Eleventh Circuit Reverses Attorneys’ Fee Award to Performance Bond Sureties in Dispute with Contractor arising from Claim against Subcontractor Performance Bond

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The issue was whether the District Court was wrong when it determined that the nonperforming Sureties were entitled to an award of prevailing party attorneys’ fees against the Contractor.

February 27, 2019
CDJ STAFF

On October 26, 2018, the United States Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) issued a decision which reversed an award of prevailing party attorneys’ fees to performance bond sureties in their dispute with a contractor arising from the contractor’s claim against a subcontractor’s performance bond. Had the lower court’s decision been affirmed, the performance bond sureties would have been able to recover prevailing party attorneys’ fees against the contractor even though they were not parties to the underlying subcontract and the subcontract did not contain a prevailing party attorneys’ fee provision.

The underlying case is complicated and arose from the construction of Brickell CityCentre in Miami. Americaribe-Moriarty JV (the “Contractor”) asserted a claim against a performance bond procured by a defaulted subcontractor and issued by International Fidelity Insurance Company and Allegheny Casualty Company (collectively, the “Sureties”). The Sureties filed a declaratory judgment action against the Contractor in the United States District Court for the Southern District of Florida (the “District Court”), seeking a declaration that the Contractor failed to perfect its claim against the performance bond.

Reprinted courtesy of Gary M. Stein, Peckar & Abramson and K. Stefan Chin, Peckar & Abramson
Mr. Stein may be contacted at gstein@pecklaw.com
Mr. Chin may be contacted at kschin@pecklaw.com



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