International Fidelity Insurance Company v. Western Virginia Water Authority, No. 7:2011cv00441 - Document 63 (W.D. Va. 2012)

Court Description: MEMORANDUM OPINION. Signed by District Judge Glen E. Conrad on 9/28/2012. (lab)
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I TH E UN I N TED STA TES D I STRI C OURT CT FOR THE W ESTEM DI STRI OF VI NI CT RGI A ROA N OK E D I I ON V SI CL BOFFI u. . ST COURT ERK' GE S D# . ATR- Oc , < FI LED sEP 2 3 2 1 02 J I . ULA D R 0 D CL K R@ I TERN A TI A L FI ELI I SU M N CE N ON D TY N C OM PAN Y , Pl ntf ai if Ci lAc i No.7: 1 c 00 vi ton 1 - v- 441 W ESTERN VI NI W ATER AUTHORI RGI A TY, De e n / r pa t Pl i if f nda tThid- ry antf M EM ORANDUM OPI ON NI V. FI RST STA TE BAN K a nd By: H on.Gl n E. lad e Corr Chi fUnie S a e DititJ e t d t t s src udge CA RN ELL CON STRU CTI CORPOM TI , ON ON Thid- ry D e e n s r pa t f nda t . Thi c s c n ensmulpl c nr c d s ue se n fo ac n tu to p o e ta t s ae o c r t e o ta t ip ts tmmig rm o sr cin rj c the i Falng Cr e Dn i Be or Cot y.Thi i t s co tmet c t shad r as t is li e k m n df d mt s s he e nd i he our ha e on o s ue adec son i t ca e. Thi opi onconc m st orgi lc ii n he s s ni e he i na ompl i fld by I e ai na ant ie ntm to l Fi lt I ur nceCompa agans W ese n Vigi aW a e Aut iy.Thepa te fld cr s de iy ns a ny i t tr r ni t r hort ri s ie os moin f rs mmayj dg n pls n t Fe ea Rueo Cii Pr e u e5 a dt ec u t to s o u r u me t t ua to d r l l f v l oc d r 6, n h o r r he r a gume on t m at r a r s e i t pa te 'bre s ad r nt he te s dd e s d n he ri s i f .Fort r a onst tf l t he e s ha olow,he c u t lg a ti p r a dd n i p r t epanifsmoi nfrs mmayj d me t a dg a t o r wil rn n a t n e y n a th litf to o u r u g n , n rn i par a de i patt dee ntsmotonf s n t nd ny n r he fnda ' i or ummayj r udgme . nt 1 . Fac uala Pr duralBac r t nd oce u ound OnS ptmb r1 , 01 ,n en to a Fiei I s rn eCo a y(t 1 ' tepanif e e e 4 2 1 Itr ai n l d lt n u a c mp n tF C',h litf y 1 ) i t sa ton,fl ac anta i tW esen Vigi aW ae Aut rt (t ho iy' t n hi ci ied ompli gans tr r ni tr ho iy tAut rt ), he def nda a t r pary pl ntf . The c pl nts e m one a y a de a a o y r i ,a e nt nd hi d- t ai i f om ai e ks t r nd cl r t r elef nd alg scamso b e c o c nr c, q ia l s b o ai n a du j s e rc me t ( c t . le e li f ra h f o ta te u tb e u r g to , n nu t n ih n . Do ke No 1a 1) t. Ac o dn t t ec mplitt eAu h rt e trdit ac nrc (ç n rc ' wih c r ig o h o an ,h t o i n ee n o o ta t s ta f) t y co CanelConsnztonCompa (< r e1')onM a 4,2009,frconsnzto a grdi wo k r l t ci ny $Ca n 1' y o t cin nd a ng r o teFal Cr e Da Re o ain($ oe t'.( za 2) Th ttl rc frCa l' wok n h li e k m n v to ç j c' J .t . e oa p ie o mels r ng Pr ) # o tep o e t s$18 7 1 30 , n t eCo ta tp o ie f rmo t yp y nst Ca n l i n h rj c wa ,2 ,2 .0 a d h nr c r vd d o nhl a me t o r eln at a a oun e i ni t fvepe c ntoft c ot l m t qualng ney-i re he onka tprc wih fveper e oft mont y c ie t i c nt he hl Pay e st ber t ne i a e c'w ac ount m nt o eai d n n s l o c .TheConta to i t d t Aut rt t pay r c blga e he ho iy o Can l a yrmanngc nrc b ln eu o c mplto o teP oe t Ap i 6 2 0 , F C, r el n e ii o ta t aa c p n o ein f h rj c.On rl , 0 9 I I a s rt ,su dalb ra dmaeil a me t o d($ n ' o b h l o Can l t stsy a y s u ey is e a o n tra p y n b n t d' n e af f r elo aif n Bo ) t ads b o ta tr wokigo t eP o e t Do k t 13) P irt is igt eBo d I C mp i u c nr co s r n n h rj c.( c e No. - . ro o s un h n , FI r q ie Canel oe e uea Ag e me t fl d mni (d d mni Age me f).( c e No. e urd r lt x c t n re n o n e t dn e t r e n Do k t y l y 1 4. Thel mniyAgre ntesa ihe t rg sofI C i t e ntI C wa f c t -) nde t e me tbls d he iht FI n he ve FI s ored o m a apa e t rt Bo Thel mniy Agr me as c a ne aclus as i ng ke ym nt mde he nd. nde t ee nt lo onti d a e sgni alofCa nelsrgh s i l nga u i c r tba a ea r t i geamot s t I C i l r l' i t , ncudi ny npad ontac l nc nd ea na mt, o FI n t e tI C i ureda l son t Bond. he ven FI nc r os he TheAut iy, nelandFis Stt Ba (d rtStt' as e ee i oa esr hort Car l, rt ae nk s s ae' lo ntrd nt n cow Fi ) ag e mentCt c o Agre nf' wihrs tt t Conrc.