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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 15, 2009 Decided November 27, 2009 

No. 08-7059 

HUNT CONSTRUCTION GROUP, INC., 

APPELLANT

v. 

NATIONAL WRECKING CORPORATION, ET AL., 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:05-cv-00165) 

David T. Dekker argued the cause for appellant. On the 

briefs were Michael S. McNamara and Laura R. Thomson. 

Michael C. Zisa argued the cause for appellees. With him 

on the brief were Stephen M. Seeger and Leonard A. Sacks. 

Edward G. Gallagher filed the brief for amicus curiae in 

support of appellees and urging affirmance. 

Before: TATEL and BROWN, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

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WILLIAMS, Senior Circuit Judge: Hunt Construction 

Group sought relief in a diversity action against a defaulting 

subcontractor and against two sureties on the subcontractor’s 

performance bond. The sureties’ defenses included the 

ground that Hunt had failed to give timely notice of default, 

thereby depriving them of any realistic opportunity to exercise 

their rights under the bond to cure the subcontractor’s 

defective performance. The district court agreed, granted 

summary judgment in their favor, and issued an order under 

Rule 54(b) of the Federal Rules of Civil Procedure, enabling 

Hunt to file an interlocutory appeal on the issue. Hunt Constr. 

Group, Inc. v. Nat’l Wrecking Corp., 542 F. Supp. 2d 87 

(D.D.C. 2008). Hunt now appeals, claiming that the bond 

does not make such notice a condition of the sureties’ liability. 

We affirm. 

* * * 

Hunt subcontracted excavation work for the construction 

of an Embassy Suites Hotel in Washington, D.C., to the 

National Wrecking Corporation, which agreed to complete the 

work by February 12, 2004. Around the time the performance 

was due to be completed, Hunt learned that the work would be 

delayed. Hunt complained to National Wrecking and incurred 

additional expenses for expediting the work of other 

subcontractors to make up for National Wrecking’s delays and 

meet the overall project deadline. National Wrecking finally 

completed its work on April 6, 2004. 

Suing National Wrecking for breach of contract, Hunt in 

its second amended complaint added as defendants the two 

sureties on a performance bond for National Wrecking—XL 

Reinsurance America, Inc., and the United States Surety 

Company. Although Hunt admits that it knew by early 

February 2004 that National Wrecking’s excavation work 

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would be delayed, it did not then—or for five months 

thereafter—give the sureties notice of its position that the 

delays constituted a default under the subcontract, opting 

instead, without consulting the sureties, to use the other 

subcontractors to make up for National Wrecking’s 

performance. Hunt formally notified the sureties of its 

potential claim when it declared National Wrecking to be in 

default on July 13, 2004, more than three months after 

National Wrecking’s work had been completed.

* * * 

The performance bond form at issue in this case—which 

Hunt selected—provides as follows: 

[A] National Wrecking Corporation . . . as Principal . . . 

and United States Surety Company & XL Reinsurance 

. . . , as co-sureties . . . are held and firmly bound unto 

Hunt Construction Group, Inc. . . . as Obligee . . . in the 

amount of . . . $1,960,496 . . . .

[B] NOW, THEREFORE, THE CONDITION OF THIS 

OBLIGATION is such that, if Principal shall promptly 

and faithfully perform said subcontract, then this 

obligation shall be null and void; otherwise it shall 

remain in full force and effect. 

. . . . 

[C] Whenever Principal shall be, and be declared by 

Obligee to be in default under the subcontract, the 

Obligee having performed Obligee’s obligations 

thereunder: 

(1) Surety may promptly remedy the default subject to 

the provisions of paragraph 3 herein, or; 

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(2) Obligee after reasonable notice to Surety may, or 

Surety upon demand of Obligee, may arrange for the 

performance of Principal’s obligation under the 

subcontract subject to the provisions of paragraph 3 

herein; 

(3) The balance of the subcontract price, as defined 

below, shall be credited against the reasonable cost of 

completing performance of the subcontract. . . . 

J.A. at 130 (bracketed letters added for clarity of reference). 

The bond incorporates the language of the American Institute 

of Architects (“AIA”) Document A311. 

The parties agree that the issue is governed by District of 

Columbia law. Hunt urges us to conclude that, if directly 

presented with the issue, the District’s courts would adopt the 

reasoning of Colorado Structures, Inc. v. Insurance Co. of the 

West, 167 P.3d 1125 (Wash. 2007), which held that the AIA 

Document A311 bond at issue there did not require notice as a 

condition precedent to recovery. 

But the provisions of paragraph C are nonsensical without 

an understanding that the surety’s duties depend on the 

obligee’s declaring the principal to be in default and giving 

notice of the declaration to the principal and the surety. 

Under Hunt’s contrary reading, paragraph C’s explicit grant to 

the surety of a right to remedy the default itself would be 

operative only if the obligee chose to give it notice. Such a 

view would render that right nearly meaningless. Thus, 

construing the A311 bond, the Second Circuit explained in 

Elm Haven Construction Ltd. Partnership v. Neri 

Construction LLC, 376 F.3d 96 (2d Cir. 2004): 

In order to trigger [the surety]’s liability under the 

Performance Bond, two conditions had to be met. First, 

[the principal] had to be “in default” under the 

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subcontract agreement, and second, [the obligee] had to 

“declare[] [the principal] to be in default under the” 

subcontract agreement. Such a declaration of default had 

to be made to [the surety] in precise terms. 

