Matthew DeVries | Best Practices Construction Law | November 18, 2019
A few years ago, I did a post on whether a digital signature in a construction contract was valid. Given the regularity by which parties now communicate by email, it is certainly a subject worth revisiting.
In United States ex rel. Cummins-Wagner Co., Inc. v. Fidelity and Deposit Co. of Maryland, the United States District Court of Maryland address whether a Miller Act claimant can give valid notice of a claim via email. The payment bond claimant was a sub-subcontractor who filed a claim because the subcontractor failed to make timely payment.
The Email as Notice of Claim. Under the Miller Act, second-tier claimants must give notice of any claim to the prime contractor within 90 days of last providing labor or materials. In this case, the prime contractor contacted the sub-subcontractor to ask how much it was owed on the project. Within that 90-day period, the sub-subcontractor sent an email response identifying the total amount owed, as well a copies of the outstanding invoices. In a lawsuit on the payment bond, the surety argued that the email sent by the sub-subcontractor was not sufficient notice of the claim.
The Court Decision. The court concluded that the sub-subcontractor’s email notifying the prime contractor about the claim was legally sufficient notice. Although the Miller Act specifies methods for giving notice, the court focused on whether the prime contractor had received actual notice. Since the contractor did not dispute that it had received the email on the amount owed, the court found that notice was sufficient.
So What? The decision in Cummins-Wagner demonstrates one of many different ways in which a court can treat notice issues. Since contractors do not always comply with the method of notice of a claim outlined in the Miller Act, actual notice may provide a safety net to those contractors who do not strictly comply with statutory or contractual requirements. Send those emails. Follow-up. Timely respond. Do what you have to do to preserve your claims.