 |
GEORGIA CODE (Last Updated: August 20, 2013) |
 |
Title 13. CONTRACTS |
|
|
Chapter 10. CONTRACTS FOR PUBLIC WORKS |
|
|
Article 1. GENERAL PROVISIONS |
|
|
Part 4. PAYMENT BONDS |
| § 13-10-60. Large public works contracts; requirement for payment bonds |
| § 13-10-61. Liability of contracting entity for failure to comply with article |
| § 13-10-62. Notice of commencement |
| § 13-10-63. Pursuit of action by person entitled to protection of payment bond; liability of public entity |
| § 13-10-64. Supplying copy of bond or security deposit agreement and contract; fees for certified copies |
| § 13-10-65. Time for instituting action |
REFS & ANNOS
TITLE 13 Chapter 10 Article 1 Part 4 NOTE
JUDICIAL DECISIONS
EDITOR'S NOTES. --In light of the similarity of the statutory provisions, decisions under former O.C.G.A. § 13-10-1 prior to its 2001 amendment are included in the annotations for this Code section.
PERFORMANCE BOND CANNOT BE CONSIDERED TO HAVE THE FORCE AND EFFECT OF A PAYMENT BOND. See B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONSTRUCTION OF BONDS FOR PUBLIC CONTRACTS. --As compared with private bonds, statutory bonds for public contracts are liberally construed to effectuate the intent of the statute. The presumption under a statutory bond is that the intention of the parties was to execute a bond in accordance with the aims of the statute. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
SECURITY UNDER LIENS AND BONDS COMPARED. --Under O.C.G.A. § 44-14-361, the lien on the property is the security for the laborer and the materialman, while under former O.C.G.A. § 13-10-1, when no lien can be secured, the bond is the security. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
INCORPORATION OF STATUTORY CONDITIONS INTO BOND. --When construing a public contractor's statutory payment bond, courts are mindful of the special legislative policy considerations underpinning the statute, and often incorporate the statutory conditions into the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONDITIONS PRECEDENT TO ACTION ON BOND. --Breach of the condition or promise may be viewed as a condition precedent to an action on the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
LIABILITY OF COUNTY. --Provision that no contract with the county is valid unless the contractor gives a payment bond with good and sufficient surety does not purport to impose any duty or liability upon a county. DeKalb County v. J & A Pipeline Co., 263 Ga. 645, 437 S.E.2d 327 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
COUNTY COMPLYING WITH STATUTORY REQUIREMENTS NOT LIABLE TO SUBCONTRACTOR. --When a county board of education obtained a payment bond from a general contractor in compliance with statutory requirements, the board could not be held liable for subcontractor's claim for payment for work performed under the board's construction contract with the general contractor. ABE Eng'g, Inc. v. Fulton County Bd. of Educ., 214 Ga. App. 514, 448 S.E.2d 221 (1994) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
PAYMENT BOND WILL BE STRICTLY CONSTRUED AND WILL NOT BE EXTENDED BY IMPLICATION or interpretation. Thus, a bond guaranteeing payment only to the public body and not to all parties furnishing services or supplies under the contract does not meet the statutory requirement of a payment bond. B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
BOND MUST HAVE REQUIRED TERMS TO BE ENFORCEABLE AS PAYMENT BOND. --To satisfy the statutory purpose of a payment bond, a payment bond for public work must include the specific statement that the bond is intended for all persons furnishing work or material for the public improvement or that the contract is to be construed so as to be in accordance with applicable statutes. In the absence of one of these terms, a bond is not a "payment" bond and is not enforceable as such by a subcontractor or the subcontractor's materialmen. The materialman's remedy in such a case appears to be against the public body. B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONSTRUCTION OF TERMINOLOGY NOT UNIFORM FOR ALL REMEDIES AFFORDED MATERIALMEN. --Remedies afforded a particular materialman under (1) O.C.G.A. § 44-14-361, (2) former O.C.G.A. § 13-10-1, and (3) the contractual rights appurtenant to a private payment bond are distinct and separate, and, even though certain terminology may overlap, the judicial construction of that terminology is not uniform for all remedies. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
