Travelers Cas. & Sur. Co. of Am. v. Sweet’s Contracting Inc.
BCC Construction, LLC (“BCC”) hired Sweet’s Contracting, Inc. (“SCI”) to perform work on a construction project. The parties entered into a subcontract that contained a pay-if-paid clause. After a dispute arose regarding how much compensation SCI was owed under the subcontract, SCI filed a materialmen’s lien against the project. BCC filed a bond in contest of the lien, and Travelers Casualty & Surety Company (“Travelers”) issued a lien-release bond as surety on behalf of BCC. SCI sued BCC and Travelers seeking recovery under the lien-release bond. The circuit court dismissed the claims against BCC, concluding that the pay-if-paid clause in the subcontract barred recovery from BCC because there was no evidence that BCC had been paid by the owner for the work it allegedly performed. A jury subsequently awarded damages against Travelers. The circuit court denied Travelers’ motion for directed verdict and entered judgment against it. The Supreme Court affirmed in part and reversed in part, holding that the circuit court (1) did not err in granting BCC’s motion for directed verdict; and (2) erred in denying Travelers’ motion for directed verdict, as Travelers, the surety, could not be liable where BCC, the principal, was not liable. View "Travelers Cas. & Sur. Co. of Am. v. Sweet's Contracting Inc." on Justia Law