[DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 1- 16 04 1

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 4 :1 0- cv -1 00 77 -J LK HARTFORD CASUALTY INSURANCE COMPANY, a fo rei gn co rp or at io n Plai nt iff -Co un te r Defen da nt -Ap pe ll ee, ve rs us INTRASTATE CONSTRUCTION CORP., a Fl or id a co rp or at io n, D efen da nt -Ap pe ll an t, CITY OF MARATHON, a Fl or id a m

un ic ip al it y , Defen da nt -Co un te r Cla im an t-Ap pe ll an t.

__ __ __ __ __ __ __ __ __ __ __ __ App eal s fr om

th e Uni te d S ta te s Di st ric t Co urt fo r th e So uthe rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Dece m be r 17 , 20 12 ) Case: 11-16041 Date Filed: 12/17/2012 Page: 1 of 24Befo re HULL andBLACK, Cir cu itJu dg es , andGOLDBERG, Ju dg e. * PER CURI AM: Inth is de cl arat ory

jud gm en t ac ti on ari si ng fro m su ret y bo nd s o n a co ns tru ct io n c on tra ct , def en da nt s t he Cit y

of M arat ho n (“ Mar at ho n” ) an d In tra st at e Co ns tru ct io n C or po rat io n (“ In tra st at e”) app eal th e d is tri ctco urt’s g ran t of su m m ary jud gm en t t o p la in ti ff Hart fo rdCas ua lt y Ins ur an ce Co m

pa ny (“ Hart fo rd ”) o n Har tfo rd ’s cla im forde cl arat ory

jud gm en t as to it s s ur et y li ab il it y . Defen da ntMara th on als o app eal s t he di st ric t co urt’s (1 ) gr an t o f su m m ary jud gm en t fo r Hart fo rdon Mara th on ’s cou nt ercl ai m ag ai ns t Hartfo rd , and(2) de ni al of M arat ho n’s m ot io n fo r pa rti al su m m ary jud gm en t o n M aratho n’s
co un te rcl ai m . After r ev ie w andora l ar gu m en t, we re ve rs e in pa rt, v acat e in pa rt,
an d re m an d fo r furth er p ro ceed in gs . I. BACK GROUND In20 00 , Co ng res s ap pr op ria te d $ 10 0 m il li on for th e co ns tru ct io n o f
was te wate r tr eat m en t fa ci li ti es to im pr ov e wat er qua li ty in t he Flo rid a Key s Nati on al Mari ne San ctua ry . Purs ua ntto th is co ng res si on al ap pr op ria ti on , Mar atho n, a m

un ic ip al ity

in th e Fl or id a Key s, i ni ti at eda se rie s o f pr ojec ts to

Honora ble Richard W. Goldber g , United States Court of International Trade J udg e, * sitti ngby designation. 2 Case: 11-16041 Date Filed: 12/17/2012 Page: 2 of 24co ns tru ctwast ewat er t reat m en t fa ci li ti es wit hi n s ev eral ge og rap hi cal servi ce ar eas

of th e ci ty. Thi s ap pe al co nc ern s t he co ns tru ct io n o f was te wate r tr eat m en t faci li ti es in Serv ic e Areas 3 an d 7 (refe rredto as “ Area 3 ” an d “ Area 7 ”). A. Con st ruct io n Con tra ct fo r the Area 3 Pro ject Mar at ho n s ol ic it edpubl ic bi ds fro m va rio us co nt ract or s t o c on st ru cta was te wate r tr eat m en t fa ci li ty in Are a 3 (“ th e Area 3 pro ject” ). Int ras ta te subm it te d th e win ni ng bi d i n t he am ou ntof $ 2,0 61 ,00 0. In May 200 9, M arat ho n e nt eredin to a fo rm al co nt ractwit h In tra st at e fo r th e co ns tru ct io n o f th e Area 3 pro ject. The 1
co nt ractge ne ral ly des cri be d t he workas f ol lo ws: “ th e Ci ty of Mar at ho n S erv ic e Area 3 W as te wate r Treat m en t Fa ci li ty. The p ro ject c on si st s o f co ns tru ct in g t an ks , bu il di ng s, an d i ns ta ll in g was te wate r tr eat m en t an d p um pi ng faci li ti es , com

pl et e, in pl ace, a ll in acco rd an ce wi th th e co ns tru ct io n d rawi ng s an d t ech ni cal sp eci fic at io ns .” Hart fo rdwas n ota pa rty or s ig na to ry to th is co ns tru ct io n c on tra ct . The co nt ract , ho wev er, req ui redInt ras ta te to furni sh bo th a pa y m en t an d a pe rfo rm an ce b on d t o s ecu re the co ns tru ct io n p ro ject. Th e p aym en t an d pe rfo rm an ce b on ds were t o b e in “ th e am ou ntequa l t o 1 00 % of t he Co nt ractPri ce pa y ab le un de r th e Co nt ract .” Fu rth erm or e, th e p erfo rm an ce b on d was to

The c ontrac t was date d April 14, 2009, but Marathon (through its may or) signed the 1 contra ct on May

27, 2009. 3 Case: 11-16041 Date Filed: 12/17/2012 Page: 3 of 24“ gu aran te e th e fu ll an d fa it hf ul ex ecu ti on of t he W ork i n a n a m ou ntequa l t o 1 00 pe rcen t (1 00 %) of

th e to ta l Co nt ractPri ce.” The co nt ractan ti ci pa te d p os si bl e fu tu re ch an ge s t o t he workdo ne on th e Area 3 pro

ject. Sp eci fic al ly, th e co nt ractpro vi de d: “ The Co nt ractDocu m en ts m ay be am en de d t o p ro vi de forad di ti on s, d el et io ns , andrev is io ns in th e Workor t o
m od ify the term s an d c on di ti on s t he reo f” t hr ou gh a writ te n a m en dm en t o r a ch an ge ord er. In an ot he r se ct io n, en ti tl ed“ Ch an ge s i n t he W ork,” th e co nt ract si m il arl y st at ed : W it ho ut in va li da ti ng th e Co nt ract an d wit ho ut no ti c e to an y su ret y , CITY m ay , at an y ti m e or fro m ti m e to ti m e, or de r ad di ti on s, de le ti on s, or rev is io ns in th e W ork by a Writ te n Am en dme n t o r Ch an ge Ord er. Upo n rece ip t of an y su ch do cu m en t, CONTRACTOR sh al l pr om pt ly p r o c eed wit h th e W ork in vo lv ed whi ch wil l be pe rfo rm ed un de r t h e ap pl ic ab le co nd it io ns of th e Co nt ract Doc um en ts (ex cep t as othe rwis e sp eci fic al ly pr ov id ed ). All su ch ch an ge s in th e W ork sh al l be au th or iz ed by a Cha ng e Ord er. The co nt ractfur th er p ro vi de d t ha t i f th e su ret y ’s bo ndrequi redno ti ce o f an y ch an ge s, In tra st at e wou ldbe res po ns ib le for pro vi di ng su chno ti ce, an d t he bo nd
wou ldbe ad

