ILNews

Court answers question on subcontractors' ability to recover

Michael W. Hoskins
January 1, 2007
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The Indiana Supreme Court today delved into the meaning of "subcontractor" and determined that performance bond coverage for third parties only goes so far.

Stemming from a certified question from the U.S. District Court for the Northern District of Indiana, justices considered: "Does a performance bond required by and issued in accordance with Ind. Code §8-23-9-9 afford coverage to a third-tier claimant?"

Chief Justice Randall T. Shepard wrote the opinion saying the statute does not afford that coverage, noting that a subcontractor is "any person or organization entering into a contract with a contractor to furnish labor and materials used in the actual construction of a state highway project."

Further in the decision, he wrote: "Accordingly, a claimant who does not share privity of contract with the contractor or a subcontractor is not entitled to the coverage of a performance bond issued under §8-23-9-9."

Justice Brent Dickson dissented without a separate opinion. The 4-1 decision came down in Alberici Constructors, Inc. v. Ohio Farmers Insurance Co., 94S00-0612-CQ-488, which involved a federal contract dispute relating to an Indiana Department of Transportation bridge project near Bluffton.

Contractor Primco secured a performance bond with defendant Ohio Farmers Insurance Co. and later entered purchase agreements with three other companies for needed materials. The third, Hillsdale Fabricators or Alberici Constructors, delivered bridge pieces but was not paid by the second company, Gateway Bridge. The insurance company rejected a claim by Alberici, saying it was "too far removed to have standing." Alberici ultimately sued the insurance company in federal court, arguing that it could recover under the state's performance bond statute.

"Without a bright line defining where surety coverage extends, contractors would face an incalculable risk of liability for claims made by distantly remote suppliers or laborers on contracts made without contractor approval," the chief justice wrote, later adding that the statute doesn't extend coverage under a performance bond to any entity more remote than a second-tier laborer or material supplier.

However, he added that this holding doesn't mean parties working on state highway projects are left without any way to ensure payment. Advance payments or some other "financial understanding" could be reached, as well as additional contract arrangements to extend that coverage, the chief justice wrote. The General Assembly could also amend the statute, he wrote.
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  1. I will continue to pray that God keeps giving you the strength and courage to keep fighting for what is right and just so you are aware, you are an inspiration to those that are feeling weak and helpless as they are trying to figure out why evil keeps winning. God Bless.....

  2. Some are above the law in Indiana. Some lined up with Lodges have controlled power in the state since the 1920s when the Klan ruled Indiana. Consider the comments at this post and note the international h.q. in Indianapolis. http://www.theindianalawyer.com/human-trafficking-rising-in-indiana/PARAMS/article/42468. Brave journalists need to take this child torturing, above the law and antimarriage cult on just like The Globe courageously took on Cardinal Law. Are there any brave Hoosier journalists?

  3. I am nearing 66 years old..... I have no interest in contacting anyone. All I need to have is a nationality....a REAL Birthday...... the place U was born...... my soul will never be at peace. I have lived my life without identity.... if anyone can help me please contact me.

  4. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  5. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

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