In Attard Industries, Inc. v. United States Fire Insurance Co., 2010 WL 3069799 (E.D.Va. August 5, 2010) a sub-subcontractor sued the payment bond surety for the subcontractor. The sub-subcontract contained a waiver of any right to trial by jury of all disputes arising out of the sub-subcontract. There was no reference directly to any payment bond claim, and there was no jury trial waiver in the bond itself or in the subcontract that was incorporated into the bond. The surety moved to strike the claimant’s jury trial demand based on the waiver in the sub-subcontract. The court recognized a split of authorities from other jurisdictions and that the surety stood in the shoes of the principal to assert the principal’s defenses to the claim. The surety argued that sureties could enforce arbitration clauses in the claimant’s agreement with the principal, and that arbitration necessarily involved waiver of a right to a jury trial. The court reasoned that a major factor in the arbitration cases was the strong federal policy in favor of arbitration while here there was a strong federal policy requiring that any waiver of the Constitutional right to a jury trial be clear and explicit. The court thought that the waiver in the sub-subcontract, which did not refer to a surety bond and was not repeated in the bond itself, did not qualify under that test and held that the surety could not enforce the waiver. The court denied the surety’s motion to strike the claimants jury trial demand.
