October 22, 2012 · 9:00 AM
It was an honor and pleasure to speak at last week’s surety and fidelity claims conference in Philadelphia hosted by the American Conference Institute. Mark Oertel, a surety attorney from Los Angeles, and I closed out the conference on Thursday, October 18 with a presentation entitled “The Interplay Between Equitable Subrogation and the General Agreement of Indemnity’s Assignment Clause.”
Our remarks focused on two of the tools sureties use to minimize loss after satisfying claims made under payment and performance bonds. One of those tools, equitable subrogation, allows the surety to step into the shoes and assert the rights of those entities to whom or on whose behalf the surety has performed or made payment. That means after it performs its bond obligations, a surety becomes “subrogated” to the owner’s right to apply contract funds to completion costs, to the bond principal’s right to recover against poor-performing and/or late-performing subcontractors, and to the subs’ and suppliers’ rights to payment. Since the courts have held that the surety’s equitable rights trump the rights of bankruptcy trustees, lenders and taxing authorities, equitable subrogation is undoubtedly the most powerful weapon in the surety’s salvage arsenal.
That’s MOST powerful. Not ALL powerful.
Continue reading →
Filed under Equitable Subrogation, Indemnity Rights, Payment Bonds, Performance Bonds, Surety Law
Tagged as assignment clause, construction law, construction lawyer nc, construction lawyer raleigh, equitable subrogation, general agreement of indemnity, NC construction law, nc surety law, payment bond, performance bond, salvage, surety bonds, surety indemnity, surety law, surety lawyer nc, surety lawyer raleigh, surety salvage
June 18, 2012 · 11:59 AM
Image from Wikipedia Commons
Monday is upon is, the beginning of what is likely to be the penultimate week of the General Assembly’s 2012 short session.
As my regular readers know, I’ve been tracking two key pieces of construction-related legislation: the lien law revision bill recommended by a legislative study commission, and the bill advanced by the title insurance industry to address the “hidden lien problem.”
This post provides an update on where those two bills stand, and also reports on a third construction-related bill that hit my radar last week.
Continue reading →
Filed under Lien Law, Local law, policy & news, Payment Bonds, Payment Bonds, State law, policy & news, Surety Law
Tagged as double payment, hidden liens, letter of credit substitute for bonds, NC construction attorney, NC construction lawyer, NC General Assembly, NC mechanics lien law, NC mechanics liens, nc payment bond claims, nc surety attorney, nc surety law, nc surety lawyer, payment bond, raleigh construction lawer, raleigh surety attorney, raleigh surety lawyer, subcontractor payment claims, Surety bonds; surety & fidelity association, title insurance mechanics liens, Union County build-to-suit