Payment-Bond Proof and Attorney Fees: Erie Materials

Reviewed September 7, 2026.

In Erie Materials, Inc. v. Universal Group of New York, Inc., 101 AD3d 1529 (2012), the Third Department affirmed a supplier's recovery against a public-project payment-bond surety. The subcontractor had falsely claimed that it paid the supplier, then left without paying.

The supplier established its initial entitlement to judgment with testimony and records showing that it furnished $46,512 in materials for the project. The court rejected the asserted requirement that every item be physically delivered to and installed at the project site.

Fees require more than winning

The court also upheld an attorney-fee award. Under State Finance Law § 137(4)(c), the court may award reasonable fees to either party where the original claim or defense lacks a substantial basis in fact or law. An unsuccessful defense alone does not satisfy that standard.

Suppliers should retain orders, invoices, project identification and payment records. Contractors and sureties should investigate the actual disputed amount and supporting evidence. This historical decision does not eliminate timely notice, claimant eligibility or the other requirements of a bond claim.

Kushnick Pallaci PLLC assists clients throughout New York with surety and payment-bond litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Federal Miller Act and New York Public Payment Bonds: Different Deadlines

Reviewed September 7, 2026.

A payment bond can provide a recovery route when a contractor or supplier is unpaid on public work. First identify the public owner, the governing law, the claimant's contractual tier and the actual bond.

Federal projects

Under 40 USC § 3133, qualifying unpaid claimants generally must wait 90 days after their last covered work or materials before suing. A claimant contracting directly with a subcontractor, but not with the bonded contractor, must give that contractor the required notice within 90 days. Suit generally must begin within one year after the claimant's last labor or materials. Notice and suit are separate requirements.

The current FAR 28.102-1 generally requires payment and performance bonds for covered federal construction contracts exceeding $150,000, subject to its exceptions; smaller contracts may require alternative payment protection.

New York state and local projects

State Finance Law § 137 uses different rules, including a 120-day notice requirement for specified lower-tier claimants and a suit deadline tied to completion and acceptance of the public improvement, with a stated statutory exception. Do not import federal deadlines into a New York bond claim. Obtain the executed bond and preserve all potentially applicable deadlines promptly.

Kushnick Pallaci PLLC assists clients throughout New York with payment-bond claims and disputes. Contact 631-752-7100 or vtp@kushnicklaw.com.

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New York Public Payment Bonds: Completion and Acceptance Matter

Reviewed September 7, 2026.

This article originally reported a 2011 amendment. The current text of State Finance Law § 137(4)(b) generally bars a statutory payment-bond action brought more than one year after the public improvement has been completed and accepted by the public owner, except as provided in Labor Law § 220-g.

Completion alone and a claimant's last day on the job are not interchangeable with this statutory trigger. Obtain the agency's completion and acceptance records, identify what improvement the bond covers, and record the applicable suit deadline.

Earlier notice obligations still apply

The completion-and-acceptance rule does not eliminate § 137(3)'s separate notice requirements. Certain claimants with a direct contract with a subcontractor but no express or implied contract with the bonded contractor must give the prescribed notice within 120 days after their last covered labor or materials. A claimant should not wait for project acceptance to investigate that obligation.

Confirm whether the bond is statutory, private, federal or otherwise governed by different terms. Sending a demand, negotiating with a surety or filing a lien should not be assumed to extend the bond-action deadline.

Kushnick Pallaci PLLC assists clients throughout New York with public payment-bond claims. Contact 631-752-7100 or vtp@kushnicklaw.com.

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