John A. Russell Corp. v. Fine Line Drywall, Inc. and Acstar Insurance Co.
2008 U.S. Dist. LEXIS 13098 (D. Vt., February 21, 2008)
The United States District Court for the District of Vermont held that only a material breach of contract constitutes a default triggering the year-long period provided by 8 V.S.A. § 3663 for commencing an action.
In John Russell Corp., Subcontractor began work on the metal framing and gypsum drywall systems of a project in November 2003 and ceased work on November 10, 2004. Prior to beginning work, Subcontractor secured a performance and payment bond (the “Bond”) with Contractor as obligee. During the Fall of 2004, Subcontractor’s presence at the job site was sporadic. Daily work logs indicated that Subcontractor was absent from the job site on six occasions during September and October 2004, the periods of absence ranging from one to five days. After November 10, 2004, Subcontractor never returned to the work site. Contractor made repeated attempts to contact Subcontractor to determine whether it planned to complete performance of its obligations under the Subcontract. Subcontractor did not respond to any of those attempts and had no further communication with Contractor. By early December 2004, Contractor “suspected [that Subcontractor had] abandoned the project.”