This paper examines both attorneys’-fees and interest awards against sureties on Miller Act payment-bond claims. It also suggests several policy arguments against imposing attorneys’ fees and interest awards on sureties. By: Daniel R. Hansen and William H. Sturges

1. When is the Surety Liable for Attorneys’ Fees and Interest
on Miller Act Payment-Bond Claims?
by
William H. Sturges and Daniel R. Hansen
I. INTRODUCTION
The Federal Miller Act1
Subcontractors and suppliers who furnish labor or materials directly to a
contractor, or directly to a subcontractor of the subcontractor, enjoy payment-
bond rights. Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tompkins
Co., 322 U.S. 102, 64 S. Ct. 890 (1944). Consequently, a second-tier
subcontractor can claim on the contractor’s payment bond due to the second-tier
subcontractor’s subcontract with the first-tier subcontractor, but third-tier and
lower subcontractors and suppliers cannot. J.W. Bateson Company, Inc. v.
United States ex rel. National Auto. Sprinkler Indus. Pension Fund, 434 U.S. 586,
98 S. Ct. 873 (1978). Though the Miller Act is clear about who may recover, it is
unclear about what may be recovered. Its old codification simply stated that the
claimant could recover “sums justly due.” The present codification says simply
that claimants “may bring a civil action on the payment bond for the amount
unpaid [and] may prosecute the action . . . for the amount due.” 40 U.S.C.
§ 133(b)(1) (emphasis added). And like its predecessor, the present codification
says nothing about attorneys’ fees and interest.
This paper examines both attorneys’-fees and interest awards against
sureties on Miller Act payment-bond claims. It also suggests several policy
arguments against imposing attorneys’ fees and interest awards on sureties.
As explained in Section II, “Attorneys’ Fees,” federal courts in most circuits
have case law derived from the U.S. Supreme Court case F.D. Rich v. U.S. ex
rel. Industrial Lumber, 417 U.S. 116, 94 S. Ct. 2157 (1974), addressing
recoverability of attorneys’ fees in Miller Act payment-bond claims. Not all
circuits, however, are consistent in how they interpret F.D. Rich. Some require
the federal court to look in part to state law to determine whether attorneys’ fees
are recoverable. Most do not.
It used to be that sureties could take a narrow view of F.D. Rich and argue
that attorneys’ fees were never available to payment-bond claimants under the
Miller Act. This view, however, has been under attack since the 1974 F.D. Rich
decision. It is now more likely that payment-bond claimants can recover
attorneys’ fees so long as they have a clause in their subcontract or supply
agreement allowing them. The danger and important lesson for sureties is that
1
40 U.S.C. § 3131 et seq. Formerly, the Miller Act was codified under § 40 U.S.C § 270a
et seq., and several of the cases cited in this paper refer to the old sections.

2. they usually issue payment bonds for federal projects having seen only the
contract between the owner/obligee and the general contractor. But if a
subcontract or second-tier subcontract (which the surety likely has never seen)
contains an attorneys’-fees clause, the surety may be liable for attorneys’ fees.
As explained in Section III, “Interest,” courts usually look to the relevant
state law to determine whether interest is recoverable. See, e.g., United States
ex rel. Pratt Farnsworth, Inc. v. Talley, 294 F. Supp. 1345 (E.D. La. 1969) (state
law in Miller Act claims controls interest rate and time when it accrues). But as
this paper demonstrates, federal courts may omit this step and rely solely on
what can only be described as federal common law when awarding interest.
Section IV offers several policy arguments that surety counsel could use
to resist the modern trend of holding sureties liable for attorneys’ fees and
interest.
II. ATTORNEYS’ FEES
Analyzing an attorneys’-fees claim in a Miller Act payment-bond action
begins with the F.D. Rich case. In F.D. Rich a second-tier subcontractor/supplier
sued the general contractor and its surety on a Miller Act payment-bond claim.
