ABOUT THE CLAIM
A massive (700,000 sf) refrigerated port terminal on our nation’s East Coast serves the area’s wholesale and retail needs for fresh produce. On this surety bond claim the bonded principal, along with the installer and distributor, was responsible for the insulated wall panels. These specialized panels are intended to keep the produce at 50°F in most bays, with climate controls enabling each room to provide exactly the right temperature for the specific variety of produce housed.
ABOUT THE INVESTIGATION
Despite the cool interior climate of the produce facility, when Guardian’s Surety Group experts were called to the scene, they knew they were headed into a heated situation. The general contractor had defaulted multiple subcontractors, including the surety’s principal. Guardian’s investigation revealed that his decision had repercussions on the workflow; the ability for all subs to properly coordinate, especially with regard to wall penetrations, had been seriously hampered. The principal’s work scope assigned him responsibility for the walls’ openings but failed to quantify them or define their locations. Additionally, the investigation showed that the general contractor’s accelerated-but-uncompensated modifications to the work schedule rendered the achievement of any milestones impossible. Withheld payments caused a disgruntled principal to walk off the job on numerous occasions.
ABOUT THE RESOLUTION
In order to protect the surety, control completion costs, and preserve defenses, Guardian’s surety experts recommended a completion approach. With this approach and reservation of rights agreement, all disputes could be tabled, the completion of the project could be everybody’s primary aim, and all suspended payments could be released. With the relationships on the job site having soured and tempers still running high, Guardian’s construction claim experts managed to broker something of peace. While it continued to be a difficult situation, this re-set and the injection of Guardian’s supervisory experience helped pave the way to greater coordination among the subs and quickened the pace of progress.
Upon successful project completion, during the ensuing litigation, the general contractor was alleged to have violated state procurement laws because the requirement for Payment and Performance Bonds had been waived. The argument put forth was that this waiving rendered the underlying contract illegal and invalidated the surety’s bonds to the subcontractor. Prior to trial, the issue was settled… without any payment by the surety. In fact, Guardian’s surety client later recovered a quarter-million dollars in expenses pursuant to its indemnity agreement and associated promissory note.
ABOUT GUARDIAN GROUP, INC.
From large, complex surety claims to smaller, everyday surety bond claims, at Guardian Group, Inc. seasoned surety investigation and claim resolution experience combine with lauded technical construction and engineering expertise to support you in meeting your claims handling and bottom-line business objectives. It’s a tradition of stalwart service to sureties and their counsel Guardian Group, Inc. has upheld for over 30 years. Seasoned, practical advice grounded in real-world on-the-site know-how. Greater problem-solving ingenuity and claims administration efficiency. It all adds up to greater confidence. For a conversation about how you might be able to leverage our experience to help you seize today’s opportunities, kindly call on Guardian Group today.