( ke No.4- , B. I C re Esr w e me ) t epec o he ta t Doc t 1 Ex. ) FI sgne t Es r Ag e me ass eyf Canel (d) TheEs r Agreme pr d t t i d he cow r e nt urt or r l. 1= cow e nt ovied ha t A ut r t w oul pa i o t e c o a ou t f vepe c ntr t na a t tFi s St t he ho iy d y nt he s r w cc nt he i r e e ai ge, nd ha r t a e, 2 a t es ow age , ul pa t t Aut rt orCn ela a s he cr nt wo d y o he ho iy rn l ny mount asi tuce by t s nsr td he Au h rt (d; c t . 1 Ex B. TheAu h rt alg sta ip i afvepec n t o i I .Do ke No 4- , . ) y. t o i le e h t t ad i re t y rti e a nage a o i t e c ow ac ot tea h tm e Ca ne ls it d a pa e r ues ,r s tng m unt n he s r c m c i r l ubm te ym nt eq t e uli i at albaanc i t es r w a o mtof$85,23. Ho ve , hec c Fis St t r eved n ot l e n he c o cc t 8 33. we r t he ks r t ae ec i di notce l i c t t y we ebei pad t Fis Stt a e c o age .Asar s t whe d lary ndia e he r ng i o r t a e s s r w nt e ul, n Fis Stt r c vedt s c ksfom t Aut rt Fis Sut de ie t m i ot s pa a e rt a e e ei he e hec r he ho iy, rt e post d he nt he e r t busnes s vi ac ountofCa l whih hadbe n al tmeba ng c t rofFis S a e i s a ngs c nwl, c e ong-i nki usome rt t t . ( k t 2 - a 3) Doc e No. 5 1 t . OnJ n 1 , 01 , r l c mpee t ePrjc.( c e No 1a 3. Ac o dngt t e u e 4 2 1 Canel o ltd h oe t Do k t . t ) c r i o h c ompli t l C- i isr easszey f Ca e l r c ve a pa d apa e tbond c am fom a n , F1 n t ol lr t or m l- e ei d nd i ym n li r o eo Cn l' s bc nr co s F r us nEnep ie (Teg s n',ntea u to n f mels u o ta t r, e g o tr rs s ç r u o ) i h mo n f $ 8 ,714 .(d) Bae o ti iv l ayasg me t I I a g e i isc mplit h tii 2 65 .4 l .. s d n h s n ot r sin n , F C r u s n t o an t a t s mt t pr rpat t r evet o sa ngbaanc of$85, 33unde t Contac.( ke he ope ry o ec i he uttndi l e 823. r he r t Doc t No 1) Ac o dn l, FI c n a tdt eAuh rt t rq e th tt yter mann c nr c . . c r igy I C o tce h to iy o e u s ta ipa h e i ig o ta t b ln ed eo t ePrj c dr cl t I C.( c t . a 4)I aJ ne1 , 1lte,h aa c u n h oe t ie ty o FI Do ke No 1 t . n u 4 201 etr te Aut rt a s d Ca ne lt t a ar s tofI C' s oga i c am ,i i e d t payt ho iy dvi e r l ha , s e ul FI S ubr ton l i t nt nde o he r mann c n rc b lnc t I C (n ldigt e$ 58 33 s p o e l b i hedi eco . e iig o ta t aa e o FI icu n h 8 ,2 .3 u p s dy eng l n sr w) (d) Cn n l idc td i a re n wi t i p o o a b sg iga drt r igt teAu h rt I . r el n iae t g e me t t hs r p s l y inn n eu nn o h t oiy s h ac oft J 1 lte .(d. opy he une 4 etr I ) TheAut iy t n die d Fis St t t r l s t I C t f hort he r de rt ae o eea e o FI he undsi be ivedwe ebeng t le r i hel i t e cow a coun.( ke No. a 4;Do tNo. 1, C. Howe r Fis Stt d n he s r c t Doc t 21 t cke 4- Ex. ) ve , rt ae c ul notco pl w ih t sdie ton,ha ng de ie a 1o t c ksdie ty i o Car l' o d m y t hi r c i vi post d 1 f he hec r c l nt ne l s spaaea co .( ke No.21a 4. TheAut iyis dac kt I C i t n e rt c unt Doc t t ) hort sue hec o FI n he mountof $ 38 59 ,e vn t rmanngb ln ed eo t eP o e t t 8 ,2 .3 tea u th ti 3 ,6 .8 la ig he e ii aa c u n h rj c a $ 58 33 ,h mo n ta t ha atmptdt payi ot esr ac ot .( . d te e o nt he cow c mt J ) #= I C fld isco pl nton Se e be l 2 1 s e ngt r ove fom t Aut iy FI ie t m ai ptm r 4, 01 , e ki o ec r r he hort te$ 58 33 baa c o tePrj c.( c t .1) OnOco e 2 , 01 ,h Auhoiyfld h 8 ,2 .3 ln e n h oe t Do ke No . t b r 6 2 1 te t rt ie at r pa t c hid- ry ompli a tmptng t hol bot Fis Stt a Ca ne lla east r pa t ant te i o d h r t a e nd r l i bl hid- ry d fn a t frt eu p i baa c o t ePrjc.( c e Nos 6a d21) Th c u t e r ee d n s o h n ad ln e n h oe t Do k t . n . e o r h a d a pl nton t Aut iy' t r pa t co pli a is d a o ni de ng i pa t r me he hort s hid- ry m ant nd s ue n pi on nyi n r and g a tn i pa t rtSaesmoi nt ds s a dmoinf rs mmayj d me t a d r ni g n r Fis tt ' to o imis n to o u r u g n, n uli t l g a i a to ldic r i ot is ofwheherFis Stt ha a t tma ey r ntng ddii na s ove y nt he sue t r t a e d cual knowl dget t c c i r c ve fom t Aut iys d ha be n pl c d i t es r e hat he he ks t e ei d r he hort houl ve e a e n he c ow a co . See l ' Fi l . v. . igi a W a e A u h.N o.7: 1 c 00441 201 W L c unt ntl d. ns Co. W V r ni tr t , 1 - v, 2 23 7 6 , t* ( . Va J ne2 , 01 ) 5 3 8 a 8 W D. . u 0 2 2 . I C a dt Au h rt t