In a construction dispute involving a performance bond, the Circuit Court of Howard County, MD affirmed on May 23, 2011 that Fidelity & Deposit Company could not avoid financial liability for a decision by Harbor View Contractors to abandon a construction job.
F&D had sought reconsideration of a decision by the Circuit Court in January. The Court had denied summary judgment to F&D, declaring that the building owner, the First Baptist Church of Guilford, had not defaulted on its contractual obligations. The Court also had granted partial summary judgment to the Church and its bank, First Mariner Bank, declaring that Harbor View had no right to walk off the job.
Harbor View had alleged that it was entitled to stop working because the Church had failed to show it would be able to pay for the rest of the contract. Harbor View had demanded such evidence under a provision that appears in standard-form construction contracts, allowing contractors to require owners to produce such evidence in the middle of a job.
In January, in the decisions under reconsideration, the Court determined that the evidence the Church provided was adequate. It reaffirmed those decisions on Monday by denying reconsideration.
"Given F&D's strong presence in the performance bond market in this area, it's important for building owners to know that such bonds will be enforced when contractors breach their obligations," said Rhonda D. Orin, Managing Partner of the Washington, D.C. office of Anderson Kill & Olick.
Rhonda D. Orin and Matthew Baskir of Anderson Kill & Olick represented First Mariner Bank.
Please contact us if you would like to receive a copy of the Jan. 18, 2011 order, upheld this week.
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