EFFECT OF DEFINITION OF CLAIMANT UNDER THE BOND ON RIGHTS OF MATERIALMEN. --If the general contractor's payment bond defines a claimant under the bond as one supplying material to a subcontractor, then a materialman of a subcontractor may sue on the bond for the subcontractor's nonpayment; if the bond expressly limits a right of action on the bond to the named obligees or is conditioned on the general contractor's payment of only materialmen having a direct relationship with the general contractor, then a materialman of a subcontractor may not sue on the payment bond; and if the bond is conditioned on the general contractor's payment of all persons furnishing labor and material under or for the contract, then, at a minimum, materialmen of the general contractor may maintain an action on the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
RIGHT OF ACTION ON BOND. --Although the term "materials," as judicially interpreted, may exclude certain items as nonlienable, the word may very well include the same items for purposes of a separate statute, such as former O.C.G.A. § 13-10-1. Clearly, then, the lack of a right of action to enforce a special lien under O.C.G.A. § 44-14-361, as statutorily provided or judicially discerned, does not, of itself, preclude a beneficiary's right to sue on a statutory payment bond, or by analogy, on a private payment bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
THIRD PARTY MAY NOT SUE ON PERFORMANCE BOND. --When a performance bond was executed to guarantee the completion of work under a public contract, a private person not a party to the contract could not collect damages for flooding and loss of business resulting from nonperformance of the contract because the private person was not a party to the contract and was not protected by the bond. Long v. City of Midway, 169 Ga. App. 72, 311 S.E.2d 508 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CAUSE OF ACTION ON PAYMENT BOND PROVIDED. --Former O.C.G.A. § 36-82-104 provides that there is a cause of action to every person entitled to the protection of a "payment" bond required to be obtained by the prime contractor and former O.C.G.A. § 13-10-1 requires a payment bond to be obtained, made payable to the public body for which the work was to be done, and for the use and protection of subcontractors supplying labor and materials in the prosecution of the work on the public project. B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
NAME IN WHICH ACTION ON BOND BROUGHT. --Materialmen having a beneficial interest in a contractor's bond may bring an action on the bond in the materialmen's own name rather than in the name of the nominal obligee. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
MATERIALMAN HAS BURDEN OF PROVING LIEN and must bring oneself clearly within the law. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
UNDERGROUND ATLANTA IS A PUBLIC WORKS. --Because Underground Atlanta is a public works project, the city was required to obtain payment and performance bonds for the Underground Atlanta project. To require such bonds for only one portion of the project is not sufficient to discharge the city's obligation under former O.C.G.A. § 13-10-1. City of Atlanta v. United Elec. Co., 202 Ga. App. 239, 414 S.E.2d 251 (1991) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
County had a duty to require a contractor to procure a payment bond which was not procured; thus, a subcontractor had a right to sue the county for materials furnished because of the county's failure to require the payment bond. Kelly Energy Sys. v. Board of Comm'rs,, 196 Ga. App. 519, 396 S.E.2d 498, cert. denied, 196 Ga. App. 908, 396 S.E.2d 498 (1990) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CLAIM INCLUDING OBLIGATIONS TO THIRD TIER SUBCONTRACTORS. --Sub-subcontractor who provided goods and services for a public works contract could include in the sub-subcontractor's claim against the payment bond the amounts which the sub-subcontractor was contractually obligated to pay the sub-subcontractors third tier subcontractors. Sunderland v. Vertex Assocs., 199 Ga. App. 278, 404 S.E.2d 574 (1990), cert. denied, 199 Ga. App. 907, 404 S.E.2d 574 (1991) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