The High Court refused, however, to allow the second-tier subcontractor’s claim
for attorneys’ fees against the general contractor and surety. 417 U.S. at 121,
94. S. Ct. at 2161. The Court followed the “American Rule” governing attorneys’-
fees awards: “attorneys’ fees are not ordinarily recoverable in the absence of a
statute or enforceable contract providing therefore.” Id. at 126, 94 S. Ct. at 2163.
Since the Miller Act, the F.D. Rich case, and many of the cases cited throughout
this paper, make clear that there is no federal statute concerning attorneys’-fees
awards in Miller Act payment-bond claims; thus, the operative part of the
“American Rule” seems to be “enforceable contract providing [for attorneys’
fees].” In other words, if the payment-bond claimant can show there is an
enforceable attorneys’-fees clause in its contract, then the modern trend is to
hold the surety liable for attorneys’ fees.
But where should the court look to decide whether an attorneys’-fees
contract clause is enforceable? One could argue that the federal courts may not
look to state law. For instance, the F.D. Rich Court explained unequivocally that
“the scope of the remedy [under the Miller Act] as well as the substance of the
rights created thereby is a matter of federal, not state law.” Id. at 127, 94 S. Ct.
at 2164. The High Court went on to explain that there is no “evidence of
Congressional intent to incorporate state law to govern such an important
element of the Miller Act litigation as liability for attorneys’ fees.” Id. Indeed, the
Court feared that turning to state law could potentially create 50 different
attorneys’-fees rules, and in the case of federal projects that are in more than
one state, could lead to conflicting and confusing attorneys’-fees standards:
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3. Many federal contracts involve construction in more than one
state, and often, as here, the parties to Miller Act litigation
have little or no contact, other than the contract itself, with
the state in which the federal project is located. The
reasonable expectations of such potential litigants are better
served by a rule of uniform national application. . . . We
think it better to extricate the federal courts from the morass
of trying to divine a ‘state policy’ as to the award of attorneys’
fees in suits on construction bonds. [Id. at 127-28, 94 S. Ct.
at 2164]
Consequently, the Court seemed to favor a bright-line rule that attorneys’
fees are not at all controlled by state law. If such a rule is contrary to
Congressional intent, then Congress could change the Miller Act:
Congress is aware of the issue. Thus, whatever the merit of
arguments for a further departure from the American Rule in
Miller Act commercial litigation, those arguments are
properly addressed to Congress. [Id. at 131, 94 S. Ct. at
2166]
Since the F.D. Rich case makes clear that the Miller Act does not address
attorneys’ fees and since the federal courts should not look to state law, it could
be argued that payment-bond claimants in Miller Act cases should not be allowed
to recover attorneys’ fees—at least not from the surety or parties with whom the
claimant did not have a contract.2
The modern trend seems to be that federal courts are willing to award
attorneys’ fees—and interest for that matter—whenever the bond claimant has a
contract clause allowing for them. Often these courts do not rely on the F.D.
Rich decision. Accordingly, and disturbingly for sureties, more and more cases
are being decided that simply say a bond claimant may recover attorneys’ fees
against the surety if there is an attorneys’-fees clause in the bond claimant’s
contract. There may be no or little analysis as to whether this decision is allowed
under the Miller Act itself or the F.D. Rich decision. Many circuits make no
determination about whether the attorneys’-fees contract clause is even
2
Indeed, these authors made such an argument on behalf of a surety in a recent federal
district court case in North Carolina. Despite apparent absent authority from F.D. Rich, the
court ruled against the surety and awarded attorneys’ fees to a second-tier subcontractor
simply because there was Fourth Circuit precedent allowing such a recovery when the
bond claimant had a contract clause allowing attorneys’ fees. See United States ex rel.
SCCB, Inc. d/b/a Stewart Construction Co. v. P. Browne & Assoc., 2010 WL 4644438
(M.D.N.C. Nov. 9, 2010). Though the SCCB court found that Fourth Circuit precedent
disposed the issue and did not require examining state law on attorneys’-fees clause
enforceability, the court held that the attorneys’-fees contract clause at issue would have
been enforceable under North Carolina law.
