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Eleventh Circuit Holds That the Statute of Limitations on Payment Bond Claim Under Georgia Law Commences at Substantial Completion Rather Than Final Acceptance

Strickland v. Arch Ins. Co., No. 17-10610, 2018 U.S. App. LEXIS 504 (11th Cir. Jan. 9, 2018)

Author: Jane Fox Lehman

3/01/2018

Read the full post at Constructlaw

Eleventh Circuit Holds That the Statute of Limitations on Payment Bond Claim Under Georgia Law Commences at Substantial Completion Rather Than Final Acceptance

Strickland provided sand to a paving company (Douglas) for a Georgia Department of Transportation (GDOT) road improvement project (the Project). Arch Insurance Company (Arch) issued payment and performance bonds on Douglas’s behalf. In 2007, GDOT declared Douglas in default and removed it from the Project. In accordance with the performance bond, Arch arranged for a third-party contractor to complete Douglas’s work on the Project. Strickland did not supply sand after Douglas’s removal.

In August 2010, GDOT determined that the Project was substantially complete, and in September 2010, performed final inspection and generated a punch list. Arch’s contractor completed the punch list by September 2011. In March 2012, GDOT accepted Project maintenance responsibilities because the Project had been satisfactorily completed as of September 2011. GDOT made semi-final payment to Arch in July 2012.

In September 2012, Strickland sent a demand for payment on Arch’s payment bond. Arch acknowledged the claim and asked for additional documentation. Strickland did not respond. In 2014, Strickland learned that GDOT was preparing to close out the Project and filed a lawsuit against Arch.

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