SECTIONS 3247-3252 - California Statutes

CIVIL CODE

SECTION 3247-3252

3247. (a) Every original contractor to whom is awarded a contract
by a public entity, except as provided in subdivision (d) of Section
7103 of the Public Contract Code, involving an expenditure in excess
of twenty-five thousand dollars ($25,000) for any public work shall,
before entering upon the performance of the work, file a payment bond
with and approved by the officer or public entity by whom the
contract was awarded.
A public entity shall state in its call for bids for any such
contract that a payment bond is required in the case of such an
expenditure.
(b) A payment bond filed and approved in accordance with this
section shall be sufficient to enter upon the performance of work
under a duly authorized contract which supplements the contract for
which such payment bond was filed, if the requirement of a new bond
is waived by the public entity.
(c) For purposes of this section, providers of architectural,
engineering, and land surveying services pursuant to a contract with
a public entity for any public work shall not be deemed an original
contractor and shall not be required to post or file the payment bond
required in subdivisions (a) and (b). This subdivision shall apply
to all contracts entered into subsequent to January 1, 1971.
The amendment to this section made during the 1980 portion of the
1979-80 Regular Session of the Legislature by Chapter 293 of the
Statutes of 1980, does not constitute a change in, but is declaratory
of, existing law.

3248. In order to be approved, the payment bond shall satisfy all
of the following requirements:
(a) The bond shall be in a sum not less than one hundred percent
of the total amount payable by the terms of the contract.
(b) The bond shall provide that if the original contractor or a
subcontractor fails to pay (1) any of the persons named in Section
3181, (2) amounts due under the Unemployment Insurance Code with
respect to work or labor performed under the contract, or (3) for any
amounts required to be deducted, withheld, and paid over to the
Employment Development Department from the wages of employees of the
contractor and subcontractors pursuant to Section 13020 of the
Unemployment Insurance Code with respect to the work and labor, that
the sureties will pay for the same, and also, in case suit is brought
upon the bond, a reasonable attorney's fee, to be fixed by the
court. The original contractor may require of the subcontractors a
bond to indemnify the original contractor for any loss sustained by
the original contractor because of any default by the subcontractors
under this section.
(c) The bond shall, by its terms, inure to the benefit of any of
the persons named in Section 3181 so as to give a right of action to
those persons or their assigns in any suit brought upon the bond.
(d) The bond shall be in the form of a bond and not a deposit in
lieu of a bond.

3249. Suit against the surety or sureties on the payment bond may
be brought by any claimant, or his assigns, at any time after the
claimant has furnished the last of the labor or materials, or both,
but must be commenced before the expiration of six months after the
period in which stop notices may be filed as provided in Section
3184.

3250. The filing of a stop notice is not a condition precedent to
the maintenance of an action against the surety or sureties on the
payment bond. An action on the payment bond may be maintained
separately from and without the filing of an action against the
public entity by whom the contract was awarded or any officer
thereof. In any action, the court shall award to the prevailing party
a reasonable attorney's fee, to be taxed as costs.

3251. Unless a payment bond is filed and approved as provided in
this chapter, no claim in favor of the original contractor arising
under the contract shall be audited, allowed or paid by the public
entity awarding the contract or any officer thereof. Claimants shall
receive payment of their respective claims in the manner provided by
Chapter 4 (commencing with Section 3179) upon complying with the
provisions thereof.
This section shall become operative on the 181st day after it
becomes effective.

3252. (a) With regard to a contract entered into on or after
January 1, 1995, in order to enforce a claim upon any payment bond
given in connection with a public work, a claimant shall give the
20-day public works preliminary bond notice as provided in Section
3098.
(b) If the 20-day public work preliminary bond notice was not
given as provided in Section 3098, a claimant may enforce a claim by
giving written notice to the surety and the bond principal as
provided in Section 3227 within 15 days after recordation of a notice
of completion. If no notice of completion has been recorded, the
time for giving written notice to the surety and the bond principal
is extended to 75 days after completion of the work of improvement.