Surety May Waive Right to Challenge Claim Against Payment Bond by Failing to Answer Notice of Claim, Even Where Claimant Did Not Submit Proof of Loss or Documentary Support
J.C. Gibson Plastering Co. v. XL Specialty Ins. Co., 521 F. Supp. 2d 1326 (M.D. Fla. 2007)
In this case, a subcontractor gave notice of a payment bond claim to a surety using a 14-page letter that set forth the factual and legal bases for the claim. The subcontractor moved for summary judgment against the surety arguing that the surety waived its right to challenge the subcontractor’s claim because the surety failed to answer that notice of claim within 45 days, as required under the bond. The surety argued in response that the subcontractor’s notice of claim was insufficient because the subcontractor disregarded the surety’s requests for: (i) a “proof of loss,” and (ii) documentary support for the claim. The surety also argued that, to the extent the court may consider the subcontractor’s notice sufficient, the surety’s requests for additional information satisfied the answer requirement under the bond because the requests indicated that the surety disputed the claim.