House Bill 1290

(As Sent to Governor)

AN ACT TO AMEND SECTIONS 85-7-187, 85-7-189, 85-7-191 AND 85-7-193, MISSISSIPPI CODE OF 1972, TO CLARIFY THE RIGHTS OF CLAIMANTS ON PERFORMANCE AND PAYMENT BONDS AND THE TIME AND MANNER FOR BRINGING SUIT ON SUCH BONDS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 85-7-187, Mississippi Code of 1972, is amended as follows:

85-7-187. If only a performance bond has been provided in accordance with this chapter and if no suit shall be brought by the obligee within six (6) months from thedate of the earlier of final completion or actual use or occupancy of the project for its intended purpose, then any person supplying * * * labor or materials to the bond principal on the project shall have a right of action on said bond for his use and benefit against saidbond principaland the sureties thereon and to prosecute same to final judgment and execution, subject to the rights and demands of the bond obligee.

SECTION 2. Section 85-7-189, Mississippi Code of 1972, is amended as follows:

85-7-189. (1) * * * Suit on a performance claim by an obligee on a bond given in accordance with this chapter shall be commenced as follows:

(a) If the obligee is the owner of the project being constructed, such obligee shall bring suit within one (1) year after the earlier of final completion or actual use or occupancy of the project for its intended purpose; or

(b) If the obligee is other than an owner of the project being constructed, such obligee shall bring suit within one (1) year after such obligee receives final payment with respect to the project.

(2) When suit is instituted on a claim for payment on a payment bond given in accordance with this chapter, it shall be commenced within one (1) year after the day on which the last of the labor was performed or material was supplied by the person bringing the action and not later.

(3) Any suit on a bond given in accordance with this chapter shall be brought in the county in which the contract or some part thereof was performed or in the county in which service of process may be obtained upon either the principal or the surety on such bond.

SECTION 3. Section 85-7-191, Mississippi Code of 1972, is amended as follows:

85-7-191. If only a performance bond is given in accordance with this chapter and if suit is * * * instituted on said performance bond only one (1) action shall be brought for performance and payment claims and any person * * * entitled to sue may upon application intervene and be made a party to said suit and such intervention must occur within the time limited for such person to bring an original action; provided, however, if a separate payment bond is given then only one (1) separate action for payment claims shall likewise be brought on the payment bond and intervention shall be allowed in accordance with this statute.

SECTION 4. Section 85-7-193, Mississippi Code of 1972, is amended as follows:

85-7-193. If only a performance bond is given in accordance with this chapter and the recovery on the performance bond should be inadequate to pay the full amount found due including amounts due the obligee, judgment shall be given after the performance bond obligee is fully satisfied for all its claims, demands, rights and damages to each person, including reasonable attorney's fees in an amount to be set by the judge, pro rata of the amount of the recovery. The surety on said performance bond may pay into court for distribution the full amount of its liability, less any amount which may have been paid to the performance bond obligee by reason of the execution of said bond, and upon so doing the surety will be relieved from further liability.

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SECTION 5. This act shall take effect and be in force from and after July 1, 2005.