Taylor Construction Inc. v. ABT Service Corp. Inc.

In this case, a Miller Act surety failed to pay a subcontractor the entire amount due under the bonded subcontract claiming that the Miller Act imposes no duty to pay the subcontractor the amount in the subcontract’s savings clause. The district court disagreed, granting summary judgment against the surety and ordering it to pay the entire amount due under the contract, including under the savings clause. We now affirm because the Miller Act clearly requires a surety to pay the entire amount due under the contract when the prime contractor defaults.

I. BACKGROUND

ABT Service Corporation was the prime contractor on a project at the Idaho National Engineering Laboratory. Pursuant to the Miller Act, 40 U.S.C. §§ 270a-f, defendant International Fidelity Insurance Company issued a payment bond to the prime contractor. The dispute here arises from the surety company’s failure to pay under the Miller Act payment bond.

On April 2, 1992, ABT Service Corporation entered into a subcontract with plaintiff Taylor Construction (Taylor) for Taylor to perform the excavating, utility digging, and foundation work for the project. The subcontract provided that Taylor would be reimbursed for its…