Liberty Mutual Insurance Co. v. International Fidelity Insurance Co.
The Eighth Circuit affirmed the district court's judgment against a subcontractor's surety (Fidelity), and in favor of the general contractor's surety (Liberty) for the full amount of Fidelity's performance bond. The appeal stemmed from a dispute over costs that resulted from contractor defaults in completing a federal government construction project. The court held that when Fidelity issued a performance bond for a subcontractor on a federal project, and its principal defaulted, the word "successor" in the performance bond included as obligee a surety operating under the Takeover Agreement with the federal government. The court agreed with the district court that the many subcontract changes in the Ratification Agreement cited by Fidelity did not as a matter of law, singly or in combination, so materially alter Electric's obligations under the Subcontract that Fidelity's performance bond was discharged. Finally, the court rejected Fidelity's argument that Liberty failed to meet conditions precedent. View "Liberty Mutual Insurance Co. v. International Fidelity Insurance Co." on Justia Law