jus te d t o re fle ctth e ch an ge an d i nc reas edco ve rag e, as fol lo ws: [i]f no ti ce of an y ch an ge affe ct in g th e ge ne ral sc op e of th e W ork or th e pr ov is io ns of th e Co ntract Doc um en ts . . . is requi red by th e pr ov is io ns of an y Bo nd to be gi ve n t o a s ur et y , t he gi vi ng of an y su ch no ti ce wil l be CONTRACTOR’S res po ns ib il it y . The am ou nt of each ap pl ic ab le Bo nd wil l be ad

jus te d to refl ect th e eff

e ct of an y su ch ch an ge , an d ev id en ce o f in crea se d c ov erag e p ro vi de d t o t he CITY.
4 Case: 11-16041 Date Filed: 12/17/2012 Page: 4 of 24(em

ph as is ad de d)
. The co nt ractco nt ai ne d aterm in at io n p ro vi si on all owi ng Mara th on to te rm in at e th e co nt ractwit h o r wit ho utcau se . If Mara th on term in at edth e co nt ract fo r cau se , su ch as I ntras ta te ’s fai lu re t o p erfo rm it s co nt ractua l o bl ig at io ns , th e co nt ractpro vi de d t ha t t he su ret y wou ldbe res po ns ib le fortak in g o ve r an d pe rfo rm in g t he co ntractforArea 3 . Howev er, i f Mar at ho n t erm in at edth e co nt ract wit ho utcau se , th e su ret y ’s res po ns ib il it y fortak in g o ve r th e Area 3 pro ject wo ul d
no t b e tr ig ge red
. 2 B. Ha rtfo rd’s Bo nds On J un e 3 , 20 09 , Hartf

or d i ss ue d ape rfo rm an ce an d apa ym en t b on d, ea ch in th e am ou ntof $ 2,0 61 ,00 0, fo r th e Area 3 pro ject. Th e b on ds were s ig ne d o n Hart fo rd ’s beh al f by its att orne y -in -fac t, S.P. Hu m en ch ic k. At ta ch edto bo th th e pe rfo rm an ce an d p aym en t b on ds was acert ifi cat e fro m Hart fo rden ti tl ed“ Po wer o f Att orne y ,” whi ch ex pr es sl y au th or iz edHum en ch ic k t o s ig n a s a s ur ety an d t o ex ecu te bo nd s o n Hartfo rd ’s beh al f. The pe rfo rm an ce b on d i de nt ifi edth e u nd erl y in g “ Co nt ract ” b et ween Mar atho n a ndInt ras ta te as “ Ci ty of Mar atho n S erv ic e Area 3 W as te wate r an d The c ontrac t languag e did not expressly discharg e the sure ty

from liability

upon 2 Marathon’s termination of Intrastate w ithout cause. How ever , Marathon does not dispute that its termination of Intrastate w ithout cause would have absolve d Har tford. 5 Case: 11-16041 Date Filed: 12/17/2012 Page: 5 of 24St orm

wate r Pro ject.” Hartf

or d’s p erfo rm an ce b on d fo r th e Area 3 Co nt ractals o pr ov id ed : THE CONDITION O F THIS BOND is th atif the CONTRACTOR: 1. Perf

orm s sa i d co nt ract in acco rd an ce with it s te rm s an d co nd it io ns ; an d 2. Pays CITY al l lo ss es , da m ag es (d ire ct a n d c on se qu en ti al in cl ud in g de la y an d li qu id at ed da m ag es ), ex pe ns e s , c os ts , an d at to rn ey ’s fees , in cl ud in g ap pe ll at e pr oc eed in gs , th at CITY su s t a in s be cau se of a de fau lt by CONTRACTOR un de r th e CONTRACT; a nd 3. Pays CITY an d al l ot he r am ou nt s du e CITY by CONTRACTOR be cau se of a de fau lt by CONTRACTOR un de r th e CONTRACT; an d 4. Perf

orm s th e gu aran te e of al l work an d m at eri al s fu rn is he d un de r th e CONTRACT fo r th e ti m e sp eci fie d i n t he CONTRACT; THEN T HIS BOND IS VOID, OTHERW ISE, IT REMAINS IN FULL FORCE. W it h re ga rdto po ss ib le futur e ch an ge s i n the Area 3 Co nt ractbe twee n Mar atho n a ndInt ras ta te , th e p erfo rm an ce b on d s ta te d: “ Any chan ge s i n o r un de r th e Co nt ractDocu m en ts an d c om pl ia nc e o r no nc om

pl ia nc e with fo rm al it ie s, co nn ect edwit h t he Co nt ractor wi th th e ch an ge s, d o n otaffe ctth e Su ret y ’s ob li ga ti on un de r th is bo nd . Sure ty hereb y waiv es no ti ce o f an y

alt erat io n o r ex te ns io n o f ti m e m ad e b y th e Ci ty.” On Au gu st3, 2 00 9, M arat ho n i ss ue d In tra st at e a “ Cert ifi cat io n o f 6 Case: 11-16041 Date Filed: 12/17/2012 Page: 6 of 24Co nt ract or ’s Ins ur an ce an d B on di ng ” fo r th e Area 3 pro ject, ce rti fy in g t ha t In tra st at e h adob ta in edpa ym en t an d p erfo rm an ce b on ds fro m Hart fo rdin th e
am ou ntof $ 2,0 61 ,00 0 e ach . Two da y s l at er, Ma rat ho n i ss ue d In tra st at e a “Not ic e to Pro ceed ” o n t he Area 3 pro ject. By Apri l 2 01 0, ap pr ox im at el y eig htm on th s af

te r st art in g c on st ru ct io n o n th e Area 3 wast ewat er t reat m en t fa ci li ty, In tra st at e was in cu rri ng lo ss es on th e pr ojec t, an d In tra st at e’s subc on tra ct or s an d s up pl ie rs be ga n fi li ng “Not ic es of Non pa ym en t” wit h Har tfo rdan d M arat ho n. OnApri l 1 4, 2 01 0, In tra st at e co nt act edHart fo rdto in fo rm Hart fo rdof I ntras ta te ’s in so lv en cy an d t he ne edfor fin an ci al ass is tanc e to co m pl et e it s v ari ou s b on de d p ro jects , in cl ud in g the Area 3 Pro ject. 3 C. Area 7 Pro ject On Ap ril 27 , 20 10 , Int ras ta te an d M aratho n e xe cu te d ado cu m en t en ti tl ed

