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Case Citations [1] (July 2020 - August 2021)

handle is hein.ali/retsgy0593 and id is 1 raw text is: SURETYSHIP AND GUARANTY 3D CHAPTER 1. TRANSACTIONS GOVERNED BY LAW OF SURETYSHIP AND GUARANTY § 1. Scope; Transactions Giving Rise to Suretyship Status D.Colo.Bkrtcy.Ct.2020. Cit. in sup.; com. (d) and illus. 1 cit. in sup. Sub-subcontractor on a construction project filed an adversary proceeding against Chapter 7 debtor, who was sole owner of subcontractor that failed to pay sub-subcontractor, seeking a determination that its claims for civil theft and for damages under general contractor's payment bond were nondischargeable on grounds of fraud. After a bench trial, this court found in favor of sub-subcontractor, holding that it retained its status as the real party in interest to assert a claim against debtor even though it had received payment of its invoices under a settlement with general contractor. The court cited Restatement Third of Suretyship & Guaranty § 1 in explaining that, by paying sub-subcontractor's claim directly rather than allowing the payment bond to be drawn upon, general contractor became entitled to subrogation rights, such that any recovery by sub-subcontractor was subject to a trust in favor of general contractor up to the amount general contractor paid under the settlement. In re McGill, 623 B.R. 876, 885. CHAPTER 5. ENFORCEMENT OF SECONDARY OBLIGATIONS TOPIC 4. REVIVAL OF SECONDARY OBLIGATIONS § 70. When Obligation of Secondary Obligor Revives N.D.Ill.2020. Cit. and quot. in sup. After the bankruptcy court ordered subcontractor to return monies paid to it by general contractor who declared bankruptcy shorty after making the payment, subcontractor sued sureties, alleging that it was entitled to payment by defendants pursuant to the parties' payment bond. This court granted plaintiff's motion for partial summary judgment and denied defendants' motion for summary judgment, holding that, as a matter of first impression, the Illinois statute of limitations for plaintiff's claim on the payment bond began to run when plaintiff was ordered to repay monies obtained from general contractor. Citing Restatement Third of Suretyship & Guaranty § 70, the court explained that the statute of limitations began to run when plaintiff was forced to return the monies paid to it by general contractor and revived defendants' obligation to plaintiff, because prior to the revival plaintiff did not suffer an injury that would have justified bringing an action. Myers Controlled Power, LLC v. Fidelity and Deposit Company of Maryland, 476 F.Supp.3d 710, 715, 716. CHAPTER 6. RULES APPLICABLE TO PARTICULAR SECONDARY OBLIGATIONS TOPIC 1. LEGALLY MANDATED BONDS § 73. Penalties COPYRIGHT ©2021 By THE AMERICAN LAW INSTITUTE All rights reserved Printed in the United States of America For earlier citations, see the Appendices, Supplements, or Pocket Parts, if any, that correspond to the subject matter under examination.

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