Hat tip to Greta McMorris (@SuretyLaw) for tweeting about a case decided by the Minnesota Court of Appeals last week that focused on the timeliness of a payment bond claim on state projects in the state. The case is API Electric Company v. North America Speciality Insurance Company.
I think it’s an important case, but not because it provides some ground shattering legal conclusion. Actually, for the contrary reason. I think the case is obvious, and it frustrates me to see attorneys going around making arguments like this.
The culprit was John G. Patterson of the law firm Sten-Erik Hoidal, Fredrikson & Byron, P.A. They were representing API Electric Company. Here is their argument in a 1-2-3 format:
1) Minnesota statute provides payment bond claims must be made within 120 days of last furnishing, but there is a case that allows that period to be extended by the express terms of the bond allowing more time.
2) The bond in question did not have any such express terms.
3) This part, API Electric’s attorney’s argument, is just hard to explain. They argued that since the bond was silent about the time period, that was an expression that the bond would somehow allow some undefined amount of time longer than 120 days to make the claim.
This argument lost at the trial level, and then took this to the higher courts. It lost again. The court explained the obvious:
We conclude that the absence of a specific time limit for giving notice of a claim is not “express language” that supersedes the statutory time in which a claimant can file notice.
I think it’s worth bringing up an article about lawyers that I find both interesting and completely true. I refer to a blog post titled “Your Lawyer Is Wrong,” which refers to a study by Psychology, Public Policy, and Law finding that lawyers substantially overestimated their chances at winning a case. They are biased in their own favor, and that spills over into their advising of clients about whether to proceed or not in cases. One has to think that may have happened in this case?
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