Unpublished Disposition, 924 F.2d 1063 (9th Cir. 1991)

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US Court of Appeals for the Ninth Circuit - 924 F.2d 1063 (9th Cir. 1991)

NVE CONSTRUCTORS, INC., Plaintiff,v.HARTFORD ACCIDENT & INDEMNITY COMPANY, Defendant/Third-PartyPlaintiff/Appellee,v.Ben E. VANDENBOSSCHE, aka Ben Vandenbossch, aka Benjamin E.Vandenbossch; Pamela Vandenbossche, aka PamelaVandenbossch, Third-party-Defendants/Appellants.

Nos. 88-15760, 89-16115.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 16, 1991.Decided Feb. 5, 1991.

Before CHOY, SCHROEDER and PREGERSON, Circuit Judges.


Pamela and Ben VandenBossche appeal from the district court's entry of summary judgment against them in favor of Hartford Accident and Indemnity Company. The VandenBossches owned a corporation, Double E Structures, Inc., which had subcontracted with NVE to perform certain construction work. Under that subcontract, NVE directed Double E to provide performance and payment bonds, and the VandenBossches had entered into an indemnity agreement with Hartford that they would indemnify Hartford for any payments that it made under the contemplated bonds.

Hartford issued bonds. Double E went bankrupt and was eventually terminated from the job, and Hartford has been found liable to NVE, the original plaintiffs in this action, on those bonds. The VandenBossches' appeal is from the district court's disposition of Hartford's third-party complaint against them on the indemnification agreement.

The VandenBossches' principal defense is that Hartford never issued any valid bonds because under the Indemnification Agreement issuance of the bonds had to be requested by someone Hartford believed to be an agent of Double E. The bonds were apparently issued on the basis of a copy of a letter from NVE to Double E, and it is not clear that that document came to Hartford's agent from Double E, as contemplated in the contract, or from NVE, the beneficiary. The VandenBossches contend that that issue is one of material fact that precludes disposition of the case on summary judgment.

Hartford correctly urges, however, that whether Double E or NVE requested the issuance of the bonds is immaterial because Double E subsequently ratified the request and issuance by Hartford. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (factual dispute precludes summary judgment only if it would affect the outcome of the case). It is not disputed that the VandenBossches and Double E knew the bonds had issued, for copies were sent to the Double E offices which the VandenBossches operated. It is also undisputed that neither Double E nor the VandenBossches ever questioned the validity of the issuance. There is also no question that Double E was required to provide such bonds as part of its subcontract obligations. Thus, even if an actual agent of Double E did not request issuance of the bonds, Double E as principal on those bonds clearly ratified the request because Double E proceeded to undertake its contract obligation without questioning the adequacy of the bonds issued. See Rakestraw v. Rodrigues, 8 Cal. 3d 67 (1972) (principal impliedly ratified the acts of purported agent by doing nothing to renounce them).

Nor is there any merit to the VandenBossches' suggestion that the district court lacked jurisdiction to consider the third-party complaint because Double E was an indispensable party. Double E was provided an opportunity to join in the litigation, but did not do so. Its absence created no prejudice for either Hartford or the VandenBossches who owned and operated Double E and had no adverse interests to it. The court also properly determined that Double E's interests were adequately represented by the VandenBossches. The district court did not err in determining under Rule 19(b) that the action should proceed among the parties before it. See Continental Insurance Co. of New York v. Cotten, 427 F.2d 48, 51 (9th Cir. 1970) (failure to join a party not fatal where it is "unlikely that ... absentee would be adversely affected in a practical sense").

There is also no merit to the VandenBossches' claim that the district court erred in holding them liable to Hartford for an amount in excess of the face value of the bonds. The indemnity agreement between the VandenBossches and Hartford expressly provides that the VandenBossches will indemnify Hartford "against any and all liability, losses and expenses of whatever kind or nature (including but not limited to interest, court costs and counsel fees)" that Hartford might incur as a result of issuing the bonds and settling any claims regarding the bonds. Hartford's claims against the VandenBossches thus included the amounts it paid to NVE to settle NVE's claim on the bonds and all of the costs it incurred in litigating and settling that claim. The district court properly determined that the VandenBossches were liable to Hartford for the entire amount it expended as a result of NVE's claims.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3