nfldc o smoin frsz r j d me t a dt c u t FI n he t o i he ie r s to s o l y mmay u g n , n he o r h ado a ag me to Se tmbe 2 , 1 I ismoinf rsl r u g n, FI s e s e r rl r u n n pe r 0 20 2. n t to o l mmayj d me tI C e k t a dsofm onea y r lef fr t i cli da gesi t a wo war tr ei : is, t a ms ma n he mountof$85,23. t ts ul 8 33 ha ho d havebe rti dt rt Esr Agre nt(s rc Reanage); s c i seks en eane mde he cow e me sconta t ti ' and e ond,t e r i s m e oft $286, . i pa dt Fe g on o behafoft BondAgr e e embm e nt he 57144 t i o r us n l he e m nt (pa me tBo Cli '. E y n nd am' t ) I . D i c s on I s us i A. LegalSt andard l c i rngamoto frs n onsdei in o ummayj me unde Fe r Rul ofCi lPr e e5 r udg nt r deal e vi oc dur 6, Chec ti r r d t viw t f t a d a r a o ei e e esi a lghtm os f vor bl i our s equie o e he acs nd r w e s nabl nf r nc n i t ta a e t t non ngpa t ' Sha v.Stoud,1 F.d791, (t Ci.1 .Viwi t fds o he movi ry. w ' r 3 3 798 4h r 994) e ng he a 4 i t i lg t s mmayj g n i p o e o l i t r i nog n n is eo maeil a ta d n hs ih , u r ud me t s r p r ny f hee s e uie su f tra fc n j g n i a p o raea amatro lw.Ceoe Co . Cart, 7 U. 31 3 2 4 ud me t s p r p it s te f a ltx p v. tet 4 7 S. 7, 2 -2 ( 9 6 ; v ev F ec tie, 1 8 ) Ho l . r ihln r LLC, 0F.d 3 , 31( t Ci. 01 ) A g n ieis eo 65 3 21 3 4h r 2 1 . e un su f mae il a t xsswh nt ee ie ei S u hta ara o a l u yc udr tr av r it o tra f c e it e h v d nc s ç c h t e s n bej r o l eu n ed c f r s t en n vngp ry. An es nv. b ry Lo b l c, 7 U. 2 2 2 8( 9 6 . h o mo i a t ' d ro Lie t b yen .4 7 S. 4 , 4 1 8 ) ' B. A nal s ysi i . C ontractR et nage ai Ta ngt Co r c Re ana cli frt I C a gu t tbe a e i i undiput t t ki he nta t t i ge am is, FI r es ha c us t s s ed ha I C wa entte t t t d baa eoft co r c i t e ntofade aul by Ca nel,i FI s ild o he mpai lnc he nta t n he ve f t r lt s d r e vet por i oft co r c t tw a t be r t i d unde t Es r A g e e . houl ec i he ton he nt a t ha s o e a ne r he c ow r em nt I C p it o t h t h Auh rt iiil a r e t p yI I teCo ta tRean g .( c e FI on s u t a t e t o i ntal g e d o a F C h nrc tia e Do k t y y 4 1 Ex. (ç ten u t e i igt b p i u d rt eCo ta t $ 58 33 i b igh l - , A) t h mo n r mann o e ad n e h nrc, 8 ,2 .3 s en ed Of unde a Es r A g ee e ... m d rw hi h t W a e Aut rt ha t pow e t die tt r n c ow r m nt t e c he t r ho iy s he r o r c he f .TheW aerAut iypr est payt sn mtt yourbondi c unds t hort opos o hi mot o ng ompa ' Onl ny. ). y a t rt Aut r t w a m ade a a e t tt f f e he ho iy s w r ha he unds ha ne rbe n pl c d i a es r a o d ve e a e n n c ow cc unt di i diput isoblgai n t pa I C t t t lr mai ngbaa ont Conta t I C a gues d t s e t i to o y FI he o a e ni lnce he r c . FI r t tt lnguageoft I ha he a he ndemniy Agr e e te il i t af l a sg e ofCa nel' rght t e m n nttes t o u l s i nm nt r ls i s t t Conta tRe ana asamaterofl w, by vit oft docrneofe t bl o he r c t i ge t a or rue he ti quia e s oga i n. ubr to Unde Vigi alw,Sg he aprncpa dea t o ac r tguaa e bya r r ni a éwj n i i l fuls n ontac rnted pe f m a e orpa e bo a t s e y pe f m s on t bond, i i e ofs e y 1 w a r or nc ym nt nd nd he ur t r or he pr nc pl s ur t a nd t docti o e t bl s oga i i pos c r a n rght a dute r l i be w e n t he rne f quia e ubr ton m e e t i i s nd i s u m ng t e he sze y,prnci l and o i or a a l t s le y t e or s h r gh s a dute . XL lr t i pa , blg , nd low he t t o nf ce uc i t nd i s ' r ' S e ilyl s Co. Co n at 26 Va 3 2 3 9(00 )(iigDik ns nv. als 1 3 p cat n . v. mmo we 1 9 . 6 , 6 2 5 ctn c e o Ch re , 7 h, Va 3 3, 0 ( 9 9 ) l oh rwo d ,h d crneo e utb es b o ainalwsf ras rt t . 9 4 0 1 3 ). n te r s t e o ti f q i l u r g to l a o o u ey o es e i l G tp i o t s s ntaly ç e nt he hoesof' prncpa a e or eisrg s I Howe r a s e y d s a i i l nd nf c t iht . d. ve , ur t oes m or t n m e e y ise i o t s e ha r l tt p nt he hoesof' he pr nc pa ,a $ pe f ng sze y m a r cove 't i i l s ç r onni lr t a y e r r ana hel byt owne e nt ht c r t c dnotr ove s hrti .'J eti ge d he r ve houg he ontacor oul ec r uc eanage' ;s ( iigItmain l d l yl s Co. As ln Ll e Co 2 0Va 5 7 51 (9 5 ) W he a ctn n e to a Fiei n . v. h a d l r . 5 . 