SUPPLIER OF MATERIALS TO SUBCONTRACTOR PROTECTED. --When the general contractor on a government construction contract subcontracted the procurement of certain materials to a subcontractor, which in turn purchased the materials from plaintiff supplier, the plaintiff was not too remote a supplier to recover under the general contractor's statutory payment bond. Barton Malow Co. v. Metro Mfg., Inc., 214 Ga. App. 56, 446 S.E.2d 785 (1994) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
COST OF REPAIRS "CONSUMED" IN PERFORMING WORK IS RECOVERABLE. --Repair costs are recoverable under a statutory surety bond if the repairs were "consumed" in the prosecution of the work covered by the bond, in the sense that the repairs specially contributed to the pending work only and were not of particular use in other unrelated work. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
RENTAL VALUE OF MACHINERY IS PROPERLY CONSIDERED WITHIN PROTECTION OF BOND. --Rental value of machinery owing to a lessor materialman of a subcontractor is properly considered an item within the intended protection of the surety's promise, required by the obligees, to pay all persons furnishing materials consumed in the general contract. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
DISTINCTION BETWEEN THOSE EQUIPMENT AND MACHINERY COSTS COVERED BY BOND AND THOSE EXCLUDED FROM COVERAGE. --Determinative distinction is between items going into work, or specially contributing to its execution and nothing else, and those properly chargeable to plant and equipment of contractor and available not only for pending work but for other work as well. Moore v. Standard Accident Ins. Co., 48 Ga. App. 508, 173 S.E. 481 (1934); Western Cas. & Sur. Co. v. Fulton Supply Co., 60 Ga. App. 710, 4 S.E.2d 690 (1939) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
While there may be a recovery on a public contractor's bond for material and labor used in incidental and current repairs to the contractor's machinery, there can be none for major repairs involving the replacement of old with new parts, in the absence of proof that the new parts were consumed in the work covered by the bond. The determinative distinction is between the items going into the work, or specially contributing to the execution of the contract and nothing else, and those properly chargeable to the plant and equipment of the contractor, and available not only for the pending work but for other work as well. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CLARIFICATION BY 1991 AMENDMENT. --The 1991 amendment which provides that the required payment bond be approved as to form and as to the solvency of the surety by the officer of the public entity who negotiates the contract on behalf of the public entity, clarified the previously implicit understanding that a surety is not "good and sufficient" unless the surety is solvent. J & A Pipeline Co. v. DeKalb County, 208 Ga. App. 123, 430 S.E.2d 13, modified on other grounds, DeKalb County v. J & A Pipeline Co., 263 Ga. 645, 437 S.E.2d 327 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
RETROACTIVE APPLICATION OF 1991 AMENDMENT. --See Atlanta Mechanical, Inc. v. DeKalb County, 209 Ga. App. 307, 434 S.E.2d 494 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
OBTAINING AN AFFIDAVIT from a surety is intended to be in addition to rather than instead of the requirement for a county that the surety be approved as "good and sufficient." J & A Pipeline Co. v. DeKalb County, 208 Ga. App. 123, 430 S.E.2d 13, modified on other grounds, DeKalb County v. J & A Pipeline Co., 263 Ga. 645, 437 S.E.2d 327 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
COUNTY SCHOOL BOARD. --County school board was a public body within the meaning of former O.C.G.A. § 13-10-1 and § 36-82-102, and it could therefore be held liable under the latter section for failure to investigate the solvency of a surety as required by subsection (f) of former § 13-10-1. Hall County Sch. Dist. v. C. Robert Beals & Assocs., 231 Ga. App. 492, 498 S.E.2d 72 (1998) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
OPINIONS OF THE ATTORNEY GENERAL
EDITOR'S NOTES. --In light of the similarity of the statutory provisions, decisions under former O.C.G.A. § 13-10-1 prior to its 2001 amendment are included in the annotations for this Code section.
