As stated by the court:
“The district court held that by presenting the general contractor with unpaid invoices, MJJ, a sub-subcontractor, satisfied the [120-day] notice requirement in Sec. 137(3) because the invoices stated with ‘substantial accuracy’ the amount owed to MJJ and ‘the name of the party … for whom the labor was performed.’ Id. We agree.
“Fidelity’s arguments notwithstanding, nothing in Sec 137(3) requires that the written notice explicitly state that the subcontractor is making a bond claim. See Am.Bldg. Contractors Assocs., LLC v. Mica & Wood Creations, LLC, 804 N.Y.S.2d 109, 110 (2d Sep’t 2005) (reversing grant of summary judgment in favor of surety holding that Sec. 137(3) ‘does not specifically require that a notice refer to a bond claim’).”
Comment: The problem for unpaid subs or suppliers is that they don’t know if they are going to have to actually make a claim on the payment bond; and in most cases they don’t.
Subs and suppliers know that by making a bond claim they don’t exactly endear themselves to the GC. In fact, the GC may have done nothing wrong, and the problem is that one of its subs is not paying its bills.
They do know, however, that if they don’t give the required 120-day notice that they will lose their payment bond rights.
The solution is that subs and suppliers who have not been paid within 90 days of the last day of their providing services or materials (which is not 90 days from the date of their last invoice) should send the 120-day notice.
To prevent the surety from raising the defense as F&D did in this case, the notice should state that it is being given to comply with the notice requirements under SFL 137, but is not a present request for payment under the bond.
That way the sub or supplier has preserved its rights under the bond, and has not unnecessarily ticked anyone off.