Minnesota Session Laws - 2001, Regular Session

                            CHAPTER 52-S.F.No. 1419 
                  An act relating to payment bonds; regulating notices 
                  of claims; amending Minnesota Statutes 2000, section 
                  574.31, subdivision 2.  
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 574.31, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CLAIMS ON PAYMENT BONDS.] (a) In the event of a 
        claim on a payment bond by a person furnishing labor and 
        materials, no action shall be maintained on the payment bond 
        unless, within 120 days after completion, delivery, or provision 
        by the person of its last item of labor and materials, for the 
        public work, the person serves written notice of claim under the 
        payment bond personally or by certified mail upon the surety 
        that issued the bond and the contractor on whose behalf the bond 
        was issued at their addresses as stated in the bond specifying 
        the nature and amount of the claim and the date the claimant 
        furnished its last item of labor and materials for the public 
        work.  The addresses of the contractor and the surety listed on 
        the bond must be addresses at which the companies are authorized 
        to accept service of the notice of the claim.  If an agent or 
        attorney-in-fact is authorized to accept service of notice of 
        the claim for the contractor or surety, that fact must be 
        expressly stated in the bond along with the address of the agent 
        or attorney-in-fact at which service of the notice of the claim 
        can be made.  For the purpose of this section, notice is 
        sufficient if served personally or via certified mail to the 
        addresses of the contractor and surety listed on the bond.  The 
        form of notice is sufficient if it is substantially as follows: 
                NOTICE OF CLAIM ON PAYMENT BOND FOR PUBLIC WORK
              TO:  ...................................................
                        (Surety that issued payment bond)
              and ....................................................
                  (The contractor on whose behalf the bond was issued)
                 NOTICE IS HEREBY GIVEN that the undersigned claimant
              has a claim against the above named surety for labor and
              materials furnished by the undersigned for the public
              work described as follows:  ............................
              ........................................................
                        (Description of the public work)
              The labor and materials were furnished under a
              contract or agreement with .............................
              ........................................................
              (Name and address of contractor or supplier requesting
                   labor and materials from the claimant)
              The nature of the labor and materials furnished is as
              follows:  ..............................................
              ........................................................
              The amount of the claim is:  ...........................
              The date the claimant last furnished labor and materials
              to this public work is the ... day of ..........., .......
              Claimant seeks payment of the claim according to the
              law.
                                                  ....................
                                                  Claimant
                                                  ....................
                                                  Address
                                                  ....................
             STATE OF ...............
                                  ss.
             COUNTY OF ..............
                  .................... being duly sworn on oath says
             that ... is .............. of the claimant named above and
             has knowledge of the claim and that the claim is correct,
             and no part of the claim has been paid.
                                             ......................
             Signed and sworn to before me
             on .............., .......,
             by .......................          (Notary Seal)
             ..........................
                    Notary Public
           (b) If the contractor providing the payment bond fails to 
        comply with the filing requirements of section 574.28 by failing 
        to state both its address or and the address of the surety 
        providing the bond, then a claimant under the bond need not 
        provide either the surety or the contractor written notice of 
        its claim under paragraph (a).  
           (c) An action to enforce a claim against the surety under 
        the bond must be commenced within one year from the date of 
        completion, delivery, or provision by the claimant of its last 
        item of labor and materials for the public work stated in its 
        notice of claim.  If no notice of claim was required because the 
        contractor providing the bond failed to comply with the 
        requirements of section 574.28, then any action under the bond 
        must be commenced within one year from the actual date of 
        completion, delivery, or provision by the claimant of its last 
        item of labor and materials for the public work.  Any other 
        person having a cause of action on a payment bond may be 
        admitted, on motion, as a party to the action, and the court 
        shall determine the rights of all parties.  If the amount 
        realized on the bond is insufficient to discharge all the claims 
        in full, the amount must be prorated among the parties.  
           (d) The claimant can extend the time within which to bring 
        an action to enforce a claim under the bond to beyond that 
        specified in paragraph (c) either by:  (1) written stipulation 
        between the claimant and surety stating the extended deadline 
        and executed by both parties before the expiration of one year 
        from the actual date of completion, delivery, or provision by 
        the claimant of its last item of labor and materials for the 
        public work; or (2) written notice extending by one year the 
        deadline specified in paragraph (c) sent by the claimant to the 
        surety via certified mail 90 days before the expiration of the 
        deadline specified in paragraph (c), which notice is not 
        objected to in a return written notice sent by the surety to the 
        claimant via certified mail within 30 days after the surety's 
        receipt of claimant's notice.  If a claimant's payment is not 
        yet contractually due within one year from the actual date of 
        completion, delivery, or provision by the claimant of its last 
        item of labor and materials, the court shall continue and not 
        dismiss the action until the payment is due. 
           Presented to the governor April 23, 2001 
           Signed by the governor April 26, 2001, 10:26 a.m.