“ Ch an ge Orde r No. 1 ” to th e p ro ject d es cri be d a s “ Ci ty of Mar at ho n S erv ic e Area 3 Wast ewat er Trea tm en t Fa ci li ty ProjectCo nt ractda te d M ay 26 , 20 09 , in th e
am ou ntof $ 2,0 61 ,00 0.0 0.” In C ha ng e Ord er No . 1 (t he “ Area 7 Ch an ge Orde r”), In tra st at e an d M arat ho n a gr eedto am en d the Area 3 Co nt ractby tran sf erri ng th e

After revie wingIntrastate’ s books and financ ial rec ords, Har tford dire ctly

informed 3 Intrastate a

nd Intrastate’ s bonding a g ent that Har tford would no long er be issuing new bonds or expanding bond c overa g e on existi ngbonded proje cts. 7 Case: 11-16041 Date Filed: 12/17/2012 Page: 7 of 24“ sc op e o f work fo r th e Area 7 W as te wate r Treat m en t Fa ci li ty Project
. . . in to th e

Area 3 W as te wate r Treat m en t Fa ci li ty ProjectCo nt ract .” Bo th Int ras ta te an d Mar atho n s ig ne d t he Area 7 Ch an ge Orde r. Att ach edto th e Area 7 Ch an ge Orde r was a “ Ch an ge Orde r Su m m ary, ” pr ov id in g, i n p art : THE FOLL OW ING CHANGES ARE MADE TO THE CONT RACT DOCUMENTS: (1 ) Orig in al Co nt ractPri ce $2 ,06 1,0 00 .00 (2 ) Cu rren t Co nt ractPri ce (Ad jus te d b y Prev io us Ch an ge Orde rs ) $2 ,06 1,0 00 .00 (3 ) Tot al Pro po se d C ha ng e in Co nt ractPri ce $2 ,98 4,4 87 .00 (4 ) New Co nt ractPri ce (I te m 2 + I te m 3) $5 ,04 5,4 87 .00 (5 ) Orig in al Co nt ractTim e 30 0 Days (6 ) Cu rren t Co nt ractTim e (Ad jus te d b y Prev io us Ch an ge Orde rs ) 36 0 Days (7 ) Tot al Pro po se d C ha ng e in Co nt ractTim e 0 Days (8 ) New Co nt ractTim e (It em 6 + I te m 7) 36 0 Days Area 7 was l oc at edap pr ox im at el y 5.5 m il es away

fro m Area 3 , andth e Area 7 p ro ject was to pro ceedun de r a co m pl et el y sep arat e se t o f pl an s an d sp eci fic at io ns th an th e Area 3 pro ject. Th e ti m el in es for

co m pl et in g t he Area 7
an d Are a 3 pro

jects were al so di ffer en t. Fu rth erm or e, as de sc rib edab ov e, th e Area 8 Case: 11-16041 Date Filed: 12/17/2012 Page: 8 of 247 C ha ng e Ord er ad de d $ 2,9 84 ,48 7 t o t he ori gi na l Are a 3 co nt ractpri ce, i nc reas in g

th e o rig in al co nt ractam ou ntfro m $2 ,06 1,0 00 .00 to $5 ,04 5,4 87 .00
. Mar at ho n s ou gh t Hartfo rd ’s con se ntto th e Area 7 Ch an ge Orde r. On Ma y 14 , 20 10 , Hum en ch ic k, t he att orne y -in -fac t fo r Hart fo rd , sen t M arat ho n alet te r, st at in g t ha t Hartfo rd , as s ur ety on th e Area 3 bo nd , “ he reb y ackno wled ge [s ] an d
co ns en t[s ] to th e in crea se of t he co nt ractpri ce an d p en al su m of t he [Area 3 ] bo nd fro m th e o rig in al va lu e o f $2 ,06 1,0 00 .00 to $5 ,04 5,4 87 .00 inacco rd an ce wi th Ch an ge Orde r No. 1 is su edeffe ct iv e Apr il 27 , 20 10 .” On M ay 24 , 20 10 , Mara th on is su edInt ras ta te a se pa rat e “Not ic e to Pro ceed ” fo r th e Area 7 pro

ject. Th e Not ic e to Pro ceedpro vi de d, i n p art : “ be fo re y oum ay st artan y W ork a t t he si te , y oum

us t p ro vi de ad di ti on al pe rfo rm an ce & p aym en t
su ret y in th e am ou ntof $ 2,9 89 ,48 7.” D. Ha rtfo rd Retr ac ts its Bo nd o n Area 7 On J un e 3 0, 2 01 0, Hartfo rd ’s Ass is ta ntBo ndCla im Man ag er, J en ni fer Leu sc hn er, s en t a l et te r to Mara th on , st at in g t ha t (1 ) Hart fo rdha d b eco m e aware of Mar atho n a ndInt ras ta te ’s con tra ctforth e Area 7 pro ject, (2 ) Hart fo rdha d i ss ue d a pe rfo rm an ce b on d s pe ci fic al ly for t he Area 3 pro ject, an d (3 ) th e Area 7 pro ject
was no t co ve redby the Area 3 pe rfo rm an ce b on d o r an y ot he r Hart fo rdbo nd
. Leu sc hn er’s l et te r st at edth atArea 7 was a“ se parat e si te an d p ro ject, re ga rd le ss of
9 Case: 11-16041 Date Filed: 12/17/2012 Page: 9 of 24whe th er o r no t a s ep arat e co nt ractwas e xe cu te d o r ch an ge ord er t o t he Area 3

Co nt ractwas i ss ue d fo r th e n ew Si te 7,” a ndth atHart fo rddi d n otag ree t o p ro vi de a b on d fo r Area 7 an d d idno t ag ree t o e xt en d t he Area 3 pe rfo rm an ce b on d to Area 7 . In h er d ep os it io n, Leu sc hn er t es ti fie d t ha t Hu m en ch ic k “ was sp eci fic al ly to ldin writ in g tha t h e d idno t h av e th e au th or it y ” to expa ndbo ndco ve rag e fo r Area 7 . Leus ch ne r di d n otkn ow wh y Hum en ch ic k wro te th e May 14 co ns en t le tt er. Leu sc hn er al so tes ti fie d t ha t s he wrot e th e Ju ne 30 ret ract io n l ette r sh ortl y be fo re b eco m in g aware o f Hum en ch ic k’s M ay 14 co ns en t l ette r. 4 On J ul y 2, In tra st at e’s at to rn ey

res po nd edto Hart fo rd ’s Ju ne 30 let te r, st at in g t ha t h e was “ sh oc ke d” by the let te r in li gh t o f Hum en ch ic k’s p rio r ex pr es s co ns en t t o b on d t he Area 7 pro ject. In tra st at e’s at to rn ey st at edth atHart fo rd ’s Ju ne 30 let te r co ns ti tu te d wro ng fu l i nt erfe ren ce wi th Int ras ta te ’s con tra ctwith Mar atho n a ndco ul d “ on ly be v ie wedas an i nt en ti on al ly m al ic io us actde si gn edfor th e so le pu rp os e o f at te m pt in g t o c rip pl e [In tra st at e’s] abi li ty to co m pl et e th e
subjec t co nt ractan d fo rce [ In tra st at e] ou t o f bu si ne ss .” Sh ortl y aft er Hart fo rd
rece iv edth e Ju ly 2 let te r fro m Int ras ta te in fo rm in g Har tfo rdof Hu m en ch ic k’s pr io r co ns en t, Hu m en ch ic k’s au th or it y to acton be ha lf o f Hart fo rdwas t erm in at ed
. The B ond Claims Manag er f or Ha rtford, L aura

