Legal Fee Award in CRA Claim Limited to Bond
General contractors and sureties received a nice little Christmas gift late last week when the Washington Supreme Court issued its decision in Cosmopolitan Eng'g Group v. Ondeo Degremont. The case involved a claim made by an unpaid subcontractor against the Contractors Registration Act (RCW 18.27) bond issued to the general contractor. The issue in the case was whether the subcontractor, as the prevailing party, could recover its legal fees from the general contractor in addition to the bond itself.
The Court of Appeals said yes, and thus opened the door to substantial new liability for GCs since legal fee awards can easily exceed the $12,000 statutory bond amount. For WCL's background on the Court of Appeals decision, see here.
The Supreme Court reversed, holding the subcontractor could recovery its fee award only from the surety whose liability in turn is capped at the penal sum of the bond.