Hanover Ins. Co. v. Northern Building Co.

Federal 7th Circuit Court
Civil Court
Case Number: 
No. 13-2675
Decision Date: 
May 8, 2014
Federal District: 
N.D. Ill., E. Div.
Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action alleging that defendant breached indemnity agreement by failing to pay plaintiff for losses where: (1) plaintiff settled claims made by subcontractors against surety bonds that plaintiff had issued on behalf of defendant regarding defendant’s performance on construction project; and (2) plaintiff completed construction project after said project had been delayed due to plaintiff’s non-payment for work on project performed by subcontractors. Terms of indemnity agreement allowed plaintiff to make payments to subcontractors and to step into shoes of defendant to complete construction project and obtain remaining proceeds from third-party for plaintiff’s work on project, where project had been delayed by defendant. Ct. rejected defendant’s argument that plaintiff’s authority to settle subcontractors’ claims on surety bonds could not be triggered prior to any finding that defendant was actually liable for breach of instant surety bonds.