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4. enforceable. See, e.g., United States ex rel. Maddux Supply Co. v. St. Paul Fire
& Marine Ins., 86 F.3d 332 (4th Cir. 1996). In contrast, some circuits may require
the bond claimant to establish that the attorneys’-fees clause is enforceable
under state law. See, e.g., United States ex rel. Reed v. Callahan, 884 F.2d
1180 (9th Cir. 1989), cert. denied 493 U.S. 1094 (1990).
The Maddux decision is typical of the “modern trend” cases and deserves
closer attention. In Maddux, a supplier of a subcontractor on a federal
construction project sued the general contractor and its surety under the Miller
Act. Id. at 334. The supplier and subcontractor had conducted business under
the terms of a credit application for several years before the subcontractor
entered into a contractual relationship with the general contractor. Id. at 334 &
336. The credit application contained a clause requiring the subcontractor to pay
all costs of collecting any outstanding amount owed to the supplier, including
“reasonable attorneys’ fees.” Id. at 334. After a bench trial, the district court
awarded damages to the supplier, including attorneys’ fees, and the Fourth
Circuit Court of Appeals affirmed the entire award. Id.
The Maddux Court had little analysis of the attorneys’-fees issue, and the
court did not address F.D. Rich. Instead, the court reasoned that the attorneys’-
fees award was proper for two reasons. The first was simply that other circuits
had done the same thing in similar Miller Act cases—the Eleventh Circuit in
United States ex rel. Southeast Mun. Supply Co. v. National Union Fire Ins. Co.
of Pittsburgh, 876 F.2d 92, 93 (11th Cir. 1989), the Fifth Circuit in United States
ex rel. Carter Equip. Co. v. H.R. Morgan, Inc., 554 F.2d 164, 165-66 (5th Cir.
1977),3 and the Ninth Circuit in United States ex rel. Reed v. Callahan, supra (but
failing to note that in the Reed case, the court analyzed whether the contract
clause was enforceable under state law).
Aside from the “everyone else is doing it” argument, the Maddux court’s
second reason was that payment-bond claimants are entitled to recover “sums
justly due.” This is probably the payment-bond claimants’ most persuasive
argument. In other words, the purpose of the Miller Act is to protect payment-
bond claimants and pay them everything that they are contractually entitled to
recover so that they receive the benefit of their bargain. Accordingly, the Maddux
court concluded:
3
The Southeast Municipal Supply case remains the law in the Eleventh Circuit. In that case the
court simply cited to a Fifth Circuit case, the Carter Equipment case, and held that sureties are liable
for a second-tier supplier’s attorneys’ fees simply because there was “a contractual provision
between [the] supplier . . . and [the] subcontractor . . . for the recovery of attorneys’ fees.” 876 F.2d
93. The Carter Equipment case is still good Fifth Circuit law having been cited at least twice since the
Fifth and Eleventh Circuits split in 1981. See United States ex rel. American Bank v. C.I.T. Constr. Of
Texas, 944 F.2d 253, 256 (5th Cir. 1991) and United States ex rel. Howell Crane Serv., 861 F.2d 110, 114
(5th Cir. 1988). The court in Carter Equipment found the surety liable because (1) attorneys’ fees
would be considered “sums justly due,” which the Miller Act at that time permitted a claimant to
recover, and (2) the Miller Act does not expressly prohibit awarding fees against the surety or
general contractor. 554 F.2d at 165-66.
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5. The rationale of those [Eleventh, Fifth, and Ninth Circuit]
decisions—that attorneys’ fees and interest may be ‘sums
justly due’ under the Miller Act—is consistent with this court’s
rulings that contractors and their sureties are obligated to
pay amounts owed by their subcontractors to suppliers . . . .
