Board Of Education v. Hartford Accident & Indemnity Co.

504 N.E.2d 1000 (1987)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Kiendl Construction entered into a contract with Board of Education (P) to construct pool facilities for two high schools. In accordance with statutory requirements, Kiendl executed and delivered to P both a performance bond in the amount of $1,801,261 and a labor and material bond for the same amount. The work was substantially completed on August 4, 1975, as indicated by the certificate of completion issued by the architect. Final payment was to become due when the certificate was issued. On April 19, 1985, P sued Hartford (D) alleging that Kiendl failed to properly construct the pool and that Kiendl no longer existed as a legal entity. P sought damages from the performance bond and also from the labor and material payment bond. D filed an answer to the performance bond count and a motion to strike the labor and material payment bond count. On the motion to strike, D contends that P was not the party for whose benefit the labor and material bond was obtained. D also asserted an affirmative defense that any action on the performance bond must be brought within two years. The trial court granted the motion to strike and D’s motion for summary judgment. There was no legal reason not to enforce the two-year limitation provision in the performance bond. The court also held that P was not an intended third party beneficiary of the labor and material bond. P appealed.