A surety (Westport) brought an interpleader motion seeking a declaration of priority over funds awarded to a subcontractor (High Tech) in an ODACC adjudication, or alternatively, for the funds to be paid into court.
The funds were held in trust by the general contractor's (BDA) counsel due to competing claims.
The court found that Westport, as surety, had a valid security interest and trust claim over the funds based on the indemnity agreement with High Tech.
The court rejected High Tech's argument that the Construction Act's prompt payment provisions gave it priority.
However, the court also found that there were triable issues regarding Westport's good faith in processing claims and making advances, which precluded a final order for immediate payment to Westport.
Therefore, the court ordered the disputed funds to be paid into court pending the outcome of ongoing litigation between the parties.