STATE BODY FOR WHICH WORK IS TO BE DONE SHOULD ALSO APPROVE THE REQUIRED BONDS. 1980 Op. Att'y Gen. No. 80-99. (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONTRACT AMOUNT. --Performance bonds are required on all county contracts in the amount of $5,000.00 or more for the construction, reconstruction or maintenance of public roads. Payment bonds are required on this type of contract if the contract amount is in excess of $20,000.00 [now $40,000.00]. 1988 Op. Att'y Gen. U88-32. (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
EDITOR'S NOTES. --In light of the similarity of the statutory provisions, decisions under former O.C.G.A. § 13-10-1 prior to its 2001 amendment are included in the annotations for this Code section.
PERFORMANCE BOND CANNOT BE CONSIDERED TO HAVE THE FORCE AND EFFECT OF A PAYMENT BOND. See B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONSTRUCTION OF BONDS FOR PUBLIC CONTRACTS. --As compared with private bonds, statutory bonds for public contracts are liberally construed to effectuate the intent of the statute. The presumption under a statutory bond is that the intention of the parties was to execute a bond in accordance with the aims of the statute. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
SECURITY UNDER LIENS AND BONDS COMPARED. --Under O.C.G.A. § 44-14-361, the lien on the property is the security for the laborer and the materialman, while under former O.C.G.A. § 13-10-1, when no lien can be secured, the bond is the security. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
INCORPORATION OF STATUTORY CONDITIONS INTO BOND. --When construing a public contractor's statutory payment bond, courts are mindful of the special legislative policy considerations underpinning the statute, and often incorporate the statutory conditions into the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONDITIONS PRECEDENT TO ACTION ON BOND. --Breach of the condition or promise may be viewed as a condition precedent to an action on the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
LIABILITY OF COUNTY. --Provision that no contract with the county is valid unless the contractor gives a payment bond with good and sufficient surety does not purport to impose any duty or liability upon a county. DeKalb County v. J & A Pipeline Co., 263 Ga. 645, 437 S.E.2d 327 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
COUNTY COMPLYING WITH STATUTORY REQUIREMENTS NOT LIABLE TO SUBCONTRACTOR. --When a county board of education obtained a payment bond from a general contractor in compliance with statutory requirements, the board could not be held liable for subcontractor's claim for payment for work performed under the board's construction contract with the general contractor. ABE Eng'g, Inc. v. Fulton County Bd. of Educ., 214 Ga. App. 514, 448 S.E.2d 221 (1994) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
PAYMENT BOND WILL BE STRICTLY CONSTRUED AND WILL NOT BE EXTENDED BY IMPLICATION or interpretation. Thus, a bond guaranteeing payment only to the public body and not to all parties furnishing services or supplies under the contract does not meet the statutory requirement of a payment bond. B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
BOND MUST HAVE REQUIRED TERMS TO BE ENFORCEABLE AS PAYMENT BOND. --To satisfy the statutory purpose of a payment bond, a payment bond for public work must include the specific statement that the bond is intended for all persons furnishing work or material for the public improvement or that the contract is to be construed so as to be in accordance with applicable statutes. In the absence of one of these terms, a bond is not a "payment" bond and is not enforceable as such by a subcontractor or the subcontractor's materialmen. The materialman's remedy in such a case appears to be against the public body. B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONSTRUCTION OF TERMINOLOGY NOT UNIFORM FOR ALL REMEDIES AFFORDED MATERIALMEN. --Remedies afforded a particular materialman under (1) O.C.G.A. § 44-14-361, (2) former O.C.G.A. § 13-10-1, and (3) the contractual rights appurtenant to a private payment bond are distinct and separate, and, even though certain terminology may overlap, the judicial construction of that terminology is not uniform for all remedies. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