Id. at 100; see also L&A Contracting Co. v. S. Concrete 

Servs., Inc., 17 F.3d 106, 111 (5th Cir. 1994) (“A declaration 

of default sufficient to invoke the surety’s obligations under 

the [A311] bond must be made in clear, direct, and 

unequivocal language. The declaration must inform the surety 

that the principal has committed a material breach or series of 

material breaches of the subcontract, that the obligee regards 

the subcontract as terminated, and that the surety must 

immediately commence performing under the terms of its 

bond.”). 

Even if Hunt had declared a default in a timely fashion, 

the bond makes clear that the obligee may arrange to complete 

unfinished work only “after reasonable notice to Surety.” J.A. 

at 130 (emphasis added). In other words, even after declaring 

a default, Hunt could proceed to remedy the default on its own 

only after it gave “reasonable notice” to the sureties that it 

intended to do so. It gave no such notice.

Colorado Structures, on which Hunt primarily stakes its 

claim, reads the default and notice requirements out of the 

A311 bond form by reasoning that paragraph A, by itself, 

creates the surety’s liability to the obligee and that paragraph 

B subjects that liability to “one—and only one—express 

condition subsequent,” namely, that the principal has not fully 

and faithfully performed the contract. 167 P.3d at 1131-32. 

Colorado Structures read paragraph C as merely providing 

that certain remedies would be available when the conditions 

contained in that paragraph (that the principal has defaulted, 

the obligee has declared the default, and the obligee has 

performed its obligations) were met. Otherwise, the common 

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law would provide for remedies and the measure of damages. 

Id. at 1132. 

Contrary to the Colorado Structures court, we do not 

attach talismanic significance to the fact that paragraph B 

“us[ed] the word ‘condition’ in its singular form,” id., even in 

the singular preceded by the word “the.” In reading contract 

provisions we take the contract’s entirety into account, 

seeking to give all its provisions effect. Steele Founds., Inc. v. 

Clark Constr. Group, Inc., 937 A.2d 148, 154 (D.C. 2007). 

Hunt points us to no case in the District of Columbia 

suggesting that a contract’s labeling a particular provision as a 

“condition,” in the singular, gives rise to an inference that no 

other provisions of the contract can also be conditions 

precedent. And in the context of the bond form before us, 

such an inference would gut rights specifically afforded the 

surety. 

Citing International Fidelity Insurance Co. v. County of 

Rockland, 98 F. Supp. 2d 400, 435 (S.D.N.Y. 2000), and 

Walter Concrete Construction Corp. v. Lederle Laboratories, 

788 N.E.2d 609, 610 (N.Y. 2003), Hunt also argues that 

because the contract could have imposed a condition 

precedent in clearer language than it did, we should construe 

the bond not to include such a condition. With the benefit of 

hindsight, of course, the parties in nearly every case of 

contract interpretation could have made their contract more 

clear, at least in a way suited to the problem which in fact 

arose—though possibly making it less clear with reference to 

other problems. The relevant question is not whether the 

contract uses the most precise language a court can imagine 

ex post but how best to read the contract as actually written. 

See Mamo v. Skvirsky, 960 A.2d 595, 599 (D.C. 2008). 

Finally, Hunt contends that even if the bond form requires 

notice of some kind, the requirement is merely an independent 

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promise for which the sureties may recover damages, not a 

condition precedent to their liability under the bond. See 

generally 13 Williston on Contracts § 38:5, at 382 (4th ed. 

2005). But “[i]n the District of Columbia, ‘[n]otice provisions 

in insurance contracts are of the essence of the contract.’” 

Travelers Indem. Co. v. United Food & Commercial Workers 

Int’l Union, 770 A.2d 978, 991 (D.C. 2001) (quoting 

Graycoat Hanover F St. Ltd. P’ship v. Liberty Mut. Ins. Co., 

657 A.2d 764, 768 (D.C. 1995)); see also U.S. Shipping Bd. 

Merchant Fleet Corp. v. Aetna Cas. & Sur. Co., 98 F.2d 238, 

242 (D.C. Cir. 1938) (“By almost universal custom fidelity 

bonds as now written require notice of default within a limited 

period of time, and that provision the courts enforce according 

to its strict terms. And in such a case it is immaterial whether 

the surety is able to show it was prejudiced by failure to 

receive notice . . . .”). In context, the requirements listed in 

the first clause of paragraph C are properly read as true 

conditions precedent, in the absence of which the surety has 

no liability on the bond. Sureties who require notice of 

default so that they can themselves take remedial action 

presumably are unwilling to submit to the vagaries of 

litigation a calculation of the exact impact of being denied 

notice. 

Hunt primarily invokes Conesco Industries, Ltd. v. 

Conforti & Eisele, Inc., 627 F.2d 312, 316 (D.C. Cir. 1980), 

for the proposition that proof of prejudice is required, but we 

so stated only after finding that the particular bond before the 

court did not make notice “a condition precedent to liability 

under the bond.” In light of our contrary interpretation of the 

bond form here, Conesco’s view does not apply. 

The judgment of the district court is therefore 

Affirmed. 

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