Accordingly, if [the supplier] was entitled to interest and
attorneys’ fees under its contract with [the subcontractor], it
may recover interest and fees from [the general contractor]
and its [surety]. [86 F.3d at 336 (internal citations omitted)]
Even though the Miller Act’s recodification eliminated the phrase “sums
justly due,” courts continue to rely on this concept to award fees and interest
against sureties. See, e.g., SCCB, Inc., 2010 WL 4644438 at *5.
III. INTEREST
The Miller Act is silent as to the recovery of interest, and therefore, federal
courts will look to state law. United States v. American Manufacturers Mut. Cas.
Co., 901 F.2d 370, 372-73 (4th Cir. 1990); SCCB, Inc., 2010 WL 4644438 at *8.
Accordingly, the surety should look to the relative state law to determine whether
it is liable for pre- or postjudgment interest and to determine when such interest
begins to run. Typically, the state-law analysis results in the surety being liable
for interest from the date that the bond-claimant’s subcontract was breached.
See J.F. White Engineering v. U.S. ex rel. Pittsburgh Plate Glass, 311 F.2d 410
(10th Cir. 1962). But even if the surety appears to have a good argument to avoid
paying interest or have the interest calculation begin at a favorable date, the
surety must beware of “sweeping” circuit-court decisions that award interest
(usually along with attorneys’ fees) with little or no analysis. See, e.g., Maddux,
86 F.3d at 334.
In Maddux, the subcontractor’s credit application with the supplier stated
that “a 1½% monthly service charge will be added to all accounts not paid within
30 days after due date.” Id. Applying the same reasoning it had used for
attorneys’ fees, the court held that since the supplier was entitled to interest from
the subcontractor under the credit application, it could recover this interest from
the general contractor and surety as a “sum justly due” under the Miller Act. Id.
The Maddux court, however, did not specifically analyze state law to
determine whether interest was recoverable against a surety, and if so, when that
interest began to run. In the SCCB, Inc. case, the surety’s lawyers pointed this
out to the court while presenting arguments that under North Carolina statutory
law, a surety cannot be liable for interest until the date of judgment against the
surety, and only then, postjudgment interest would be capped at the statutory
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6. rate of eight percent.4 The SCCB, Inc. court refused to entertain the surety’s
argument that state law prohibited prejudgment interest against the surety,
instead holding that since the Maddux court awarded interest to the bond
claimant against the surety as a “sum justly due,” it would do the same.
The Maddux and SCCB cases notwithstanding, not all is gloom and doom
for the surety. If the bond claimant unjustifiably delayed notifying the surety of its
bond claim, courts usually will award interest against the surety only from the
date the surety gets notice. See, e.g., American Auto Ins. v. U.S. ex rel. Luce,
269 F.2d 406 (1st Cir. 1959). Also, if the bond claimant’s damages were truly not
known or reasonably calculable (often described as “not liquidated”) prior to suit
being filed, then there may be no prejudgment interest award against any party,
including the surety. See, e.g., United States ex rel. W.A. Rushlight Co. v.
Davidson, 71 F. Supp. 401 (D.C. Idaho 1947). Or, if prejudgment interest is
allowed in such a case, the surety’s liability commences only from the date suit
was commenced. United States ex rel. Belmont v. Mittry Bros. Constr., 4 F.
Supp. 216 (D.C. Idaho), aff’d in part, 75 F.2d 79 (1933).
So what is the lesson for sureties? On the one hand, the authorities refer
the courts to state law to decide interest awards. But on the other hand, they
may very well simply cite to a federal-court decision awarding interest without
any state-law analysis. In fairness to the latter courts, those courts may simply
look to state law to decide whether a contract rate of interest is enforceable. And
if it is enforceable, then they may simply award that rate against the surety,
regardless of whether the surety has other state-law arguments against paying
interest. In spite of the unfavorable decision in SCCB, a surety should vigorously
oppose or limit interest awards by whatever state-law means are available,
especially if the state contains a penal-bonds statute like North Carolina.
