§ 49-42 — Enforcement of right to payment on bond. Suit on bond, procedure and judgment.

Connecticut § 49-42

• Jurisdiction: Connecticut
• Title 49: Mortgages and Liens
• Ch. 847: Liens

Text

(a)(1) Any person who performed work or supplied materials for which a requisition was submitted to, or for which an estimate was prepared by, the awarding authority and who does not receive full payment for such work or materials within sixty days of the applicable payment date provided for in subsection (a) of section 49-41a, or any person who supplied materials or performed subcontracting work not included on a requisition or estimate who has not received full payment for such materials or work within sixty days after the date such materials were supplied or such work was performed, may enforce such person's right to payment under the bond by serving a notice of claim on the surety that issued the bond and a copy of such notice to the contractor named as principal in the bond not later than one hundred eighty days after the last date any such materials were supplied or any such work was performed by the claimant. For the payment of retainage, as defined in section 42-158i, such notice shall be served not later than one hundred eighty days after the applicable payment date provided for in subsection (a) of section 49-41a. The notice of claim shall state with substantial accuracy the amount claimed and the name of the party for whom the work was performed or to whom the materials were supplied, and shall provide a detailed description of the bonded project for which the work or materials were provided. If the content of a notice prepared in accordance with subsection (c) of section 49-41a complies with the requirements of this section, a copy of such notice, served not later than one hundred eighty days after the date provided for in this section upon the surety that issued the bond and upon the contractor named as principal in the bond, shall satisfy the notice requirements of this section. Not later than ninety days after service of the notice of claim, the surety shall make payment under the bond and satisfy the claim, or any portion of the claim which is not subject to a good faith dispute, and shall serve a notice on the claimant denying liability for any unpaid portion of the claim. The surety's failure to discharge its obligations under this section shall not be deemed to constitute a waiver of defenses the surety or its principal on the bond may have or acquire as to the claim, except as to undisputed amounts for which the surety and claimant have reached agreement. If, however, the surety fails to discharge its obligations under this section, then the surety shall indemnify the claimant for the reasonable attorneys' fees and costs the claimant incurs thereafter to recover any sums found due and owing to the claimant. The notices required under this section shall be served by registered or certified mail, postage prepaid in envelopes addressed to any office at which the surety, principal or claimant conducts business, or in any manner in which civil process may be served. (2) If the surety denies liability on the claim, or any portion thereof, the claimant may bring an action upon the payment bond in the Superior Court for such sums and prosecute the action to final execution and judgment. An action to recover on a payment bond under this section shall be privileged with respect to assignment for trial. The court shall not consolidate for trial any action brought under this section with any other action brought on the same bond unless the court finds that a substantial portion of the evidence to be adduced, other than the fact that the claims sought to be consolidated arise under the same general contract, is common to such actions and that consolidation will not result in excessive delays to any claimant whose action was instituted at a time significantly prior to the filing of the motion to consolidate. In any such proceeding, the court judgment shall award the prevailing party the costs for bringing such proceeding and allow interest at the rate of interest specified in the labor or materials contract under which the claim arises or, if no such interest rate is specified, at the rate of interest as provided in section 37-3a upon the amount recovered, computed from the date of service of the notice of claim, provided, for any portion of the claim which the court finds was due and payable after the date of service of the notice of claim, such interest shall be computed from the date such portion became due and payable. The court judgment may award reasonable attorneys' fees to either party if upon reviewing the entire record, it appears that either the original claim, the surety's denial of liability, or the defense interposed to the claim is without substantial basis in fact or law. Any person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing the payment bond shall have a right of action upon the payment bond upon giving written notice of claim as provided in this section. (b) Every suit instituted under this section shall be brought in the name of the person suing, in the superior court for the judicial district where the contract was to be performed, irrespective of the amount in controversy in the suit, but no such suit may be commenced after the expiration of one year after the last date that materials were supplied or any work was performed by the claimant, except that any such suit solely seeking payment for retainage, as defined in section 42-158i , shall be commenced not later than one year after the date payment of such retainage was due, pursuant to the provisions of subsection (a) of section 49-41a . (c) The word “material” as used in sections 49-33 to 49-43 , inclusive, shall include construction equipment and machinery that is rented or leased for use (1) in the prosecution of work provided for in the contract within the meaning of sections 49-33 to 49-43 , inclusive, or (2) in the construction, raising or removal of any building or improvement of any lot or in the site development or subdivision of any plot of land within the meaning of sections 49-33 to 49-39 , inclusive.

