Yesterday, the Minnesota Court of Appeals held that strict compliance with payment bond notice requirements are essential and even a minor defect in service cannot be waived. In Safety Signs, LLC, the payment bond claimant timely sent a notice of the payment bond claim to the general contractor’s primary business address, but not to the address listed for the general contractor in the payment bond. The Court of Appeals held: (1) the surety could challenge the payment bond claim based on defective service on the general contractor; (2) this defect is fatal to prosecution of a payment-bond claim; and (3) the defect cannot be waived even though both the surety and general contractor accepted service of the notice.
The Court of Appeals’ decision serves as an important reminder to all bond claimants that strict compliance with the specific notice requirements set forth in Minn. Stat. 574.31, subd. 2(a) is required. Although the notice was timely and received by the surety at the appropriate address, the defect in the service on the general contractor was fatal to the entire claim.
To read the full decision, click here.
Bond Claimants Beware
September 19, 2012