Examples of some state-law interest rules are as follows:
4
North Carolina appears to except penal bonds from prejudgment interest and allows
postjudgment interest only at the legal rate. See N.C. Gen. Stat. § 24-5. The relevant
language is as follows:
(a) Actions on Contracts. In an action for breach of contract, except an
action on a penal bond, the amount awarded on the contract bears interest
from the date of breach. . . .
(a1) Actions on Penal Bonds. In an action on a penal bond, the amount of the
judgment, except the costs, shall bear interest at the legal rate from the date
of entry of judgment under G.S. 1A-1, Rule 58, until the judgment is satisfied.
[N.C. Gen. Stat. § 24-5(a) & (a1) (emphasis added)].
Thus, a payment-bond claimant cannot recover prejudgment interest on its payment-
bond claim. The claimant also could recover only postjudgment interest at the 8% legal
rate and not at the higher rate stated in the lower-tier subcontract.
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7. North Carolina
• Legal rate 8% pre- and postjudgment. N.C. Gen. Stat. § 24-1.
• Interest accrues when the contract is breached. Id. at § 24-5(a).
• Contract interest rates are enforceable, but contract rates apply
postjudgment only if the contract specifically states that the rate
applies postjudgment. Id.
• The above notwithstanding, prejudgment interest is not collectible
on “penal bonds,” and postjudgment interest on penal bonds is
capped at the legal rate of 8%. Id. at 24-5(a1).
South Carolina
• Legal rate 8.75% prejudgment. S.C. Code Ann. § 34-31-20(A).
• Postjudgment interest rate is the prime rate as ordered by the state
Supreme Court each year, plus four percentage points. Id. at 34-
31-20(B).
• Interest accrues when a sum certain becomes “demandable.”
Welding Works v. K&S Constr., 332 S.E.2d 102 (S.C. App. 1985).
• Contract rates are enforceable if the contract identifies rates that
differ from the legal rates. Burnett Dubose Co. v. Starnes, 324
S.E.2d 651 (S.C. App. 1984).
Georgia
• Legal rate 7% prejudgment. Ga. Code Ann. § 7-4-2.
• Postjudgment interest rate is the prime rate plus three percentage
points. Id. at § 7-4-12.
• Interest accrues when a party becomes legally bound to pay its
obligation. Id. at § 7-4-15.
• Contract rates are enforceable if the contract identifies rates that
differ from the legal rates. Id. at § 7-4-2 & 7-4-12.
• Sureties can be made to pay interest up to 25% of their bond
obligations if they fail to pay their bond obligations in bad faith, and
within 60 days that such obligations became due. Id. at § 10-7-30.
Alabama
• Legal rate 6% prejudgment. Ala. Code § 8-8-10.
• Postjudgment interest rate is 12%. Id.
• Interest accrues when the contract is breached and the amount
owed is liquidated. Id.
• Contract interest rates are generally enforceable, but certain
statutory caps may apply. Id. at § 8-8-1.
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8. IV. PUBLIC POLICY ARGUMENTS AGAINST HOLDING SURETIES
LIABLE FOR SUBCONTRACTOR/SUPPLIERS’ ATTORNEYS’ FEES
AND INTEREST
There are several policy arguments against allowing a
subcontractor/supplier to recover attorneys’ fees from the surety. Policy
arguments, however, may find little support in the federal courts. For example,
the Maddux court upheld the attorneys’-fees award even though the attorneys’-
fees clause was not in the supplier’s subcontract but was contained in a credit
application that the supplier had entered into three years before the federal
project. 86 F.3d at 336. These authors have not found court decisions where
the policy arguments offered here have been analyzed.