0 , 1 1 9 ). n t mb s ey pe f mson apa e bond,t s ey hasta equia erght't i m nii ai n o of ur t ror ym nt he ur t tn t bl i ' o nde fc to ut ar t i d f t tt con r c o nol nge pos e s . Se Pe rm a v.Re inc I tr nceCo. e ane und ha he ta t r o r s s es e a l n la e nsta , 3 U. 1 2 1 7( 9 2 .Thi i b c u es c fnd aeo tnetb ih da mu hf rte 71 S. 3 , 3 1 6 ) s s e a s u h u s r fe sa ls e s c o h be t oft s ey a t toft o r a s r easc lt r lt ti e i z t c r t nek he ur t s ha he wne , nd e v ola e a ha nc ntvies he ontacor t fnih iswor ontm ea f lilisoblgai t s on r c or .l- I Ame i a Sl ev ois t k i nd ufl t i tons o ubc ta t s d. n z rc n z t r Co. Plnk & W his t t Supr m eCou tofVig ni madet sc e r v. a tet he e r ri a hi l a : The f nd c ea ed by t sr t i d per e a w a r quie notonl asa pr e ton u r t hi e a ne c nt ge s e r d y ot c i t t ow ne s t be us i t e nt t tt c r c or def uled i a of hi o he r, o ed n he ve ha he ont a t a t n ny s oblga i ,buta a f o of whi h t s e y m i htbe pa d,i t e n t t i tons s und ut c he ur t g i n he ve t ha i elc e t c t e t d o ompl t t buidi a t t de aul oft c r cor a outof ee he l ng fer he f t he onta t , nd w hi h t y ha a rght t be r m bur e f r t pa en s t y m i t be c he d i o ei s d o he ym t he gh co pe ld t m a l bo e sa m aeram e m le o ke a r r nd t il n. 1 9Va 1 1 ( 9 2 . 5 ., 3 13 ) I mpora l t s ey' rghtt t t i c r tba a er a e ba k t t daet tnty, he ur t s i o he mpad ontac l nc elt s c o he t he s e y i s d t bonds o t unde l ng con r c . Se l r J ur t s ue he n he ryi t a t e n e onesCons r to & Re t uc i n nova i ton. I c 3 7B. 5 9 5 3( n r E. Va 2 0 )(g j i rg t(ortie f n )rlt sb c t n . 3 R. 7 , 8 Bn k . D. . 0 6 ç- hs ih t ean d u ds eae a k o tf ted t o t es rt sis a c o b n sfrt ec nrc.)( u tn Pe rma , 71U. a 1 7 h ae f h u ey' s u n e f o d o h o ta t' q oi g a l n 3 ' S. t 3 ) (iai o te .I J ne ,heba krptyco thedt tt sleyhads rorrght ove cttons mitd) n o s t n u c ur l ha he trt upei i s r t ba pty esaet r t i d f ndsbe a et s e y' i e e t r lt d bac t t d ei he nknz c t t o e ane u c us he ur t s nt r ss ea e k o he at t is d t bond.J=;s a s W eser Cas t a Surt Co. Br , 2 F. 486, s ue he # . çe lo t n ualy nd ey v. ooks 36 2d 489 90 ( t Ci.1 6 )(g lnc ti iq ia l rg ' ftes rt t t f n rltsb c t ted t o 4h r 9 6 i s i e h s e u tb e iht o h u ey o he u d eae a k o h ae f l t s e y bond,i e ilst s ey t prort i pa e tove a 1s e n le de sa he ur t t ntte he ur t o i iy n ym n r l ubs que t inhol r nd g n r l rdtr . e e a c e io s' ). The Aut rt doe notdiput t tI C wa e ild t t $33, 98 r mai ng on t ho iy s s e ha FI s ntte o he 865. e ni he Co ta t ttet o tePrj c' c mpein I fc,h Auhoiyddno e e o ii al nr c a h i f h oe ts o lto . n a tte t rt i t v n rgn ly me diput I C' rg t t $85,23. pr vi d i ha be n pr ry r t i d i a es r s e FI S i ht o he 8 33, o de t d e ope l e a ne n n c ow a c t .( c e No 4- , . ) Th Auh rt ag e , o v r t t e a s Can li n c omt Do k t . 1 Ex A. e to iy ru s h we e ,ha b c u e r el s o l rl aly en ild t a y oft r t i d f nds I C c l m a acli f t mone onge eg l tte o n he e ane u , FI amot ke a m or he y et r TheAut iywrtsi isbreft tûatt tmeI C padFe gu on' cli Canel ihe . hort ie n t i ha ' l he i FI i r s s am, r l g onl had arg t t $35, 98t i ba a eon t c r c .TheAut iy pr de t s y i ht o he 865. mpad l nc he onta t hort ovi d hi t adb lnc t I C o Aug s 4, 01 . ( c e No 5 a 8) Th s t eAuh rt a es i mp i aa e o FI n u t 2 1' Do k t . 3 t . u ,h t o i v r,t ' y f fle isoblgai t Ca ne l a I C,i Ca nel' se d,c nnotma acai t tCa nel ulil d t i ton o r l, nd FI n r ls t a a ke l m ha r l c dno .Ho ver t sa s ri ove l oul t we , hi s e ton rookst sa e ntbyt Su e Cour ofVigni i he tt me he pr me t ri a n XL Spec at t ta sley doe m o et n m e ey se i ot s soft prncpa .XL i ly ha tr t s r ha r l tp nt he hoe he i i l Sp cat 2 9Va a 3 9(t j ac nr co d f ut o ab n e c n tu to c nr c, e il 6 . t 6 tlf o ta tr ea l n o d d o sr cin o ta t a y, l s pe f m i ste y ma r ove r t i ror ng tr t y ec r e anagehel by t o re n t ug t c r c o c ul not d he wne ve ho h he onta t r o d rcove s hrti . A s eyhasrg st t rti df ndst ta editnc fom, nd e r uc eanage' ). urt iht o he eane u ha r si t r a gr t rt n,t e oft c r c or I ;s e a s Fi lt & Cas Co.v.Cone ve Cont a tnc ea e ha hos he onta t . d. e l o de iv . nha r r ci Co.1 9Va 1 6 1 9 4 ( 9 2 (( h szeyi e t ldt b s b o ae t t rg t whc , 5 . 