9550-9566

CIVIL CODE
SECTION 9550-9566




9550.  (a) A direct contractor that is awarded a public works
contract involving an expenditure in excess of twenty-five thousand
dollars ($25,000) shall, before commencement of work, give a payment
bond to and approved by the officer or public entity by whom the
contract was awarded.
   (b) A public entity shall state in its call for bids that a
payment bond is required for a public works contract involving an
expenditure in excess of twenty-five thousand dollars ($25,000).
   (c) A payment bond given and approved under this section will
permit performance of and provide coverage for work pursuant to a
public works contract that supplements the contract for which the
bond is given, if the requirement of a new bond is waived by the
public entity.
   (d) For the purpose of this section, a design professional is not
deemed a direct contractor and is not required to give a payment
bond.
   (e) This section does not apply to a public works contract with a
"state entity" as defined in subdivision (d) of Section 7103 of the
Public Contract Code.



9552.  If a payment bond is not given and approved as required by
Section 9550:
   (a) Neither the public entity awarding the public works contract
nor any officer of the public entity shall audit, allow, or pay a
claim of the direct contractor pursuant to the contract.
   (b) A claimant shall receive payment of a claim pursuant to a stop
payment notice in the manner provided by Chapter 4 (commencing with
Section 9350).



9554.  (a) A payment bond shall be in an amount not less than 100
percent of the total amount payable pursuant to the public works
contract. The bond shall be in the form of a bond and not a deposit
in lieu of a bond. The bond shall be executed by an admitted surety
insurer.
   (b) The payment bond shall provide that if the direct contractor
or a subcontractor fails to pay any of the following, the surety will
pay the obligation and, if an action is brought to enforce the
liability on the bond, a reasonable attorney's fee, to be fixed by
the court:
   (1) A person authorized under Section 9100 to assert a claim
against a payment bond.
   (2) Amounts due under the Unemployment Insurance Code with respect
to work or labor performed pursuant to the public works contract.
   (3) Amounts required to be deducted, withheld, and paid over to
the Employment Development Department from the wages of employees of
the contractor and subcontractors under Section 13020 of the
Unemployment Insurance Code with respect to the work and labor.
   (c) The payment bond shall be conditioned for the payment in full
of the claims of all claimants and by its terms inure to the benefit
of any person authorized under Section 9100 to assert a claim against
a payment bond so as to give a right of action to that person or
that person's assigns in an action to enforce the liability on the
bond.
   (d) The direct contractor may require that a subcontractor give a
bond to indemnify the direct contractor for any loss sustained by the
direct contractor because of any default of the subcontractor under
this section.



9558.  A claimant may commence an action to enforce the liability on
the bond at any time after the claimant ceases to provide work, but
not later than six months after the period in which a stop payment
notice may be given under Section 9356.



9560.  (a) In order to enforce a claim against a payment bond, a
claimant shall give the preliminary notice provided in Chapter 3
(commencing with Section 9300).
   (b) If preliminary notice was not given as provided in Chapter 3
(commencing with Section 9300), a claimant may enforce a claim by
giving written notice to the surety and bond principal within 15 days
after recordation of a notice of completion. If no notice of
completion has been recorded, the time for giving written notice to
the surety and the bond principal is extended to 75 days after
completion of the work of improvement.



9562.  Notice to the principal and surety under Section 9560 shall
comply with the requirements of Chapter 2 (commencing with Section
8100) of Title 1.


9564.  (a) A claimant may maintain an action to enforce the
liability of a surety on a payment bond whether or not the claimant
has given the public entity a stop payment notice.
   (b) A claimant may maintain an action to enforce the liability on
the bond separately from and without commencement of an action
against the public entity by whom the contract was awarded or against
any officer of the public entity.
   (c) In an action to enforce the liability on the bond, the court
shall award the prevailing party a reasonable attorney's fee.



9566.  (a) A claimant does not have a right to recover on a payment
bond unless the claimant provided work to the direct contractor
either directly or through one or more subcontractors pursuant to a
public works contract.
   (b) Nothing in this section affects the stop payment notice rights
of, and relative priorities among, design professionals.