1. The Surety Lacks Privity With or Knowledge of the Subcontractor/Supplier
Principal among policy arguments for the surety is that the surety may not
be aware that lower-tier subcontractors/suppliers even exist. When the surety
agrees to issue a payment bond for a project, the only contract it may see is the
one between the owner/obligee and the general contractor. It may not know
which subcontractors the general contractor is going to hire. It certainly will not
know which sub-subcontractors and lower-tier subcontractors/suppliers may be
hired. So the result of Maddux and similar decisions is that a surety could be
liable for attorneys’ fees without privity of contract, without some form of
equitable or constructive knowledge of a contract, and with no practical way to
predict potential contract liability going forward. How can this be? One could
understand such a rule if there were a federal statute providing it. But we know
that the Miller Act does not address the issue. Thus, there seems to be an
evolving federal common law that is coming down decidedly against the
sureties.5
5
In Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817 (1938), Justice Brandeis
famously, and perhaps prematurely, wrote that “except in matters governed by the Federal
Constitution or by Acts of Congress, the law to be applied in any case is the law of the
State. . . . There is no federal common law.” Id. at 78, 58 S. Ct. at 822. As the esteemed
federal-practice treatise writers Wright and Miller point out, Justice Brandeis’ “statement
is not completely accurate.” 19 Charles A. Wright, et al., Federal Practice and Procedure
§ 4514 (2d ed. 1996). Courts continue to create federal common law, but the practice of
doing so is not “common.” Nevertheless, there are certain areas that tend to invite federal
common law, and one of those is where a statute addresses the area of law at issue but is
missing some detail that is needed to fully adjudicate the dispute—sometimes referred to
as “filling the interstices.” Id. at § 4516. In Miller Act cases, there is a statute that
addresses most aspects of a payment-bond claim in a federal project. But the statute is
silent on interest and attorneys’ fees. Yet the statute has historically expressed a purpose
to compensate the claimant for all sums “justly due.” Thus, decisions such as Maddux,
may be needed interstitial federal common law.
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9. 2. The Surety is “Darned” if it Pays the Claimant and “Darned” if it Contests
the Claim
A surety is a secondary obligor in Miller Act construction cases. If the
contractors fail to pay their subcontractors and suppliers, then those
subcontractors and suppliers have a secondary source to look to for payment.
That secondary source is the payment bond. But just because a payment-bond
claimant makes a claim does not mean the claimant is entitled to be paid. The
claimant’s work may be defective or incomplete. These possibilities justify the
surety and its principal contesting the claim. On the other hand, fearing interest
at a high contract rate and attorneys’ fees, the surety may be inclined to pay the
claim, even if it is suspect. By paying the claim, however, the surety risks losing
its right to be indemnified by the bond principal and other indemnitors. This is
because the surety issues a bond on a construction job knowing that it is not an
insurer, but merely lending its credit and promising to pay if its principal fails to do
so. Once the surety makes a payment, it has a right of indemnity against its
principal and indemnitors to be completely reimbursed. Accordingly, the surety
usually enters into general indemnity agreements with its principal and
indemnitors to assure its right to be reimbursed if the surety ever has to pay a
payment-bond claim. But if the surety pays the claim when its principal believes
the claim should not have been paid because the claimant’s work was defective
or incomplete, the principal and indemnitors can use that argument to resist
indemnifying the surety. Sometimes this is called the “payment in bad faith”
defense.
Thus, a surety is in a nearly irreconcilable dilemma or “catch-22.” If the
surety could be liable for a high contract rate of interest or attorneys’ fees that it
never agreed to, the surety will have incentive to pay dubious payment-bond
claims and risk being unable to get reimbursed by its principal and indemnitors.
This is another reason why taking the narrow view of the F.D. Rich holding – that
attorneys’ fees should never be recoverable – makes sense. It is also a logical
reason why the North Carolina legislature, for example, would relieve penal
bonds from prejudgment interest and contract rates of interest in § 24-5 (a1). If
the United States were to amend the Miller Act to allow attorneys’ fees and
prejudgment interest against sureties, then sureties could adjust their premiums
and underwriting practices accordingly to plan for such potential extra liability.
