Apex Development Company, LLC v. State of Rhode Island Department of Transportation v. S&R/Pihl, A Joint Venture, LLC

Syllabus

The defendant and third-party plaintiff, the Rhode Island Department of Transportation, appealed from a Superior Court final judgment entered pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure in favor of the third-party defendants, Western Surety Company and the Insurance Company of the State of Pennsylvania. On appeal, RIDOT argued that the hearing justice erred when he determined that the terms of a performance and payment bond issued in conjunction with a public works project did not require the third-party defendants to indemnify RIDOT for claims that arose from the contractor's alleged failure to abide by the terms of the contract. RIDOT further argued that the third-party defendants were bound to perform under the bond, notwithstanding RIDOT's failure to declare the contractor in default of the contract and to provide notice to the third-party defendants before the project was completed. <br><br>The Supreme Court held that in the absence of a declaration of default and notice thereof to the third-party defendants, the performance and payment bond became null and void when the project was completed and all labor and materials were paid for. <br><br>Accordingly, the Supreme Court affirmed the Superior Court's grant of summary judgment and correlative final judgment in favor of the sureties and its denial of RIDOT's cross-motion for partial summary judgment.<br><br>