Mahler, te stified at her

deposition that 4 Humenchic k “wa s told in April [ 2010] on t wo sepa rate occa sions that he could not and had no authority to issue any

chang e orde rs or ne w bond and c hang e orde rs spec ifically to Sit e 7, and he agree d.” 10

Case: 11-16041 Date Filed: 12/17/2012 Page: 10 of 24E. Mar at ho n’s Termina tio n o f In tra st at e

On Au gu st6, 2 01 0, M arat ho n s en t In tra st at e an d Har tfo rda le tt er en ti tl ed

“Not ic e o f Defau ltan d Term in at io n.” In t ha t l et te r, Mar at ho n s ta te d th atitha d a gr eedwit h In tra st at e, pu rs ua ntto th e Area 7 Ch an ge Orde r, “ to ex pa nd In tra st at e’s sc op e o f work u nd er t he [Area 3 ] Co nt ract .” The let te r fu rth er s ta te d th atMara th on ’s Area 3 co nt ractwit h In tra st at e ex pr es sl y pro vi de d fo r Mar at ho n’s ab so lu te rig htto in crea se th e sc op e o f In tra st at e’s work u nd er the co nt ract , witho ut
no ti ce t o Har tfo rd , andth atth e am ou ntof the pe rfo rm an ce b on d wo ul d

“ au to m at ic al ly” in crea se to co ve r th e rev is edsco pe of t he work
. As n ot edearl ie r, In tra st at e’s un de rlyin g Are a 3 co nt ractwit h M arat ho n ant ic ip at edch an ge s t o t he
co nt ractan d re qu ire d In tra st at e to pro vi de a pe rfo rm an ce b on d i n t he am ou ntof 10 0% o f th e to ta l co nt ractpri ce. Mar at ho n’s No ti ce o f Defau ltan d Term in at io n fu rth er s ta te d t ha t,

“ [n ]otwi th st an di ng th is au to m at ic ex te ns io n o f co ve rag e, [Ma rat ho n] so ug htan d
rece iv edHart fo rd ’s exp res s wri tt en co ns en t t o t he Ch an ge Orde r,” as ev id en cedby Hum en ch ic k’s M ay

14 let te r. Mara th on th en st at ed : Whi le [Hart fo rd ’s] Ju ne 30 [ret ract io n] le tt er can no t, an d do es no t, ha ve an y eff e c t on whe th er th e Perf

orm an ce Bo nd gu aran te es In tra st at e’s pe rfo rm an ce of th e Ch an ge Ord er (it do es ), t he Ju ne 30 Lett er ha s di rect ly fo rced th e Ci ty t o in st ru ct In tra st at e to st op it s wo rk un de r th e Ch an ge Orde r un ti l fu rth er n ot ic e.
11 Case: 11-16041 Date Filed: 12/17/2012 Page: 11 of 24Mar atho n warne d t ha t i t i nt en de d t o h ol d In tra st at e an d Har tfo rdli ab le “ fo r al l

de la y s as so ci at edwit h Har tfo rd ’s att em pt s t o a vo idit s o bl ig at io ns on th e Perf orm an ce Bo nd .” Mar atho n d em an de d tha t Hartfo rdret ractit s J un e 3 0 l et te r,
orels e Ma rat ho n wo ul d t erm in at e th e co nt ractwit h In tra st at e an d h ire an ot he r co nt ract or , whi ch wou ldfur th er ex acerba te th e d am ag es un de r th e co nt ract . Afte r Mar at ho n i ss ue d t he ab ov e Not ic e o f Defau ltan d Term in at io n, In tra st at e p erfo rm edno m or e work o n t he Area 3 an d Are a 7 pro jects
. F. Ha rtfo rd’s Decl ar at or y J udg m ent Act io n a s to Area 7 On Au gu st9, 2 01 0, Hartfo rdfil eda de cl arat ory jud gm en t ac ti on in th e di st ric t co urt ag ai ns t M arat ho n a ndInt ras ta te , ask in g t he co urt t o d ecl are t ha t Hart fo rdha d n o l iabi li ty as to Area 7 . Hartfo rd ’s com pl ai ntdi d n otsee k a ny reli ef fro m it s p erfo rm an ce b on d a s t o Are a 3
. Hart fo rd ’s com

pl ai ntall eg edth atth e Area 7 Ch an ge Orde r was vo idfor il le ga li ty becau se Mara th on fai le d t o s ol ic itan d o bt ai n c om pe ti ti ve bi ds forth e Area 7 pro

ject, as requi redby Flo rid a la w. Alte rn at iv el y , Hartf or d a ss ert edth at th e Area 7 Ch an ge Orde r co ns ti tu te d a“ card in al ch an ge ” to th e u nd erl y in g Are a 3
co nt ract . Bec au se th e Area 7 Ch an ge Orde r was vo id , Hartf or d was no t l iabl e fo r Area 7 workun de r it s Are a 3 bo nd . Hartfo rd ’s com pl ai ntask edth e d is tri ctco urt to de cl are t ha t (1 ) th e Area 7 Ch an ge Orde r was vo idab in it io foril le ga li ty; (2) no
12 Case: 11-16041 Date Filed: 12/17/2012 Page: 12 of 24su ret y

rel at io ns hi p e xi st edbe twee n Har tfo rdan d the de fen da nt s M arat ho n a nd In tra st at e wit h re sp ectto th e Area 7 Ch an ge Orde r; and(3) no bo ndis su edby Hart fo rdaffo rd edco ve rag e fo r th e Area 7 Ch an ge Orde r. On Au gu st12 , 20 10 , sh ortl y aft er fi li ng th e in st an t ac ti on , Hartf or d wro te to In tra st at e rea ffi rm in g i ts Ju ne 30 let te r an d s ta ti ng th atitwou ldno t i ss ue a bo nd fo r Area 7
. Hart fo rdals o s ta te d, i nt er al ia , th atitha d n ot ifi edInt ras ta te pri orto May 14, 2 01 0 (t he da te of Hu m en ch ic k’s co ns en t l et te r) t ha t Hartfo rd“ wou ldno t
co ns id er an y

