The Court of Claims has ruled that the State of Ohio “Article 8” dispute resolution process applies to the surety in a takeover situation following a contractor default (Berkley Insurance Company v. Kent State University, Case No. 2018-00579JD).

The trial court found that the surety had not timely initiated the “Article 8” claim process, and therefore was barred from challenging the State’s imposition of backcharges and withholding of the contract balance.

This case reinforces the risk that contractors and their sureties face if timely notice of claims or disputes is not provided to the State consistent with the parties’ Contract (or any waiver thereof).