614 Governmental Liability When Surety Becomes Insolvent

• Jurisdiction: Arizona

In Flori Corp. v. Yellow Rose Dev. & Constr., Inc., 184 Ariz. 540, 911 P.2d 546 (App. 1995), the court held that the government has no liability to parties who are unpaid because the surety becomes insolvent. The court determined that the requirement that a contractor shall furnish a payment bond imposes a duty on the contractor, not on the governmental body employing that contractor.

The court also found no liability for making payments to the general contractor even after the governmental body discovered...