues? The Surety´s Use of Trust Fund Rights in Bankruptcy, Surety Claims Institute 2009;
Author, "The Surety´s Proof of Claim - Obtaining Reimbursement for the Loss" (2008).
Author, "The Surety´s Proof of Claim and Obtaining Reimbursement for the Surety´s Loss" (2005).
Author, "The Principal´s Sale of Substantially All of Its Assets in Bankruptcy - Who, What, Where, When, Why, and How, and the Rights of the Surety" (2002).
Co-Author, "The Principal´s Bankruptcy - Practical Problems and Potential Solutions in Handling Payment Bond Claims" (2001).
Co-Author, "The Surety´s Rights to the Contract Funds in the Principal´s Chapter 11 Bankruptcy Case," 35 TORT & INS. L.J. 1 (1999).
Indemnity/Subrogation/Salvage Issues
Co-Editor, THE SURETY´S INDEMNITY AGREEMENT - LAW & PRACTICE, 2D ED (2008).
Contributing Author, SURETY´S INDEMNITY AGREEMENT - LAW & PRACTICE, 2D ED (2008), Chapter 3, Tort and Insurance Practice Section, American Bar Association (Marilyn Klinger and George J. Bachrach, Eds. 2008).
Author, "Avoiding Loss and Obtaining Reimbursement in the Event of Loss Under the Indemnity Agreement" (2005).
Co-Presenter: Salvage Investigation - Resources and Options, Northeast Surety & Fidelity Claims Conference, New Jersey 2005;
Co-author, "The Surety´s Subrogation Rights," Chapter 23 of THE LAW OF SURETYSHIP, 2D ED (Edward G. Gallager, ed.) (2000).
Editor, SALVAGE BY THE SURETY (1998).
Author, "The Surety´s Rights to Obtain Salvage - Exoneration, Reimbursement, Subrogation, and Contribution," Chapter 1 of SALVAGE BY THE SURETY (George J. Bachrach, ed.) (1998).
Co-Author, Pursuit of the Surety; Rights Against a Principal and Indemnitors when the Surety Settles Claims Requiring Future Performance, Surety Claims Institute (1996).
Editor, THE SUBROGATION DATABASE: CASES CONCERNING THE SUBROGATION RIGHTS OF THE CONTRACT BOND SURETY (1995), updated on January 31, 1998.
Editor, SUBROGATION RIGHTS OF THE CONTRACT BOND SURETY (1990).
Editor, THE AGREEMENT OF INDEMNITY: PRACTICAL APPLICATIONS BY THE SURETY (1989).
Co-Author, "The Agreement of Indemnity - The Surety´s Handling of Contract Bond Problems: The Enforcement of the Surety´s Rights against the Principal and the Indemnitors under the Agreement of Indemnity" (1989).
Miscellaneous Surety Issues
Co-Author: Federal and State Regulatory Structures for Public-Private Partnerships, Presented at the ABA Mid-Winter Meeting of the Fidelity and Surety Law Committee, New York 2009;
Co-Author: "A Primer on the Tucker Act" (Surety Claims Institute Annual Meeting in June, 2008).
Author: "Consultant and Expert Witness Claim Files: Are They an Open Book?" (18th Annual Northeast Surety and Fidelity Claims Conference in September, 2007).
Co-Author: Fundamentals of Electronic Discovery and the New Federal Rules, Northeast Surety & Fidelity Claims Conference, New Jersey 2007;
Author: The Surety´s Reservation of Rights, Northeast Surety & Fidelity Claims Conference, New Jersey 2006;
Author: Look Who´s Bringing Home The Bacon - How Recent Decisions Interpreting the Davis-Bacon Act Can Negatively Affect The Surety, Northeast Surety & Fidelity Claims Conference, New Jersey 2003;
Author: "The Surety´s Use of Prompt Payment Statutes to Obtain Control of Contract Funds," presented at the Northeast Surety & Fidelity Claims Conference, October, 1998.
Author, "Customs Bonds and the Chapter 11 Principal" (1994).
Co-Author, CONTRACT SURETY (AFSB 152), Chapters 12 and 13 entitled "Contract Surety Claims" for the American Institute for Chartered Property Casualty Underwriters and the Insurance Institute of America (1992).
Fidelity Issues
Co-Author, Overview and Introduction to the 1986 Form 24 Financial Institution Bond, Tort and Insurance Practice Section;
Contact Attorneys | Useful Links