Liberty Mutual faces a new federal lawsuit over an unpaid payment bond tied to a Detroit school demolition project.
In a filing dated April 23, 2026, Michigan contractor Dore & Associates, Inc. accuses Liberty Mutual Insurance Company of wrongfully refusing to pay on a surety payment bond issued for work at a Detroit Public Schools site. The case is now before the United States District Court for the Eastern District of Michigan.
According to the filing, Dore agreed on February 7, 2025 to perform demolition work for MIG/Rockford JV at a Detroit Public Schools project identified as DPSCD PRMX, 2585 Grove St., Detroit, MI 48221, Job #53001. The subcontract price was set at $582,300.00.
Dore says it mobilized in February 2025 and, by early June 2025, had completed "approximately 95% of the physical demolition," with the remaining work "primarily below grade." Despite that, MIG/Rockford allegedly terminated Dore's contract on June 6, 2025, citing nonperformance while, the filing claims, denying schedule relief for excusable delays and at the same time requiring acceleration of the work.
The company says it then submitted a pay application for $449,318.62 covering the work it had completed. The filing states that MIG/Rockford has paid Dore $0 on the project "despite repeated written demands."
Liberty Mutual is named in the lawsuit because it issued the payment bond for the project. Once MIG/Rockford allegedly failed to pay, Dore says it turned to the surety and "made a demand on Liberty Mutual to fulfill its obligations under the Payment Bond." The filing alleges that Liberty Mutual told Dore it would deny the claim and has "failed and refused to honor its obligations under the Payment Bond."
Dore claims it has "satisfied all of its obligations and conditions precedent under the Payment Bond," and says the action is timely under the bond and applicable law. The company is asking the court for a judgment against Liberty Mutual in an amount "exceeding $75,000," exclusive of interest, costs, and fees, along with pre- and post-judgment interest.
For insurers and claims professionals, the filing highlights a familiar pressure point in surety practice: what happens when a payment bond claim lands while the underlying contract dispute is still being fought somewhere else. Here, Dore says its dispute with MIG/Rockford over subcontract performance and amounts due is already in a pending arbitration under the construction contract, even as it pursues the surety in federal court.
The filing also points to Section 12 of the payment bond, which, according to Dore, requires that any lawsuit be brought in the state where the project is located. Dore cites that clause as support for bringing the case in the Eastern District of Michigan, where both its principal place of business and the Detroit project are located.
The lawsuit asserts a single count for breach of surety bond against Liberty Mutual. At the time of the filing, Liberty Mutual had not yet filed a response, and no court has ruled on the allegations. All of the claims described in the case remain unproven.
