Facts: A subcontractor performed public improvement work under a general contractor for a subdivision developer. The subcontractor served the city where the work took place with a 20-day preliminary bond notice for private work to receive payment from the insurance company responsible for payment should the general contractor fail to pay. The general contractor failed to pay the subcontractor. The subcontractor sought compensation from the insurance company. The insurance company refused to pay since it classified the work as public work, and the subcontractor filed notice for private work.
Claim: The subcontractor sought a payment bond from the insurance company since it completed the work as part of its contract and filed a 20-day preliminary bond notice for private work, akin to a notice for public work.
Counter claim: The insurance company claimed the subcontractor was not entitled to reimbursement since it failed to file the notice for public work required to receive payment on completion of its work, which the insurance company classified as public.
Holding: A California court of appeals held the subcontractor was not entitled to the payment bond since it performed public work, not private work, and thus did not file the correct 20-day preliminary bond notice to receive reimbursement for public work. [California Paving & Grading Co., Inc. v. Lincoln General Insurance Company (May 21, 2012)_CA_]
