{"id":901459,"date":"2023-07-27T17:57:27","date_gmt":"2023-07-27T23:57:27","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901459"},"modified":"2023-07-27T17:57:32","modified_gmt":"2023-07-27T23:57:32","slug":"indemnity-surety-pursuing-recovery-who-needs-them","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/indemnity-surety-pursuing-recovery-who-needs-them\/","title":{"rendered":"Construction Litigation\u00a0Roundup: \u201cWho Needs Them\u201d"},"content":{"rendered":"\n

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

Who needs them? <\/p>\n\n\n\n

So argued a surety pursuing recovery under its general agreement of indemnity<\/a> when the indemnitors urged a Louisiana federal court to dismiss the surety\u2019s complaint for failure to join various allegedly required parties as defendants in the litigation.<\/p>\n\n\n\n

As part of its court action, the surety moved for preliminary injunction to enforce its collateral security rights. In response thereto, the indemnitors informed the court that if the injunction were to be granted, the indemnitors would \u201cbe forced to sell assets that are encumbered by security interests senior to those held by\u201d the surety. In connection therewith, the indemnitors demanded that the other creditors be joined in the action or the lawsuit dismissed. The indemnitors also urged that the public project owner be joined as a party because the surety was seeking proceeds from the project that were still in the possession of the project owner. <\/p>\n\n\n\n

Analyzing the indemnitors\u2019 arguments under various provisions of FRCP 19, the court ruled in favor of the plaintiff surety. The court found that the third parties were not \u201cnecessary\u201d parties under the Rule, as the court could \u201caccord complete relief among existing parties\u201d without joining the third parties. Noting that the indemnitors \u201cmisapprehended entirely the nature of commercial surety relationships,\u201d the court held that key to the court\u2019s refusal of the indemnitors\u2019 motion was that the \u201cability\u201d of the indemnitors to satisfy the judgment was of little concern to the court. Rather, the court was concerned principally with the establishing of the \u201cexistence and amount\u201d of the indemnitors\u2019 obligation to the surety<\/p>\n\n\n\n

The court also refused arguments by the indemnitors that absent joining the third parties in the surety\u2019s litigation, the indemnitors might be subjected to \u201cdouble or multiple liability\u201d based upon separate suits against the indemnitors. According to the court: only the true \u201cthreat of inconsistent obligations, not the possibility of multiple litigation\u201d determines whether a necessary party is missing from the federal court fray.<\/p>\n\n\n\n

Western Surety Co. v. Magee Excavation & Dev., LLC, 2023 U.S. Dist. LEXIS 98860 (E.D. La. June 7, 2023)<\/em><\/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 Who needs them?  So argued a surety pursuing recovery under its general agreement of indemnity when the indemnitors urged a Louisiana federal court to dismiss the surety\u2019s complaint for failure to join various allegedly required parties as defendants in the litigation. As part of its court action, the surety… Continue reading Construction Litigation\u00a0Roundup: \u201cWho Needs Them\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":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,172],"tags":[9895,224,8881,9892],"class_list":["post-901459","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-construction-law-2","tag-advise-consult","tag-construction-contract","tag-indemnity","tag-surety","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nConstruction Litigation\u00a0Roundup: \u201cWho Needs Them\u201d - 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