Legislative History

(1949 Rev., S. 7215; 1961, P.A. 228; 1969, P.A. 192, S. 1; P.A. 78-280, S. 2, 127; P.A. 79-602, S. 100; P.A. 87-345, S. 2; P.A. 94-188, S. 16; P.A. 00-36; P.A. 01-195, S. 48, 181; P.A. 06-78, S. 1; P.A. 09-146, S. 3; P.A. 16-104, S. 2.) History: 1961 act required that payment be made within 90 days rather than 60 days in Subsec. (a); 1969 act required that suit commence within one year after date on which last of the labor was performed or material was supplied rather than within one year “after the date of final settlement of such contract” in Subsec. (b); P.A. 78-280 substituted “judicial district” for “county” in Subsec. (b); P.A. 79-602 made minor changes in wording but made no substantive changes; P.A. 87-345 substantially amended procedure set forth in Subsec. (a) for enforcement of right to payment under bond; P.A. 94-188 amended procedure set forth in Subsec. (a) for enforcement of right to payment under bond and amended Subsec. (b) by adding language concerning the applicable payment date provided for in Sec. 49-41a and the time within which to commence suit for materials or work not included on a requisition or estimate; P.A. 00-36 redefined “material” in Subsec. (c) to include construction equipment that is rented or leased for use in prosecution of work or in construction, raising, removal of any building or improvement of lot or in site development or subdivision and to apply term to Secs. 49-33 to 49-43, inclusive; P.A. 01-195 made technical changes in Subsecs. (a) and (c), effective July 11, 2001; P.A. 06-78 added provision in Subsec. (a) re notice for payment of retainage, added provisions in Subsec. (b) re commencement of suit within one year of last date materials were supplied or work was performed by claimant and requiring suit seeking payment solely for retainage to be commenced within one year after retainage payment was due, pursuant to Sec. 49-41a(a) and made conforming and technical changes in Subsecs. (a) and (b), effective May 30, 2006; P.A. 09-146 replaced reference to Sec. 49-41a(b) with reference to Sec. 49-41a(c) in Subsec. (a), effective July 1, 2009; P.A. 16-104 amended Subsec. (a) to designate existing provisions re enforcement of person's right to payment under bond by serving notice of claim on surety as Subdiv. (1) and amend same by adding provisions re surety's failure to discharge obligations not deemed to constitute waiver of defenses, and to designate existing provisions re surety that denies liability on claim may bring action in Superior Court as Subdiv. (2) and amend same by making technical changes, effective July 1, 2016. Cited. 143 C. 85. History discussed. 151 C. 332. Material actually forming part of work provided for in public works contract, as well as labor performed at the site, is clearly within contemplated coverage of payment bond required for protection of persons who have furnished “labor or material in the prosecution of the work”. Id., 334. Test as to whether labor and materials used in making repairs which are major items are covered by payment bond is whether item was necessitated by rigors of job rather than prior condition of equipment and whether supplier and purchasing contractor reasonably expected that item would be substantially consumed on the job. Id., 335. Having found that no administrative determination by public works commissioner of final settlement date had been made under Sec. 49-43, court was justified in concluding that no final settlement within meaning of this section could be said to have preceded actual payment and exchange of releases, and that subject action commenced within 3 months of that date had been timely brought. 159 C. 563. Cited. 174 C. 219. Remedies afforded by this section and Sec. 49-41a(b) are independent and notice requirements of later are not prerequisite to suit initiated under this section. 207 C. 468. Cited. 229 C. 303; 236 C. 750; 238 C. 293; 239 C. 708; 240 C. 10. Under 1995 revision, action on bond executed by surety pursuant to Sec. 49-41 is governed by this section, and plaintiff cannot bring a common-law action on bond. 293 C. 569. Cited. 25 CA 751; 29 CA 783; 32 CA 118; Id., 133. Claims under section are not preempted by ERISA. 40 CA 777. Neither Sec. 49-41a(c) nor this section contain any language to suggest that the substantial performance language of Sec. 49-41a(c) applies to a subcontractor's claim under this section against a surety. 207 CA 551. Cited. 17 CS 297. Fact that written notice was given to the contractor in an action on bond must be recited in the complaint or a copy annexed thereto; failure to comply with this rule left the complaint deficient. 18 CS 43. Until the subcontractor exercises his right of action granted by section, there is no debt due from the contractor to the subcontractor which can be garnished. 21 CS 16. Cited. 32 CS 168. Subsec. (a): Decision permits subcontractor to sue on surety bond despite failure to comply precisely with notice requirements of section. 225 C. 367. 90-day response requirement is directory, not mandatory, and legislature did not intend that a surety that fails to pay or to deny a claim by the statutory deadline thereby waives any substantive defenses and forfeits its right to contest the merits of the claim. 314 C. 749. Because section requires only “substantial accuracy” re complaint, plaintiff was not obligated to prove that company X was now known as company Y; trial court erred in refusing to admit evidence of notice of claim on the surety. 49 CA 522.