EFFECT OF DEFINITION OF CLAIMANT UNDER THE BOND ON RIGHTS OF MATERIALMEN. --If the general contractor's payment bond defines a claimant under the bond as one supplying material to a subcontractor, then a materialman of a subcontractor may sue on the bond for the subcontractor's nonpayment; if the bond expressly limits a right of action on the bond to the named obligees or is conditioned on the general contractor's payment of only materialmen having a direct relationship with the general contractor, then a materialman of a subcontractor may not sue on the payment bond; and if the bond is conditioned on the general contractor's payment of all persons furnishing labor and material under or for the contract, then, at a minimum, materialmen of the general contractor may maintain an action on the bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
RIGHT OF ACTION ON BOND. --Although the term "materials," as judicially interpreted, may exclude certain items as nonlienable, the word may very well include the same items for purposes of a separate statute, such as former O.C.G.A. § 13-10-1. Clearly, then, the lack of a right of action to enforce a special lien under O.C.G.A. § 44-14-361, as statutorily provided or judicially discerned, does not, of itself, preclude a beneficiary's right to sue on a statutory payment bond, or by analogy, on a private payment bond. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
THIRD PARTY MAY NOT SUE ON PERFORMANCE BOND. --When a performance bond was executed to guarantee the completion of work under a public contract, a private person not a party to the contract could not collect damages for flooding and loss of business resulting from nonperformance of the contract because the private person was not a party to the contract and was not protected by the bond. Long v. City of Midway, 169 Ga. App. 72, 311 S.E.2d 508 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CAUSE OF ACTION ON PAYMENT BOND PROVIDED. --Former O.C.G.A. § 36-82-104 provides that there is a cause of action to every person entitled to the protection of a "payment" bond required to be obtained by the prime contractor and former O.C.G.A. § 13-10-1 requires a payment bond to be obtained, made payable to the public body for which the work was to be done, and for the use and protection of subcontractors supplying labor and materials in the prosecution of the work on the public project. B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 304 S.E.2d 544 (1983) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
NAME IN WHICH ACTION ON BOND BROUGHT. --Materialmen having a beneficial interest in a contractor's bond may bring an action on the bond in the materialmen's own name rather than in the name of the nominal obligee. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
MATERIALMAN HAS BURDEN OF PROVING LIEN and must bring oneself clearly within the law. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
UNDERGROUND ATLANTA IS A PUBLIC WORKS. --Because Underground Atlanta is a public works project, the city was required to obtain payment and performance bonds for the Underground Atlanta project. To require such bonds for only one portion of the project is not sufficient to discharge the city's obligation under former O.C.G.A. § 13-10-1. City of Atlanta v. United Elec. Co., 202 Ga. App. 239, 414 S.E.2d 251 (1991) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
County had a duty to require a contractor to procure a payment bond which was not procured; thus, a subcontractor had a right to sue the county for materials furnished because of the county's failure to require the payment bond. Kelly Energy Sys. v. Board of Comm'rs,, 196 Ga. App. 519, 396 S.E.2d 498, cert. denied, 196 Ga. App. 908, 396 S.E.2d 498 (1990) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CLAIM INCLUDING OBLIGATIONS TO THIRD TIER SUBCONTRACTORS. --Sub-subcontractor who provided goods and services for a public works contract could include in the sub-subcontractor's claim against the payment bond the amounts which the sub-subcontractor was contractually obligated to pay the sub-subcontractors third tier subcontractors. Sunderland v. Vertex Assocs., 199 Ga. App. 278, 404 S.E.2d 574 (1990), cert. denied, 199 Ga. App. 907, 404 S.E.2d 574 (1991) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
SUPPLIER OF MATERIALS TO SUBCONTRACTOR PROTECTED. --When the general contractor on a government construction contract subcontracted the procurement of certain materials to a subcontractor, which in turn purchased the materials from plaintiff supplier, the plaintiff was not too remote a supplier to recover under the general contractor's statutory payment bond. Barton Malow Co. v. Metro Mfg., Inc., 214 Ga. App. 56, 446 S.E.2d 785 (1994) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
