{"id":900893,"date":"2023-02-28T15:15:59","date_gmt":"2023-02-28T22:15:59","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900893"},"modified":"2023-02-28T15:16:02","modified_gmt":"2023-02-28T22:16:02","slug":"indemnity-agreement-none-of-your-business","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/indemnity-agreement-none-of-your-business\/","title":{"rendered":"Construction Litigation Roundup: \u201cIt\u2019s None of Your Business.\u201d"},"content":{"rendered":"\n

Daniel Lund III | Phelps Dunbar<\/a><\/p>\n\n\n\n

\u201cIt\u2019s none of your business.\u201d<\/p>\n\n\n\n

So said a construction surety resisting discovery of its underwriting file in the context of the surety\u2019s affirmative $2 million indemnity<\/a> claim (on a $25M bond), and a Missouri federal court agreed.\u00a0<\/p>\n\n\n\n

In response to the surety\u2019s indemnity suit, the defaulted principal contractor and additional corporate indemnitors offered up defenses of \u201clack of consideration and the doctrine of unclean hands, laches, waiver and\/or estoppel, among others.\u201d The indemnitors also issued written discovery to the surety seeking to obtain the surety\u2019s underwriting file \u2013 which would reveal the underpinnings of the surety\u2019s decision to issue the bond to the contractor \u2013 asserting \u201cthat the underwriting and due diligence documents are relevant to the[] lack of consideration defense. [Indemnitors] claim that \u2018[t]his defense is based on Defendants’ belief that Plaintiff did not conduct any reasonable inquiry into any Defendants’ ability to pay or financial resources and therefore Plaintiff did not rely on the financial condition of each Defendant in determining whether to issue the bonds.\u2019” <\/p>\n\n\n\n

The federal district court sided with the surety and denied the motion to compel:<\/p>\n\n\n\n

\u201cHere, the Indemnity Agreement states that the issuance of the bonds is the consideration for the Indemnity Agreement. Defendants have provided no basis for the Court to look outside this contract term to determine whether the Bonds do not constitute consideration. \u2026<\/p>\n\n\n\n

\u201cFurther, the Court holds that the requested discovery is not relevant to this litigation because the execution of the Bonds is sufficient consideration for the execution of the Indemnity Agreement under Missouri law. \u2026 The Indemnity Agreement specifically provides, \u2018the Indemnitors have a substantial, material and beneficial interest in the obtaining of the Bonds …\u2019 <\/p>\n\n\n\n

\u201cDefendants cite to only one case to support their claim that a lack of reliance on one of multiple indemnitors for a bond can be an effective defense to an action on an indemnity agreement. \u2026[T]hat case involved the liability of a wife indemnitor, who seemingly had no relationship to the transaction, [as compared to] this case which involves sophisticated business entities, who acknowledged the Bonds as consideration for the Indemnity Agreement. The Court holds that discovery related to the lack of consideration defense is not reasonably calculated to lead to admissible evidence.\u201d<\/p>\n\n\n\n

Fidelity & Deposit Co. v. Blanton, 2023 U.S. Dist. LEXIS 21210 (E.D. Mo. Feb. 8, 2023)<\/a><\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Daniel Lund III | Phelps Dunbar \u201cIt\u2019s none of your business.\u201d So said a construction surety resisting discovery of its underwriting file in the context of the surety\u2019s affirmative $2 million indemnity claim (on a $25M bond), and a Missouri federal court agreed.\u00a0 In response to the surety\u2019s indemnity suit, the defaulted principal contractor and… Continue reading Construction Litigation Roundup: \u201cIt\u2019s None of Your Business.\u201d<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10721],"tags":[9895,378],"class_list":["post-900893","post","type-post","status-publish","format-standard","hentry","category-insurance","tag-advise-consult","tag-indemnity-agreements","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nConstruction Litigation Roundup: \u201cIt\u2019s None of Your Business.\u201d - 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