WASHINGTON/OREGON DOCTRINE OF EQUITABLE SUBROGATION: ARE INDEMNITY AGREEMENTS NECESSARY?
Surety Law Update Spring 2018 In recent years, some sureties have waived the need for a signed indemnity agreement usually for smaller, commercial bond accounts. This decision usually is based on underwriting and business considerations designed to make the bonding process easier for the producing agent. This article briefly discusses considerations of this industry movement...
WASHINGTON COURT OF APPEALS DISMISSES OREGON CONTRACTOR’S LAWSUIT FOR FAILURE TO SUBSTANTIALLY COMPLY WITH CONTRACTOR REGISTRATION REQUIREMENTS
Surety Law Update Spring 2018 In a recent unpublished opinion, in HNS, Inc., v. Eagle Rock Quarry, No. 34695-1-III, 2018 WL 1617071, (Wash. Ct. App. Apr. 3, 2018), Division Three of the Washington Court of Appeals dismissed an Oregon contractor’s lawsuit against a Washington contractor, and its license bond, because the Oregon contractor failed to...
PROPOSED AMENDMENT TO THE WASHINGTON PUBLIC WORKS STATUTE
Surety Law Update Spring 2018 In early 2018, Senate Bill 6428 and its counterpart, House Bill 2852, were introduced for consideration amending RCW 39.04.240, which provides for the awarding of attorney fees for an action arising out of a public works’ project. The introduction of both SB 6428 and HB 2852 is an apparent response...
FMCSA Form BMC-84 Bond Claims
Surety Law Update Winter 2017 In October 2013, Public Law 112-141 (commonly known as “Moving Ahead for Progress in the 21st Century Act” or “MAP-21”) went into effect under the auspices of the Federal Motor Carriers Safety Administration (FMCSA) which, among other things, increased the security requirement for Freight Forwarders and Freight Broker from $10,000.00...
Washington’s New Uniform Power of Attorney Act: Surety Underwriters Beware
Surety Law Update Winter 2017 A power of attorney is an incredibly powerful document that permits an individual (the “principal”) to appoint someone (the “agent” or “attorney-in-fact”) to act on the principal’s behalf. In the context of the surety-principal/indemnitor relationship, sureties rely heavily on power of attorney clauses included in general indemnity agreements (“GIA”) in...
Judgment Lien May Survive A Chapter 7 Discharge
Surety Law Update Winter 2017 In general, a Chapter 7 bankruptcy results in a discharge of pre-petition debts owed by an individual debtor. Certain obligations, however, may survive the Chapter 7 discharge order. One example is a perfected judgment lien. Even though the underlying claim for damages against an individual debtor may be discharged, a...
Amendments to Washington’s Retainage Statute Expose Sureties to Additional Risk
Surety Law Update Summer 2017 In February 2017, the Surety Team at Williams, Kastner & Gibbs wrote an article regarding a proposed amendment to Washington’s retainage statute, RCW 60.28.011(6). House Bill 1538, which became effective on July 23, 2017, was largely supported and advanced by subcontractor trade groups in an effort to relieve cash flow...
Washington Supreme Court Decision Exposes Sureties to Increased Risk for Disputing Claims
SURETY LAW UPDATE SUMMER 2017 On July 6, 2017, the Washington State Supreme Court addressed two important issues for sureties in Washington: (1) whether extending statutory attorney fees to public works projects provides the sole fee remedy for those projects; and (2) whether the fees between King County’s claims against the principal and sureties could...
Washington State Court of Appeals Misstates Basic Surety Law Involving Release of Lien Bond Claim
Surety Law Update Summer 2017 Washington’s Release of Lien Bond statute, RCW 60.04.161, allows a property owner or contractor to “release” real property from a construction lien, prior to the lien claim being resolved, by issuing a release of lien bond. Recording the bond does not destroy the lien entirely, but instead transfers the lien...
Washington Supreme Court Limits the Scope of the Insurance Fair Conduct Act
Surety Law Update Spring 2017 Recently, the Washington Supreme Court narrowly interpreted the Insurance Fair Conduct Act (“IFCA”), limiting the scope of conduct that constitutes a violation under the act. In Isidoro Perez-Crisantos v. State Farm Fire & Casualty Company, the Court determined whether a violation of the insurance regulations under the Washington Administrative Code...
Washington State Legislative Alert: 2017 Regular Session
Surety Law Update Spring 2017 On January 17, 2017, the Senate introduced Bill No. 5222 for referral to the Committee on Commerce, Labor & Sports for consideration. Senate Bill 5222 proposes changes to Washington’s retainage statute, RCW 60.28.011(6), which would require a contractor on a public improvement project, at the request of a subcontractor, to...
Williams Kastner assists surety in defeating indemnitor’s bad faith and CPA counterclaims.
Surety Law Update Summer 2016 Williams Kastner’s Construction Litigation & Surety Practices Team is proud to announce that it recently assisted one its surety clients in defeating what is believed to be one of the largest extra-contractual claims ever asserted by an indemnitor against a surety in the State of Washington. Please click here to...