ad di ti on al bo nd in g, s pe ci fic al ly inc lu di ng th e Si te 7 p ro ject.” G. Mar at ho n’s Coun terc la im as to Ar ea 3 Bo th Mara th on an d In tra st at e an swe redHart fo rd ’s com pl ai nt , bu t o nl y Mar atho n fi le d aco un te rcl ai m . Marat ho n’s co un te rcl ai m ag ai ns t Hartfo rd , fil ed
on Octo be r 18 , 20 10 , con ta in edon e co un t: bre ach of c on tra ctforHart fo rd ’s fai lu re t o c om

pl y wit h i ts ob li ga ti on s u nd er t he Area 3 bo nd . Spe ci fic al ly, Mar atho n a ll eg edth atInt ras ta te ha d b reac he d the un de rlyin g Are a 3 co nt ractan d fai le d t o s at is fy

an y of t he fou r co nd it io ns li st edonth e Area 3 pe rfo rm an ce b on d. As a re su lt , Hartf

or d was requi redto co m

pe ns at e Ma rat ho n fo r da m ag es st emm in g fro m th atbre ach , pu rs ua ntto th e te rm s o f th e Area 3 pe rfo rm an ce b on d. Ma rat ho n as se rte d tha t Hartfo rdfai le d t o h on orit s o bl ig at io ns un de r th e p erfo rm an ce b on d,
cau si ng da m ag es to Mara th on . 13

Case: 11-16041 Date Filed: 12/17/2012 Page: 13 of 24H. Ha rtfo rd’s Ta k eo ve r Off er InNov em

be r 20 10 , Hartf

or d i nf orm edMara th on th atitwou ldbe wil li ng to ta ke ov er t he co m

pl et io n o f th e Area 3 pro

ject, an d t en de reda “ Tak eo ve r Agr eem en t” ou tl in in g t he term s o f th e ta ke ov er. Howev er, Ma rat ho n fo un d t he te rm s o f th e ta ke ov er ag reem en t u na ccep tabl e, an d re qu es te d t ha t Hartfo rdsi m pl y pe rfo rm th e o rig in al bo nd edco nt ract . Hartfo rdde cl in ed , andMara th on hi red
an ot he r co nt ract orto fin is h t he Area 3 pro ject a t t he cit y ’s add it io na l ex pe ns e. I. The Di st ri ct Co urt’ s Su m m ar y J udg m ent O rder Hart fo rdm ov edfor

su m m ary jud gm en t o n b ot h i ts cla im forde cl arat ory rel ie f an d o n M aratho n’s co un te rcl ai m . Mar at ho n, i n turn, fi le d a“ Mo ti on for Part ia l Su m

m ary Ju dg m en t” on it s co un te rcl ai m . Marat ho n a rg ue d t ha t Hartfo rd br each edth e Area 3 pe rfo rm an ce b on d b y fai li ng to tak e o ve r th e Area 3 pro ject aft er In tra st at e’s te rm in at io n, as requi redby the term s o f th e b on d, an d i ns te ad
co nd it io ni ng Hart fo rd ’s com pl et io n o f th e Area 3 pro

ject o n atak eo ve r ag reem en t. Init s m ot io n fo r pa rti al su m m ary jud gm en t, Ma rat ho n d idno t ar gu e th atHart fo rd
wro ng fu ll y

fai le d t o c om

pl et e th e Area 7 pro

ject, an d d idno t al le ge an y da m ag es on th e Area 7 pro

ject. Afte r a h eari ng , th e d is tri ctco urt g ran te d Hartfo rd ’s m ot io n a ndde ni ed Mar atho n’s m ot io n. As to Hart fo rd ’s dec la rat ory jud gm en t cl ai m

reg ard in g Are a
14 Case: 11-16041 Date Filed: 12/17/2012 Page: 14 of 247, t he di st ric t co urt n ot edth at , si nc e th e fi li ng of Ha rtf or d’s co m pl ai nt , “ Defen da nt Mar atho n h as ret ai ne d arep la cem en t co nt ract oran d s ur et y for th e Area 7 Pro

ject atno lo ss , andha s d ecl aredth atitis no t s eek in g d am ag es init s co un te rcl ai m for
co ve rag e o f th e Area 7 Pro ject.” Thu s, t he co urt s ta te d, i t “ wil l n otad dr es s an y arg um en ts th atpe rta in to whet he r a s ur et y rel at io ns hi p p res en tl y

ex is ts be twee n Hart fo rdan d t he Defen da nt s wi th res pe ctto th e Area 7 Ch an ge Orde r orwhet he r Mar atho n m ay

reco ve r fo r br each of c on tra ctforth e al le ge d Are a 7 Perfo rm an ce Bo nd .” Nev ert he le ss , th e d is tri ctco urt p ro ceed edto an al y ze wh et he r Hart fo rdwas li ab le forth e Area 7 pro

ject u nd er Hart fo rd ’s ori gi na l p erfo rm an ce b on d fo r Area 3. Th e co urt co nc lu de d tha t t he Area 7 Ch an ge Orde r co ns ti tu te d a“ card in al ch an ge ” to Int ras ta te ’s un de rlyin g Are a 3 co ns tru ct io n c on tra ct , su ch as t o re li ev e Hart fo rdof a ny liabi li ty for Area7 u nd er i ts Area 3 bo nd . Havi ng di sp os edof Hart fo rd ’s cla im s ab ou t Are a 7 pu rs ua ntto th e car di na l ch an ge do ct rin e, th e di st ric t co urt d idno t ad dr es s wh et he r th e Area 7 Ch an ge Orde r vi ol at edFlo rid a’s
co m pe ti ti ve -b id di ng st atut es . As t o M arat ho n’s b reac h- of -co nt ractco un te rcl ai m , th e d is tri ctco urt
co nc lu de d t ha t Hartfo rddi d n otbre ach th e te rm s o f it s Are a 3 pe rfo rm an ce b on d by no t co m

pl et in g t he Area 3 pro

ject. The d is tri ctco urt re as on ed , in te r al ia , th at
15 Case: 11-16041 Date Filed: 12/17/2012 Page: 15 of 24Mar atho n t erm in at edInt ras ta te forin su ffi ci en t caus e u nd er t he ir Are a 3

co ns tru ct io n c on tra ct , and , pu rs ua ntto th e te rm s o f th atco nt ract , Mara th on ’s te rm in at io n o f In tra st at e fo r in su ffi ci en t caus e rel ie ve d Har tfo rdof i ts ob li ga ti on to bo ndth e Area 3 pro

ject. Sp eci fic al ly, th e co urt fo un d t ha t: (1) Mara th on te rm in at edInt ras ta te “ so le ly becau se Hart fo rdrefu se d t o b on d t he Area 7 ” p ro ject, bu t (2 ) Hart fo rdha d n o o bl ig at io n t o b on d t he Area 7 pro ject i n l ig htof t he card in al ch an ge do ct rin e, (3 ) In tra st at e m ai nt ai ne d a de qu at e b on di ng for th e Area 3 p ro ject, an d (4 ) Mar atho n c ou ldno t re qu ire Int ras ta te to sec ur e b on di ng forArea 7 fr om Hart fo rdsp eci fic al ly in an y ev en t. Acco rd in gl y , th e d is tri ctco urt
co nc lu de d t ha t Hartfo rd ’s refu sa l t o b on d t he Area 7 pro ject was a “ sp ur io us an d im pr op er re as on for

