Ernest Bock & Sons, Inc. v. City of Philadelphia

Surety - Performance Bonds - Defenses

Ernest Bock & Sons, Inc. v. City of Philadelphia, 2020 Pa. Commw. Unpub. Lexis 418 (Pa. Cmwlth. August 12, 2020) was primarily a dispute between the prime contractor and the City on a large project at the Philadelphia airport.  The parties filed post-trial motions and cross appeals of the trial court’s judgment.  The appellate decision primarily concerned the dispute between the contractor and the City, but it also addressed the sureties’ appeal of the judgment against them.  The court held that “Paragraph 3 of the Performance Bond clearly and unambiguously provides that the City was required to provide EBS [the contractor/bond principal] with written notice and an opportunity to cure its violation of the Contract before the City could call upon the Sureties to perform under the Performance Bond.” The court concluded that informal notices and warnings in progress meetings did not satisfy the written notice requirement of the Performance Bond and thus entitle the City to declare a Contractor Default under the Bond. The court reversed the trial court’s judgment against the sureties and concluded, “the Sureties were not obligated to perform under the Performance Bond and, therefore, cannot be held liable to the City for any damages thereunder, including attorney’s fees.”