2 , 3 - 0 1 3 ) t T) e l t s n ie o e u r g td o he ih s ih ( r t t o i ha t orco d a s ta i t s h f he blgee d o, ul s er ga ns, uc undsupon t prncpa c r t ' de a tt he i i l ontacor s f ul o t e e ne sayt r i reis ff t outa ma t c eet c r t' . he xtnt ce sr o embu s tel or he ly de o omplt he ontac.) ' M or ove ,l C' r g st t e ie ba a e oft co r c w e e e t bls d on t da e e r Fl s i ht o he ntr l nc he nt a t r s a ihe he t i i s t bond. Se W es e n Ca ua t & Sur t 36 F. a 489- The f tt tCa nel t s ued he e t r s lv e v, 2 2d t 90. ac ha r l 7 i o ry r ceve t Contac Re ana a mpr pe l e i d he r t t i ge mounta trt Bond wasi s d snotdi nih fe he s ued oe mi s I C' pr e si rg st t s f . FI S e- xitng iht o ho e unds Suc ar ul i s h es t s uppore b t polc r a o unde l i t prncpl ofe t e td y he i y e s ns ry ng he i i e quiabl s ogai a wel. Sur te ,lkebond oblg s r quiepori nsofc r t lpa ubr ton s l e is i i ee , e r to ontac ua yment t be so rti e i o d rt ic n iieac nrco t fns wo ko ap oe t Hee I C wa a ean d n r e o n e tv z o ta tr o i ih r n rj c. r ,FI s sgna or t t Es r Agr e e r ii t tfvepe c ntoft co r c prc ber t ne i i t y o he c ow e m nt equ rng ha i re he nta t ie eai d n aspaaea c t u tl fe tePrj c ' c mpein Th I d mni Ag e me t p cfc ly e rt c omt n ia tr h oe ts o lto . e n e t r e n s e iial y m e i ne t tI C woul ha rgh st t r ui d f nto d ha FI d ve i t o he e ne undsi e hangef isa ee ntt n xc or t gr me o bond Car l. Sur te lke I C r l on t c l tr lt obt i fom e c ow a e nt i nel e is i FI e y he olae a hey an r s r gr eme s n dec d ng whe he t bond con r c o s a t y ar e il t t r t i d f ii t ro t a t r , nd he e ntted o he e a ne undsi t prnci l f he i pa def uls a t. The Aut iy ar ue t tI C ha no cl i t t Cont a tRe a na unl si c n s hort g s ha FI s a m o he r c t i ge es t a how t tt Aut iy ç t ral at r 'I C' c r c wih Cn ne lt s h a e e t tI C ha he hort i e i ly le ed' FI S onta t t r l o uc n xt nt ha FI ma wa dic r d fo isoblgai unde t Bo s s ha ge r m t i tons r he nd.I C de e t scai by a g ngt tt FI f nds hi l m r ui ha he A ut iy' f iur t es a i h t es r a co n ount d t a m a e i a t r ton oft hort s a l e o t bls he c ow c unt m e o t ral le a i he co r c . ' H ow ever,t si s m or pr ry bel nt a t hi s ue e ope l ongsi t a l i ofI C' dem a f t n he na ys s FI S nd or he 'l s n uppor oft sa gumentI C p rplae teRettmett id o St tsi a dGu rn vj 7 t hi r , FI aa l ss h r sae n Thrl f tevhp n aa t 3 : r ( )I teo l e (ee WVW A)at t ice s tesc nd r o lg rs(ee I C)rs o ls 1 f h bi e h r , g cs o n rae h e o ay bio' h r, FI ik f os b ...d cesn i p tnila ii t c u etepicp lo l o (ee Can l t b a te y e raig t oe ta bly o a s h rn ia bi r h r, rel o e r h s t g j c sso p roma c ,h sc n m' o l o (FQ i dsh re .. a dtesc n ay o io ot f efr n e te e o d y bi r II s ic ag d . n h e o d r bl r g g (FI h sacam a an th o lg e( VWA). . I C) a li g is te bie W . ( )l teo ie ( 4 f h bl e WVW A)i iste sc n ayo lg rs(Fl s s rt sau (n ti c s g mpar h eo d r bio ' I C') uey tts i hs ae tru h p e tr p y n o tertia et tdsiae I C' c laeaj...b)beoete ho g rmaue a me t f h ean g ha isp td FI S oltrl ( fr h s c n m' o l o (FI p ro ms a p ri n o t e s c nd r o l to E t i c s p y n e o d y b i r I C! e f r g o t f h e o ay b i in i h s a e a me t o ga n t F r u o ,fh s c n ayo l o (FQ te p roms . . o eg sn)ite e o d r bi r I I h n efr : . g (i frtebe ei o a itn e b n fcay (ee F r uo )wh c n e fre tesc n ay i o h n ft f n ne d d e eiir h r , eg sn o a n oc h e o d r ) o iainnowi sa dn sc i ar n : . tesc ndr o l o (FI h sacam a ant bl to t t tn ig u h mp ime t . .h e o ay bi r I C) a li g is g h g te o ie ( h bl e WVWA)wih rs c t s c p roma c t te e tn t ts c i ar n g t epet o u h efr n e o h xe t ha u h mp ime t wo dh v dsh r e tesc n ayo io (FI wi rs e tota pef r n e ul a e ic ag d h e o d r bl r I C) t ep c t h t roma c . g h ( c e No 5la 1 ) Do k t . t 2. $28 5 44 unde t Pa ntBo Cl i ,Dee mi ng whe he t Aut iy m ae i ly 6,71. r he yme nd am tr ni t r he hort t ral c s r n t i hi Fl s i s n he nt a t t na a t r d t co r c 2i unne es a y i esabls ng l C ' rght i t Co r c Re ai ge, w hi h le e he nt a t s c a e s part fom isc r c rght a whih ve td t dae i is d t Bo t Ca ne l r e ae r t onta mal i s nd c se he t t s ue he nd o r l. SeeXL Specaly, Va. t369(t t l Subog i i s r tont aiesbyopeai i t 269 a d abe r aton s ubogai hat rs Equi rton oflw .l i notba ed o c r c orprviy ofpa tes b i pu ey e t bl i naur , a ts s n onta t it ri , ut s r l quia e n t e d p n e to tefcsa dcrl tn e o e c p riua c s .)