3. A Surety’s Liability for Prejudgment Interest and Attorneys’ Fees is Unfair
to Other Bond Claimants.
There is also a substantial public-policy purpose to limit payment-bond
claims to amounts equal to labor and materials. Payment bonds are penal bonds
and have a cap on liability. The cap is the estimated total cost for labor and
materials on the project. It does not include amounts for interest and attorneys’
fees. Thus, in allowing claims for attorneys’ fees and interest under the Miller
Act, there may not be a sufficient amount of bond funds to cover all claims. Later
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10. claimants would not get paid for their labor and materials if earlier claimants
receive not only their labor and materials, but also attorneys’ fees and interest.
4. Recovering Attorneys’ Fees Against the Surety for Litigation Between the
Second-Tier Subcontractor/Supplier and First-Tier Subcontractor is Unfair
Making the surety liable for a second-tier subcontractor/supplier’s
attorneys’ fees is fair only if the attorneys’ fees are incurred in litigation between
the second-tier subcontractor and the surety. But logic and litigation experience
suggest that a high percentage of a second-tier subcontractor’s attorneys’ fees
was incurred in the legal battle and discovery exchanges with the first-tier
subcontractor. Only a small percentage of the second-tier subcontractor’s
attorneys’ fees, if any, would concern litigating against the surety or its principal,
the general contractor. In any event, it would be difficult to separate the amount
of attorneys’ fees attributable to litigation between the second-tier subcontractor
and first-tier subcontractor versus litigation between the second-tier
subcontractor and the surety/principal. Thus, awarding attorneys’ fees against
the surety is both unfair and hard to measure.
V. CONCLUSION
The modern trend is to award attorneys’ fees against the surety whenever
the bond claimant’s contract contains an attorneys’-fees clause. In a minority of
districts, the court might examine state law to determine whether the attorneys’-
fees clause is enforceable. But in spite of the narrow view of F.D. Rich—that
attorneys’ fees should not be recoverable—many districts will readily find
precedent for awarding attorneys’ fees without determining whether the
contract’s attorneys’-fees clause is enforceable. These district courts simply
“assume” the clause is enforceable or they are applying an emerging federal
common-law principle. The same federal common law has crept into federal
decisions that now seem to routinely award interest against sureties.
Nevertheless, interest is still largely state-law driven, and sureties should be on
the look out for state laws that either eliminate interest against sureties or
calculate interest at terms more favorable to sureties than other parties.
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11. BIOGRAPHY OF DANIEL R. HANSEN
DANIEL R. HANSEN is a partner in the litigation practice group in the Charlotte,
North Carolina office of Shumaker, Loop & Kendrick, LLP. His principal areas of
practice are commercial and business litigation, construction law, fidelity and
surety law, and wrongful-death and severe personal injury litigation.
Mr. Hansen has extensive experience in representing businesses of all sizes in a
variety of legal disputes and commercial transactions. He devotes approximately
fifty percent of his practice to construction and surety law, representing
contractors, owners, sureties and construction materials manufacturers. Mr.
Hansen has extensive experience representing window manufacturers in
commercial and residential claims, both in federal and state courts throughout
the Southeast. He also has substantial experience in shareholder disputes,
broker-dealer litigation, non-compete litigation, insurance bad-faith litigation,
coverage disputes, representation of local governments and non-profit
organizations and high-value wrongful-death and personal-injury claims.
REPRESENTATIVE ARTICLES
• Co-Author, “Men Behaving Badly: What are the Surety’s Defenses to the
Obligee’s Latent-Defect Claims When the Principal and Obligee’s Employees Act
Fraudulently?” Northeast Surety Conference, September 23-25, 2009, Atlantic
City, New Jersey, and Southeast Surety Conference, April 14-16, 2010,
Charleston, South Carolina.