Mara th on to term in at e In tra st at e o n t he Area 3 Pro ject.” The refo re, the di st ric t co urt g ran te d s umm ary jud gm en t i n fa vo r of Hart fo rdon Mar atho n’s co un te rcl ai m for da m ag es in cu rredin co m pl et in g t he Area 3 pro

ject. II . DISCUSSI ON A. Ha rtfo rd’s Decl ar at or y J udg m ent Act io n Reg ar di ng its Lia bi li ty for the Area 7 Pro ject Befo re we ca n c on si de r th e m eri ts of Ha rtf or d’s d ecl arat ory

jud gm en t cl ai m , we m us t fi rs t d et erm in e whe th er t he cla im is m oo t. “ [B]ecau se th e que st io n o f
m oo tn es s i s ju ris di ct io na l i n n atur e, itm ay be rai se d b y

th e co urt s uasp on te , reg ard le ss of wh et he r th e d is tri ctco urt co ns id ereditor i f th e p art ie s b rie fedth e 16 Case: 11-16041 Date Filed: 12/17/2012 Page: 16 of 24is su e.” Nat ’l Adv er. Co . v. Ci ty of Mi am i, 4 02 F.3d13 29 , 13 31 -3 2 (1 1t h C ir.

20 05 ). W e rev ie w qu es ti on s o f m oo tn es s d e n ov o. Id. a t 1 33 1. Arti cl e III o f th e U.S. Co ns ti tu ti on “ li m it s t he juri sd ic ti on of f ed eral co urts to cas es an d c on tro ve rs ie s.” C hr is ti an Co al . of Fl a., In c. v. Un it edSta te s, 6 62 F.3d 11 82 , 11 89 (11 th Cir . 20 11 ) (i nt ern al qu ot at io n m ark s o m it te d) . Sim il arl y , 28 U.S.C. § 2 20 1 p ro vi de s t ha t a d ecl arat ory jud gm en t m ay

on ly be is su edin th e cas e of “ actua l co nt ro ve rs y ,” th atis , a “ subs ta nt ia l co nt in ui ng co ntro ve rs y be twee n pa rti es ha vi ng adve rs e le ga l i nt eres ts .” Em ory v. Pe el er, 7 56 F.2d15 47 , 15 51 -5 2 (1 1t h C ir. 1 98 5) ; s ee 2 8 U.S.C. § 22 01 . This “ co nt in ui ng co nt ro ve rs y m ay no t b e co njec tu ral , hypot he ti cal , or c on ti ng en t; itm us t b e rea l an d i m

m ed ia te , andcrea te a d efi ni te , rathe r th ansp ecu la ti ve th reatof f utur e in jury.” E m ory , 75 6 F .2dat 15 52 . Alth ou gh a cas e m ay ha ve in vo lv edanactua l co nt ro ve rs y in it ia ll y , th e cas e be co m es m oo t “ whe n i t n o l on ge r pr es en ts a li ve co nt ro ve rs y wit h re sp ectto whi chth e co urt ca n g iv e m ean in gf ul rel ie f.” Zin ni v. ER So lu ti on s, In c., 69 2 F .3d 11 62 , 11 66 (11 th Cir . 20 12 ) (i nt ern al qu ot at io n m ark s o m it te d) ; s ee al so Ch ris ti an Co al . of Fl a., In c., 66 2 F .3dat 1 19 0 (s ta ti ng th at , forpu rp os es of Art ic le III, “ th e co nt ro ve rs y

‘ m us t b e ex tantat a ll st ag es of r ev ie w, no t m erel y at t he ti m e th e co m pl ai ntis fil ed .’ ” (quo ti ng Prei se r v. Newk irk , 42 2 U.S. 3 95 , 40 1, 9 5 S . Ct. 23 30 , 23 34 (19 75 ))).
17

Case: 11-16041 Date Filed: 12/17/2012 Page: 17 of 24Inth is cas e, Hart fo rd ’s dec la rat ory jud gm en t co m

pl ai ntso ug hta de te rm in at io n t ha t i t was no t l iabl e as a su ret y on th e Area 7 pro

ject. In rul in g o n Hart fo rd ’s dec la rat ory

act io n, t he di st ric t co urt d ecl in edto ad dr es s t he is su e o f whe th er a s ur et y

rel at io ns hi p e xi st edbe twee n Har tfo rdan d the de fen da nt s (Ma ratho n a ndInt ras ta te ) wit h re sp ectto th e Area 7 pro ject, g iv en th atMara th on su ffer edno lo ss es on th atpro ject. On ap pe al , th e p art ie s d o n otch al le ng e th is im pl ic itfin di ng of m oo tn es s b y th e d is tri ctco urt. Ad di ti on al ly, no th in g i nd ic at es th ateit he r Mar at ho n o r In tra st at e were, o r wil l b e, se ek in g d am ag es fro m Hart fo rd
as to th e Area 7 pro

ject. In de ed , in it s co un te rcl ai m ag ai ns t Hartfo rd , Mara th on di d n otaskforan y

rel ie f wit h re ga rdto th e Area 7 pro ject, b uton ly sou gh t da m ag es on Area 3 . Thu s, atth e ti m e th e d is tri ctco urt i ss ue d i ts su m m ary jud gm en t o rd er, the re was no lo ng er a “ real an d i m m ed ia te ” co nt ro ve rs y

with reg ardto Hart fo rd ’s su ret y li ab il it y on th e Area 7 pro

ject. Se e Em ory , 75 6 F .2dat 15 52 . This lac k o f a l iv e co nt ro ve rs y m oo te d Har tfo rd ’s dec la rat ory jud gm en t cl ai m an d d ep riv edth e d is tri ctco urt o f subjec t m at te r juri sd ic ti on ov er t ha t cl ai m . Acco rd in gl y , we rev ers e th e d is tri ctco urt’s g ran t o f su m m ary jud gm en t t o Hart fo rdon it s d ecl arat ory jud gm en t cl ai m , andrem an d wi th in st ru ct io ns to di sm is s t ha t d ecl arat ory

jud gm en t cl ai m

as m oo t. B. Mar at ho n’s Coun terc la im for B rea ch o f Sure ty Bo nd a s to Area 3
18 Case: 11-16041 Date Filed: 12/17/2012 Page: 18 of 24The on ly iss ue s re m ai ni ng in th is ap pe al are wh et he r th e d is tri ctco urt