( u tto mak a d e e d n n h a t n icl a c s f a h a t lr a e' q oain r s n ms c ' ctto so te ) seas Me hs& L. R. Do 1 U. 28 3 - 2( 8 7 (ç erg t iain mi d ; e lo mp i t R. v. w, 20 S. 7, 010 1 8 ) s ih Th ofs oga i i notf mdedon c r c . I i a c e t e ofe t i e or e s e y f t ubr ton s ot onta t t s r aur quiy; s nf c d oll or he pupo eo a c mpls igtee d o s b tnilusie a i i d pe d n o a yc nr cu l r s f c o ihn h n s f u sa ta j tc ; nd s n e n e t f n o ta ta r ltonsbewee t pa tes' Thec ur c l est tI C wase ildt t $85, 33 eai t n he ri . l. o t oncud ha FI ntte o he 823. Con r c Re nag a s asCn n l de a t d,a t wilgr ntI C' moto f s ta t ui e s oon r e l f ule nd hus l a FI S in or umm a y r j d me to ta cam. u g n n h t li l. l Paym entBond C l m ai Tt i now t t i s ofm a e i la t r to I C a s s e r i b s m e f t l ng m o he s ue t ra le a i n, FI l o e ks e m ur e nt or he $286, .4 pa nti m a t Fe gus n, g ngt tt Aut rt sf iu et pr ry r t i 5714 yme t de o r o ar ui ha he ho iy' al r o ope l e a n c r tpa e sdic r ed I C' o i tonsasa sle y.I C a s t t ti i e ild t ontac ym nt s ha g FI S blga i tr t FI s ers ha t s ntte o r i btr e e bec us ,ha i known t tt co r c r t i ge w a no be ng w ihhel by t e m z s m nt a e d t ha he nt a t e a na s t i t d he A ut iy,I C w oul have r f e t pa Fe gus sbo cl m . hort FI d e us d o y r on' nd ai The e i pr e ntunde Vigi al w and es whe ef t pr ii t ta oblgee' r s ec de r r ni a le r or he oposton ha n i s a tonsi vi ai n ofa c r c bewe n a owne a aco r c o wil i c rai c i n olto onta t t e n r nd nta t r l,n e t n crumsnnc , s r aszeyfom iso i tonst pa t c r corsde .çgl t ic f es dichage trt r t blgai o y he onta t ' bt çlf he ow nerand cont act engage i pr i t cons iut a m at i change i t cons ructon r or n actces hat tt e er al n he t i cont actpr sons and t contac ors r ovi i , he r t ubsequenty def t on t cont act,t s et i l auls he r he ur y s 2Thi is i dic s d i s s ue s s us e nga a I.B.i t l i. e il t adic r ofisoblgai t payt c r c orsdeb . XL Spe i lv,269Va. t ntted o s ha ge t i tons o he onta t ' t' ' c at a 3 0(iigSo t wo dBui e s l c v. e re sI s Co.2 5Va 1 4, 6871( 98 )) e as 7 ctn uh o l r ,n . P els n . , 3 . 6 1 - 1 8 ) s e lo d Lu eme sM uu lCa u lyCo v. S.6 4F. d 1 5 1 4( e . r 2 1 (g e mb r n ta s at . U. , 5 3 30 , 31 F d Ci. 01 ) çon ) ç g o n f rd sh r e. .sta t eo lg eh sprj dc dtes rt b i o ryma ige ry r u d o ic a g . i h t h bie a eu ie h uey y mprpel kn a l c r c pa e s o ov pa e st t prnc paloblg i a m n ri ons s e wih ont a t ym nt r er ym nt o he i i i or n nne nc it nt t s e ii p y n she ue , o dto s o rtia ep o so i t eb n e c nr c. p cfc a me t c d ls c n iin , r ean g r viins n h o d d o ta t). ' W hehe t oblge sa tonsc tt eama e i ale a i i ba e a l a ti pa ton t g t r he i e' c i onsiut t ral t r ton s s d t e s n r he ood f i o tep ry.S eP a k& W htet I c, 5 Va a 1 (d qe tesley i r q rdt at f h at e ln h ist n .1 9 . t 7 EW h n h t t s e uie o l r m a r i bur e nt f a l soc sone by t de a toft prncpa ,i hasarg t ke em s me s or os ca i d he f ul he i i l t iht o r quiet owne st s how a i wha m n rt ha pe f me t i pa toft e r he r o how nd n t nne hey ve ror d her r he c r c .... oblge i t bond i no onl r quiedt e r ie go f ih wiht sley onta t The i e n he s t y e r o xe c s od at t he tr t a t tmet oblgai nsa ea s e butt sgood f ih m us beke i olt i a l t he i he i to r s um d, hi at t pt nvi a e n 1 s e ntta a tonsa f c i t i rg sa oblgai nsc eae by t c r ta t ubs que r ns c i fe tng her i ht nd i to r t d he ontac nd he bond.) ' ' Ca e i whc as rt ' o iai n h v be nds h r e g n r lyiv leaprj c ss n ih u ey s bl to s a e e ic ag d e e al n ov o e t g owne pr payi orove pa ng o a c ta tt s h a e e t ti m ae ily at r d t r e ng r yi n on r c o uc n xtnt ha t tra l le e he szey' rg t a de p cai n b rd cn t ec nr co ' ic n iet c mpeeisp o e ti a l t s ih s n x e tto s y e u ig h o ta trs n e tv o o lt t rj c n r tm ey a s tsacor m n r Se Contnen a I Co. Ciy ofVa.Be c 908F.Supp. i l nd ai f t y nne . e i t l ns. v. t a h, 341 ( D. . 