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Tracy Steedman Discusses a Recent Federal Court Ruling Allowing Payment Bond Claim Notices by Email

Tracy Steedman contributed to the Maryland Construction Network monthly newsletter and made the front page with her article discussing a recent Federal Court ruling allowing payment bond claim notices to be sent via email. She writes:

“In April of this year, the United States District Court for the District of Maryland ruled on whether a supplier provided sufficient notice of its payment bond claim to a general contractor under Maryland’s Little Miller Act.

In Johnson-Lancaster & Associates v. H.M.C., Inc., the supplier was a second-tier sub, who was owed a significant amount of money from the subcontractor on a state project. Despite several demands for payment, it finally sent a notice to the general contractor of non-payment. The notice contained the project’s name, the amount of the unpaid balance, the name of the subcontractor who had not paid, and documents supporting the unpaid balance. It was sent by email only.

The Little Miller Act requires that notice to the general contract must “be sent by certified mail.” The surety attempted to get the bond claim dismissed based solely on the fact that the supplier did not send the notice to the general contractor by certified mail. The notice was otherwise in compliance as to timing, content and actual receipt of the notice by the GC.

The Court declined to rule in favor of the surety, stating, ” This court must still look to the purpose of the statute to determine whether email is a sufficient means of delivery. In this case, a liberal construction of the means of delivery does not contravene the remedial purpose of the statute. The purpose of certified mail is to ensure receipt of the claim. In this case, receipt of the claim was ensured by email which provided a digital history of delivery.”

The purpose of the statute is to provide greater protection to subcontractors on contracts awarded by the state, while the notice requirements aim to protect the GC.

Email is our primary means of communication these days (depending on which generation one is referring to 😊), and this decision is in line with the purpose of the statute and recognizes the realities of the present.”

Click here to read the full Maryland Construction Network June Newsletter.

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