co rrec tl y gra nt edsu m

m ary jud gm en t t o Har tfo rdon Mara th on ’s cou nt ercl ai m , and pr op erl y de ni edsu m

m ary jud gm en t t o M arat ho n. As m en ti on edearl ie r, 1 Mar atho n’s co un te rcl ai m all eg edth atHart fo rdbre ach edit s Are a 3 pe rfo rm an ce bo ndby fail in g t o t ak e o ve r orpa y th e co st s o f co m

pl et in g t he Area 3 pro

ject a fte r In tra st at e’s te rm in at io n. Mar at ho n s ou gh t d am ag es fro m Hart fo rd fo r th e lo ss es it in cu rredin hi rin g ano th er co ntract orto co m pl et e th e Area 3 pro

ject. Inres po ns e, Hart fo rddo es no t d is pu te th atit s Are a 3 pe rfo rm an ce b on d was va li dl y is su ed
. Rat he r, Hart fo rdarg ue s tha t i t was no t l iabl e u nd er i ts Area 3 pe rfo rm an ce b on d be cau se (1) Mara th on term in at edInt ras ta te fro m th e Area 3 pro

ject wi th ou t caus e,
an d (2 ) th e te rm in at io n wi th ou t caus e rel ie ve d Har tfo rdof i ts ob li ga ti on s u nd er t he bo nd
. The an swe r to th e co un te rcl ai m is su es th us res ts on whet he r Mar at ho n te rm in at edInt ras ta te forcau se or n ot . Marat ho n c on te nd s t ha t In tra st at e’s fai lu re to bo ndth e fu ll co nt ractpri ce, wh ic h i nc lu de d the Area 7 pro ject, ju st ifi ed te rm in at io n. Hart fo rdres po nd s t ha t M arat ho n i m pe rm is si bl y

term in at edInt ras ta te
on th e Area 3 pro

ject b as edup on Hart fo rd ’s refu sa l t o b on d t he Area 7 pro ject.

We reviewthe district court’s grant or de nial of summary judgme nt de novo, viewing 1 the evidenc e “in the light most favorable to the nonmoving pa rty .” B rown v. Sec ’y

of State of Fla., 668 F .3d 1271, 1274 (11th Cir. 2012) (interna l quotation marks omitted). 19 Case: 11-16041 Date Filed: 12/17/2012 Page: 19 of 24Hart fo rdals o n ot es th at , un de r Fl or id a la w, a publ ic en ti ty m ay no t re qu ire a co nt ract or

to sec ur e a b on d fr om

a sp eci fic bo nd in g c om

pa ny, andMara th on di d
no t p ro vi de Int ras ta te anop po rtu ni ty to o bt ai n b on di ng forArea 7 els ewh ere. We th us tu rnto whet he r Mar at ho n p ro pe rly term in at edInt ras ta te forcau se . To an swe r th atco nt ractterm in at io n q ue st io n, we fo cu s o n wh atMara th on
an d In tra st at e ag reedto in th ei r co ntract . Marat ho n a ndInt ras ta te (atlea st be twee n the m se lv es ) co ns id eredth e Area 7 Ch an ge Orde r to be m erel y an ex te ns io n o f th ei r un de rlyin g c on st ru ct io n c on tra ctforArea 3 , no t an en ti rel y se pa rat e co nt ractforanin de pe nd en t p ro ject. Fo r ex am

pl e, th e Area 7 Ch an ge Ord er, wh ic h was si gn edby bot h In tra st at e an d M arat ho n, ex pr es sl y pro vi de d t ha t th e Area 7 pro

ject “ wil l b e tr an sf

erre d i nt o t he Area 3 W as te wate r Treat m en t Faci li ty ProjectCo nt ract .” Thu s, ac co rd in g t o t he ex pr es s ag reem en t b etween Mar atho n a ndInt ras ta te , on ly one un de rlyin g c on tra ctex is te d b et ween th em , and th aton e co nt ractin cl ud edbo th th e Area 3 an d Are a 7 pro jects
. 2 The un de rlyin g c on st ru ct io n c on tra ctbe twee n M aratho n a ndInt ras ta te for th e Area 3 pro

ject r equi redInt ras ta te to ob ta in pa ym en t an d p erfo rm an ce b on ds to
We express no opinion as to whether the Area 7 Chang e Or der w as ac tually or leg ally

a 2 mere chang e to the under lying Area 3 construction contr act, a s Marathon and Intrastate considere d it to be, or an e ntirely separ ate c ontrac t that did not affec t the Are a 3 construc tion contra ct. For

purposes of this discussion, we f ocus only on what Mar athon and Intrastate a g ree d to by executing the Are a 7 Chang e Or der. 20

Case: 11-16041 Date Filed: 12/17/2012 Page: 20 of 24se cu re t he pro ject i n “ th e am ou ntequa l t o 1 00 % of the Co nt ractPri ce.” The
co nt ractals o re qu ire d In tra st at e to ob ta inad di ti on al bo ndco ve rag e fo r an y in crea se s t o t he sco pe of t he workou tl in edin th e co nt ract , andto pro vi de ev id en ce of th e in crea se d c ov erag e to Mara th on . Bec au se Mara th on an d In tra st at e tr eat edth e Area 7 Ch an ge Orde r as an
am en dm en t t o t he un de rlyin g Are a 3 co nt ract , rathe r th an anen ti rel y sep arat e co nt ract , Intras ta te was c on tra ctua ll y ob li ga te d t o o bt ai n p aym en t an d p erfo rm an ce bo nd s t o c ov er t he Area 7 pro ject. In fact , Mara th on ’s “ Not ic e to Pro ceed ” o n t he Area 7 Ch an ge Orde r st at ed : “be fo re y ou m ay st artan y W ork a t t he si te , y ou m

us t pr ov id e ad di ti on al pe rfo rm an ce & p aym en t s ur ety in th e am ou ntof $ 2,9 89 ,48 7” (th e ad di ti on al co stof the Area 7 pro ject)
. The p art ie s d o n otdi sp ut e th at In tra st at e co ntractua ll y

ob li ga te d i ts el f to pro vi de bo nd in g fo r th e Area 7 pro ject. The reco rdsh ows , ho wev er, tha t In tra st at e d idno t p ro vi de 10 0% b on d
co ve rag e fo r th e Area 7 pro ject, as requi redby the term s o f th e und erl y in g co ns tru ct io n c on tra ct . It i s t ru e th atInt ras ta te sec ur edwrit te n c on se ntfro m Hart fo rd ’s age nt , Hum en ch ic k, t o b on d t he Area 7 Ch an ge Orde r. Howev er, Hart fo rdth en ret ract edit s co ns en t v iait s J un e 3 0 l et te r, st at in g t ha t Hartfo rd
wou ldno t p ro vi de an y

bo nd s fo r th e Area 7 pro ject. Ev en if Hartfo rd ’s di sa vo wal
orret ract io n wo ul d u lt im at el y be he ldto be leg al ly im

pr op er i n aco urt o f law
21 Case: 11-16041 Date Filed: 12/17/2012 Page: 21 of 24y ears lat er, the factrem ai ns th atHart fo rdde ni edco ve rag e fo r Area 7 at t he ti m e

th e Area 7 pro

ject was to be gi n. Th eref or e, In tra st at e d idno t co m pl y wit h i ts
co nt ractua l o bl ig at io n t o p ro vi de 10 0% b on d c ov erag e. Inli gh t o f th e fo reg oi ng , we nee d n otde ci de whet he r Hart fo rdwas l eg al ly bo un d b y Hum en ch ic k’s co ns en t l et te r an d t he refo re wro ng fu ll y di sa vo wedbo nd
co ve rag e fo r Area 7
. The fa ctrem ai ns th atInt ras ta te ag reedto ob ta in a 10 0% bo ndfro m