9 5 (id n t a p e y n o o e hafteo ii l o ta ta t c n tttda E. Va 1 9 ) fn i g h t rpa me t f v r l h rgna c nr c momt o si e u C t ilvarai ' t c r c t dic r edt s eyfo isoblgains;Sout ç era iton'of he onta that sha g he urt rm t i to ) ma hwood Buides 235Va.a 1 71(i ngt to pa l r, t 70- fndi ha ve ymen of$31, 0ona o i na conrc of t 00 n rgi l ta t $79, mno e t amaei atrto t tdic r edt s ey' o i tons.Subsani 500 untd o tral leain ha sha g he ur t s blgai ) t tal pr pa e di i s a ke pi ce oft c l t a a s e y co i er w he i de i st e e e ym nt m nihes y e he ola er l ur t ns d s n t c de o nt r 10 i t abond ag ee ntwih aco r cor M a pa ntbo ,i udi t o a is i t s no r me t nta t . ny yme nds ncl ng he ne t s ue n hi ca e i or r t t unde l ng c t c i co r c i t t bond a ee e ,t r by of e i s , nc po a e he ryi ons nz ton nt a t n o he gr m nt he e f rng s c t t t s r t t tt c r c orwilnotdeful on isoblgai t s onta t s. e miy o he u ey ha he onta t l a t t i tons o ubc r cor ( c e No. - a 1) Do k t 1 3 t . I t sca e t m a e i la t r ton a l ed i t t e ym e ' oft pori oft n hi s , he t r a le a i leg s he d pa nt' he ton he pr c r c t ts dhavebe r t i d i es r On at t lco r c prc ofo r$1. m ilon, onta t ha houl en ea ne n c ow. o a nta t ie ve 8 li $85, 23. - r h1 fvepe c nt wa pr ma ur l dibt s t Ca n l. Thecour fndst s 8 33 0ug y i r e - s e t ey s l ed o r e l r t i hi s a lrs i s t nta l dipr tonaet t muc l r rn o si vol d i t e c s s m le um s ubsa ily s opori t o he h a ge m unt n ve n hos a e i whih t s ey' oblg i wer de m e t ha bee dic r d.I bot Sout n c he ur t s i atons e e d o ve n s ha ge n h hwood a nd Contne a ,t c r notd t sg fca sz o t pa m e si r ai t t o i na i ntl he ou t e he inii nt ie f he y nt n elton o he rgi l c r c i deenui ngt tt c r csha be n m ae i ly atr bypr pa e .The onta t n t ni ha he onta t d e t ral le ed e ym nt r ltve i i fc nc oft $85823, i c ea i nsgnii a e he , 33 n ompa ion t t t a c r c prc i t sc e rs o he ot l onta t ie n hi as m iia esag ns fndi a m a e i la t r ton. lt t ai t i ng t ra le a i Addii nal t r i no s to ly, he e s howi ofba f ih onbe l oft Aut rt i f ii t ng d at haf he ho iy n alng o r t i t s s TheSupr meCour ofVigi aha i i d t tba f ih die t d a t s ey e an he um . e t r ni s mple ha d at r c e t he ur t i no ne s a y t a s w i ofm a e i la t r ton. Se Sou hwood Buide s 235 Va. t 1 s t ce s r o ho ng t r a le a i e t l r, a 70 (A spaaes o ngo p eu iet t es rt i ume e s r b c u eamaeil e ito i ç e rt h wi f rj dc o h u ey s r c say e a s t tra d v ain,n isl, sa ls ss fiin p eu ie' .Ho v r i e au tn maeil leaincams i i tef e tb ihe u fce t rj dc .) we e ,n v laig tra atrto li ,t s ' c ea t ts m e c t ha c i r d w he he t oblge a t ly t ok i o ac ountwha ef e t l r ha o our s ve ons de e t r he i e c ua l o nt c t fc pr pa ntwo d ha ont rght oft s ey.l Con i nt l t Cour not d t tt e yme ul ve he i s he ur t n tne a ,he t e ha he oblge wasunc i e once ne a tpa ng t co r c orea l orf de ec i w or be us d he r d bou yi he nt a t ry or f tve k ca e k t s t wo l awa sb a alb et c mpeet ej ba do p yf rt rp is' 9 8F. p . t mey ud l y e v ia l o o lt h o n /r a o he e ar. 0 Su p a ' 348. The Cour f t ound t oblge sc pl e l c ofc e n f w he herpr pa e t t he i e' om et a k onc r or t e ym nt o he c nr co wo l d so r g i fo c mpeigtej b as t b ssf rds h r i gt esley' o ta tr ud ic u a e t r m o ltn h o omd a i o ic ag n h t t s r oblgai .l ;seas Plnk& W his t,15 Va a 1 (e rngoblgee t e r s I i tons d. e lo n tet 9 . t 7 rquii i s o xecie t good fih'wihr pec t t szey' rght t at ' t es t o he lrt s i s koughou t pe i c rdbyt bo . t he rod ovee he nd) I C m a no a lga i he e, doe i a FI kes le ton r nor s t ppea fo t f cst ti c ul t tt r r m he a t ha t o d, ha he Aut rt aced i ba f ih i f ii t e lr t tt e c ow a oun ha be