• Co-Author, "North Carolina," in Performance Bond Manual of the 50 States,
District of Columbia, Puerto Rico and Federal Jurisdictions 429-56 (L. Lerner & T.
Baum eds. 2006).
• Co-Author, "The Employer's Guilty Plea as a Possible Bar to Fidelity Bond
Claims," 16th Annual Northeast Surety and Fidelity Claims Conference
Proceedings, sect. 11, pp. 1-11 (September 2005).
• "Do We Need the Bar Examination? A Critical Evaluation of the Justifications
for the Bar Examination and Proposed Alternatives," 45 Case Western Res. L.
Rev. 1191, 1995.
• Co-Author, "The Hasty Embrace of Critical Thinking by Business Law
Educators," 9 J. Legal Stud. Educ. 515, 1991.
• Co-Author, "Critical Thinking is Distinct from Thinking Like a Lawyer," in
Selected Papers of the American Business Law Association National
Proceedings 169-284 (D. Herron ed. 1990).
SLK_CHA: #350559v1 11

12. PRESENTATIONS
• "The Fundamentals of Construction Contracts: Understanding the Issues in
North Carolina," Lorman Education Services Seminar, Asheville, North Carolina,
December 11, 2008.
• "The Fundamentals of Construction Contracts: Understanding the Issues in
North Carolina," Lorman Education Services Seminar, Charlotte, North Carolina,
July 22, 2008.
• Co-Author and Lecturer, "Update on Civil Practice Basics," Mecklenburg
County Bar Association, February 2005.
• Co-Author and Lecturer, "Litigation: Basics A to Z," Mecklenburg County Bar
Association, December 2003.
SETTLEMENTS, VERDICTS AND REPORTED DECISIONS
• 2010. Excluded experts and obtained summary judgment in multi-million
dollar products-liability case. Snoznik v. JELD-WEN, INC., 2010 WL 1924483
(W.D.N.C. May 12, 2010)
• 2008. Negotiated $4 million settlement for traumatic-brain injury victim (details
confidential).
• 2007. Achieved $2.64 million settlement with taverns for wrongful-death
victims even though there were no eye-witnesses who would testify that they saw
the drunk driver being served alcohol while intoxicated. http://www.slk-
law.com/pdf/nc-lawyers-weekly-article.pdf.
• Oct. 2, 2007. Overturned summary judgment in reported decision: Park East
Sales, LLC v. Clark-Langley, Inc., 186 N.C. App. 198, 651 S.E.2d 235 (2007),
rev. denied, 362 N.C. 360, 661 S.E.2d 736 (2008).
http://www.aoc.state.nc.us/www/public/coa/opinions/2007/pdf/061496-1.pdf.
• Dec. 1, 2000. Obtained highest soft-tissue injury jury verdict in county history,
per judge presiding in: Dr. Stephen R. Byrd v. Moddassir M. Ali, Davidson County
Superior Court, case no. 99-CVS-2352.
EDUCATION
• Case Western Reserve University 1995, J.D., magna cum laude, Order of the
Coif, law review
• Bowling Green State University 1990, B.A., summa cum laude, Phi Beta Kappa
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13. BIOGRAPHY OF WILLIAM H. STURGES
WILLIAM H. STURGES has extensive experience representing fidelity and surety
companies in all types of litigation. He has been a trial attorney for over 30
years, has a Martindale-Hubble Rating of AV, and has been repeatedly selected
as a North Carolina Super Lawyer and for inclusion in Best Lawyers of America.
He has taught trial advocacy for the National Institute of Trial Advocacy at their
regional programs for over 20 years. Mr. Sturges has written numerous articles
on surety and fidelity law and is co-author of the North Carolina Section of the
Performance Bond Manual published by the ABA in 2005. He is a Member of the
North Carolina Bar and is admitted to the federal courts in North Carolina and
Fourth Circuit Court of Appeals. He received his Juris Doctorate from Wake
Forest University (cum laude) and his BA from Washington & Lee University
(cum laude).
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