Hart fo rdor s om e o th er b on di ng co m pany anddi d n otob ta in on e. Thu s, re ga rd le ss of wh et he r Hum en ch ic k’s co ns en t l et te r actua ll y bo un d Har tfo rd to pro vi de co ve rag e fo r th e Area 7 pro ject ( ag ai n a n i ss ue th atwe ne edno t an d d o no t d eci de ), In tra st at e u lt im at el y fai le d t o p ro vi de a 10 0% b on d a s re qu ire d b y In tra st at e’s un de rlyin g c on stru ct io n c on tra ctwit h M arat ho n. In tra st at e’s fai lu re t o o bt ai n 1 00 % bo ndco ve rag e fo r th e in crea se d c on tra ct pr ic e res ul ti ng fro m

th e Area 7 Ch an ge Orde r co ns ti tu te d abre ach of t he pa rti es ’ si ng le co nt ract , pro vi di ng Mara th on with s uf fic ie ntcau se to term in at e In tra st at e fro m bo th th e Area 3 an d Are a 7 pro jects
. Becaus e Ma rat ho n t erm in at ed 3 In tra st at e fo r cau se , Hartf or d re m ai ne d o bl ig at edon it s p erfo rm an ce b on d fo r Area 3
.

Intrastate did not file a

counter claim in the district court. Thus, for purposes of the 3 appea l in this case , Intrastate doe s not dispute that Marathon ter minated it for ca

use. 22 Case: 11-16041 Date Filed: 12/17/2012 Page: 22 of 24W e rec og ni ze t ha t Hartfo rdals o c on te nd s t ha t i ts refu sa l t o b on d Are a 7 was

no t a p ro pe r rea so n fo r th e te rm in at io n, g iv en th atMara th on co ul d n otrequi re In tra st at e to ob ta in a bo ndsp eci fic al ly from Hart fo rdun de r Fl or id a la w. Howev er, th is arg um en t l ack s m eri t. Fi rs t, i t i s t ru e th atMara th on ’s Aug us t 6 , 20 10 Not ic e o f Defau ltan d Term in at io n i nd ic at es th atMara th on term in at edInt ras ta te be cau se Hart fo rd refu se d t o re tra ctit s J un e 3 0 l et te r di sa vo win g t he Area 7 bo nd . Yet Hart fo rd ’s si ng ul ar fo cu s o n t he let te r ig no res th atth e u nd erl y in g re as on why Hart fo rd ’s Ju ne 30 let te r cau se d M arat ho n t o t erm in at e In tra st at e was be cau se (1) th e Ju ne 30 let te r wit hd rew Hart fo rd ’s con se ntto pro vi de bo ndco ve rag e fo r Area 7 , and(2) in tu rn , Hart fo rd ’s wit hd rawal of c on se ntm ean t t ha t In tra st at e was no w in bre ach of i ts
co nt ractua l o bl ig at io n t o p ro vi de a pe rfo rm an ce b on d c ov eri ng 10 0% o f th e co ns tru ct io n c on tra ctforth e Area 3 an d Are a 7 pro jects . Furt he rm or e, no th in g i n th e rec or d i nd ic at es th atMara th on pre ve nt edInt ras ta te fro m ob ta in in g abo nd el se whe re af

te r Hart fo rddi sa vo wedbo ndco ve rag e o n t he Area 7 pro ject. In fact , m or e th an a m on th pa ss edbe twee n Har tfo rd ’s Ju ne 30 di sa vo wal andMara th on ’s Aug us t 6 Not ic e o f Defau ltan d Term in at io n. In t he in te rim, Int ras ta te st il l 4

Whether Intrastate ha s a viable c laim or not ag ainst Hartf ord for retra cting 4 Humenchic k’s conse nt to bond Area 7 is not part of this lawsuit.

23 Case: 11-16041 Date Filed: 12/17/2012 Page: 23 of 24pr ov id edno bo ndfor10 0% c ov erag e.

Bec au se Mara th on term in at edInt ras ta te forcau se , i.e., In tra st at e’s fai lu re t o se cu re a 1 00 % pe rfo rm an ce b on d fo r th e to ta l p ric e o f th e u nd erl y in g c on st ru ct io n co nt ract(whi ch in cl ud edth e in crea se d a m ou ntforth e Area 7 pro ject) , Hartf

or d
was bo un d t o t ak e o ve r or pa y th e co st s o f co m

pl et in g the Area 3 pro

ject, as di ct at edby the term s o f th e co ns tru ct io n c on tra ctth atwas i nc or po rat edin to Hart fo rd ’s Area 3 pe rfo rm an ce b on d. Itis un di sp ut edth atHart fo rdfai le d t o t ak e ov er o r pa y

th e co st s o f co m

pl et in g t he Area 3 pro

ject, an d t ha t M arat ho n s uf fere d lo ss es on th e p ro

ject. Hart fo rdag reedto bo ndth e Area 3 pro ject andne ve r di sa vo wedth e Area 3 bo nd . Never th el es s, i t fa il edto pe rfo rm on th atbo nd . On ap pe al , asi de fro m

Mara th on ’s pu rp orte dl y

im pr op er t erm in at io n o f In tra st at e, Hart fo rdoff

ers no ot he r de fen se to it s fa il ur e to co m pl et e th e Area 3 pro

ject. Acco rd in gl y , we rev ers e th e d is tri ctco urt’s g ran t o f su m m ary jud gm en t t o Hart fo rdon Mara th on ’s cou nt ercl ai m an d v acat e it s d en ia l o f Mar at ho n’s
su m m ary jud gm en t m ot io n. We rem an d t he co un te rcl ai m to th e d is tri ctco urt fo r reco ns id erat io n o f Mar at ho n’s m ot io n fo r pa rti al su m m ary jud gm en t. REVERSED i n pa rt, VACATED in pa rt, a nd REMANDED.

24 Case: 11-16041 Date Filed: 12/17/2012 Page: 24 of 24