n esa ihe ho iy t n d a t n alng o nsze ha he s r cc t d e tbls d. W hi hpa t i uli e yt bl f t tm itkei t is oft t r pary c c ry s tmatl o ame or ha sa s he s ue he hid- t ompl i ,bu i ant t t a ar t tunde no cic s a esw a t Aut rt a hi m o e t n ne i e i is ppe s ha r r um t nc s he ho iy nyt ng r ha glg nt n t a tonsc e ni t es r w a ot . Thus t que ton oft Aut rt sg f t i ci onc r ng he c o cc mt , he si he ho iy' ood aih n ha i t unde l ng c r c alowe g a i tfndi ama e i lat r ton. ndlng he ryi onta t s i hs ga ns i ng t ra le a i La ty,I C i ac sl FI s ompe ae s ey, nd s d bee t t s f rs ers whe i ns td ur t a houl xpeced o ufe om iks n t a e t apa ntbond c r ct Se C. Luc & Sonsv. t i ht 1 Va. 0, 95 gr es o yme onta . e S. k Boawrc , 57 49 494- ( 9 2 (tt eisf rhr aen t r sof h c u tobes ile fo h e lsn s o f ly 1 3 ) C l te o ie r o wad t e o r t h ed d r m e de s e s r o l. sr The mus a deby t rc r c sa pa e r hi whi hby f i i e y t bi hei onta t nd y ve yt ng c ar nt ndmen c n bec r d ta ha ge a ans t e '.I C c n a tdteAuh rt b f r ma i isp y n t F r us na g i t h m.) FI o tce h t o i e oe kng t a me t o e g o nd ' y ds o ee t thermann b ln eo t c nr c ttld$1 96 931(h $8 ,2 3 ta ic v r d ha t e iig aa c n he o ta t o ae 1 ,8 . te 58 3.3 h t s dhavebe nrti dpl t $ 8 98t twa e nmalypadt I C) Thus a t houl e eane us he 33,65. ha s ve l i o FI . , t he tm e i pai Fer us I C c d notha e c e t ta hi m or t n t s a ot tw oul i t d g on, FI oul ve xpe t d ha nyt ng e ha hi m m d be a ia e s di lt rs k t c risl s so t pa ntbo Thea r oft val bl houl t ae ee o ove t os e n he yme nd. wa d he $85, 23. on t Co r c Rea na c am plc I C i e c l t poston i e c e t be 8 33 he nta t ti ge l i a es FI n xa ty he ii t xpe t d o i be o e m a ng t pa e t Fe g on. n fr ki he ym nt o r us Aft consderng t s al si oft pr er i i he m l ze he epaym entnm ount asw el as t i entonsand , l he nt i e xpec a i oft pa test o houtt dipu e t co tfndst tt Aut iy' f iur t t tons he r i hr ug he s t , he ur i ha he hort s a l e o 12 r t i apori oft Conta tprc di nota e an ton he r c ie d moun t a ma ei latr to ofI C' c r t to tra le ai n FI S ontac wih Ca nel.Thus I C' cli f rt $286, . wilbede ed. t r l , FI S am o he 57144 l ni ii i. Pr j eudgme I er s nt nt e t I C as se sp eu g n itr s u d rVA. EANN. 8013 2o a ycam f r FI lo e k rj d me t nee t n e COD j . - 8 n n li o wh c i i s c e su.Un e Vigni lw, d cso t a r p eu me titr s i wi nte ih t s u c sf l d r r i a a a e iin o wad rj dg n n ee t s t h hi s md dicrton oft c t Hn ot s ei he our. nnon Ar tong& Co. Sumio o Tr s & Ba nc Co. 973 msr v. tm ut nki , F.d 3 9 3 9( t Ci.1 9 )(i n M ak v S n o 2 Va 35 ( 9 6 Dititc u t 2 5 , 6 4h r 9 2 ct g r s . a z , 31 . 0 1 8 $. src o rs i s o l t ihtee ute i ap riu a c s t d tr newh t e a a r of rj d me t h u d t g h q iis n a t lr a e o ee mi eh r n wad p eu g n we c i ees i a o it ' M oor Br .Co. Br & Ro l .207F.d71 727( hCi. ntr t s pprprae. ' e os v. own ok nc, 3 7, 4t r 2 0 ) Th c u ti d i ti c s t a a a r of rj g n itr s i n twarn e Th 0 0 . e o r fn s n h s a e h t n wad p eud me t n ee t s o ra td. e bassf t c tsde son i t tt diput be wee t pa tesi ve age nel al i or he our' cii s ha he s e t n he ri nvol d nui eg quesi t tt pari swe e e tte t ltgae, nd t net rpa t a a st ha a t d i ton ha he te r n ild o ii t a hat ihe ry ppe r o ve c e n b dfi S eHe tv. te, 3 F. u p. 9 8 0( . Va 1 7 ; n ie tl n . . a at e wit Hu tr 4 2 S p 7 5 0 W D. . 97 ) Co tn n a l s Co, h. 90 F. u p. t 4 Thec u tt eeo e wi d n l C' r q e tfra a r o p eud me t 8 S p a 3 9. o r,h rf r, l e y Fl s e u s o n wad f rj g n l i e es. ntr t 11 1. Conc us on l i Fort f e ng r as ,t c t l gr nti pa ta de i pa tI C' moton f he or goi e ons he our wil a n r nd ny n r FI S i or s mmayj d me t a wela g a ti p r a dd n i p r t eAuh rt ' moinf rs mma. u r u g n , s l s rn n at n e y n a th to iy s to o u l y j g n .Thec u t lod ne I C' rq e t o p eud me tn ee t ud me t o r as e is FI S e u s f r rj g n itrs. The Clr i die td t s nd c rii d c esoft sor rt alcouns ofr c d. e k s r ce o e e tfe opi hi de o 1 el e or ENTER:Ths ,9àl d yo Spe e i 7 - a f etmbr , , 2012. .- t. . I ,zw Chi U nied St esD i rctJudge ef t at sti 13