COST OF REPAIRS "CONSUMED" IN PERFORMING WORK IS RECOVERABLE. --Repair costs are recoverable under a statutory surety bond if the repairs were "consumed" in the prosecution of the work covered by the bond, in the sense that the repairs specially contributed to the pending work only and were not of particular use in other unrelated work. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
RENTAL VALUE OF MACHINERY IS PROPERLY CONSIDERED WITHIN PROTECTION OF BOND. --Rental value of machinery owing to a lessor materialman of a subcontractor is properly considered an item within the intended protection of the surety's promise, required by the obligees, to pay all persons furnishing materials consumed in the general contract. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
DISTINCTION BETWEEN THOSE EQUIPMENT AND MACHINERY COSTS COVERED BY BOND AND THOSE EXCLUDED FROM COVERAGE. --Determinative distinction is between items going into work, or specially contributing to its execution and nothing else, and those properly chargeable to plant and equipment of contractor and available not only for pending work but for other work as well. Moore v. Standard Accident Ins. Co., 48 Ga. App. 508, 173 S.E. 481 (1934); Western Cas. & Sur. Co. v. Fulton Supply Co., 60 Ga. App. 710, 4 S.E.2d 690 (1939) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
While there may be a recovery on a public contractor's bond for material and labor used in incidental and current repairs to the contractor's machinery, there can be none for major repairs involving the replacement of old with new parts, in the absence of proof that the new parts were consumed in the work covered by the bond. The determinative distinction is between the items going into the work, or specially contributing to the execution of the contract and nothing else, and those properly chargeable to the plant and equipment of the contractor, and available not only for the pending work but for other work as well. Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CLARIFICATION BY 1991 AMENDMENT. --The 1991 amendment which provides that the required payment bond be approved as to form and as to the solvency of the surety by the officer of the public entity who negotiates the contract on behalf of the public entity, clarified the previously implicit understanding that a surety is not "good and sufficient" unless the surety is solvent. J & A Pipeline Co. v. DeKalb County, 208 Ga. App. 123, 430 S.E.2d 13, modified on other grounds, DeKalb County v. J & A Pipeline Co., 263 Ga. 645, 437 S.E.2d 327 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
RETROACTIVE APPLICATION OF 1991 AMENDMENT. --See Atlanta Mechanical, Inc. v. DeKalb County, 209 Ga. App. 307, 434 S.E.2d 494 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
OBTAINING AN AFFIDAVIT from a surety is intended to be in addition to rather than instead of the requirement for a county that the surety be approved as "good and sufficient." J & A Pipeline Co. v. DeKalb County, 208 Ga. App. 123, 430 S.E.2d 13, modified on other grounds, DeKalb County v. J & A Pipeline Co., 263 Ga. 645, 437 S.E.2d 327 (1993) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
COUNTY SCHOOL BOARD. --County school board was a public body within the meaning of former O.C.G.A. § 13-10-1 and § 36-82-102, and it could therefore be held liable under the latter section for failure to investigate the solvency of a surety as required by subsection (f) of former § 13-10-1. Hall County Sch. Dist. v. C. Robert Beals & Assocs., 231 Ga. App. 492, 498 S.E.2d 72 (1998) (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
OPINIONS OF THE ATTORNEY GENERAL
EDITOR'S NOTES. --In light of the similarity of the statutory provisions, decisions under former O.C.G.A. § 13-10-1 prior to its 2001 amendment are included in the annotations for this Code section.
STATE BODY FOR WHICH WORK IS TO BE DONE SHOULD ALSO APPROVE THE REQUIRED BONDS. 1980 Op. Att'y Gen. No. 80-99. (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).
CONTRACT AMOUNT. --Performance bonds are required on all county contracts in the amount of $5,000.00 or more for the construction, reconstruction or maintenance of public roads. Payment bonds are required on this type of contract if the contract amount is in excess of $20,000.00 [now $40,000.00]. 1988 Op. Att'y Gen. U88-32. (decided under former O.C.G.A. § 13-10-1 prior to its 2001 amendment).