Present: All the Justices 

AMERICAN SAFETY CASUALTY 

INSURANCE COMPANY 

v. Record No. 032709 OPINION BY JUSTICE CYNTHIA D. KINSER 

 September 17, 2004 

C.G. MITCHELL CONSTRUCTION, 

INC., ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 

Melvin R. Hughes, Jr., Judge 

 In this action for breach of contract and recovery on 

a payment bond, the primary issue is whether the circuit 

court erred by entering judgment against a surety in favor 

of a claimant under the payment bond after determining that 

a judgment by default previously entered by the court 

against the principal as a sanction for failing to obey an 

order regarding discovery was binding on the surety. 

Because the surety had notice of the claim against its 

principal, and the right and opportunity to defend the 

principal against the claim, we conclude that the judgment 

by default against the principal was binding on and 

conclusive as to the surety. Thus, we will affirm the 

circuit court’s judgment. 

RELEVANT FACTS AND PROCEEDINGS 

 C.G. Mitchell Construction, Inc. (“Mitchell”) entered 

into an agreement with Nations Environmental Services, Inc. 

(“Nations”) to provide labor, equipment and debris removal 
2

services in connection with the demolition of the Richmond 

Convention Center Exhibition Hall (the “Project”) in the 

City of Richmond. Nations was a subcontractor on the 

Project and was required, pursuant to its contract with the 

prime contractor, to procure a “Labor and Material Payment 

Bond” (the “Bond”).1

 Nations obtained the Bond from 

American Safety Casualty Insurance Company (“American 

Safety”). The Bond named the prime contractor as the 

“Obligee,” and Mitchell was a “Claimant” as that term was 

defined in the Bond.2

 Nations along with Janet C. Williams and Chijioke Ude, 

president and vice-president, respectively, of Nations, 

also entered into a “General Agreement of Indemnity” (the 

 1

 Requiring a payment bond by Nations, as a 

subcontractor, is authorized in Code § 2.2-4337(F). The 

purpose of Code § 2.2-4337 is to protect those who furnish 

supplies, materials, and labor for the construction of 

public improvements, irrespective of whether those items 

were furnished to the prime contractor or a subcontractor. 

See Solite Masonry Units Corp. v. Piland Constr. Co., 217 

Va. 727, 730, 232 S.E.2d 759, 761 (1977) (decided under a 

predecessor to Code § 2.2-4337); Thomas Somerville Co. v. 

Broyhill, 200 Va. 358, 363, 105 S.E.2d 824, 828 (1958) 

(same). 

2

 In pertinent part, the Bond defined the term 

“Claimant . . . as one having a direct contract with the 

Principal or with a subcontractor of the Principal for 

labor, material, or both, used or reasonably required for 

use in the performance” of the subcontract between Nations 

and the prime contractor. 
3

“Indemnity Agreement”) with American Safety.3 As pertinent 

to the issues on appeal, the Indemnity Agreement included 

the following provisions with regard to the rights granted 

to American Safety: 

ASSIGNMENT. A. The CONTRACTOR [Nations], and the 

INDEMNITORS [Williams and Ude] as their interests may 

appear in the following subsections of this paragraph, 

hereby assign, transfer, pledge and set over to SURETY 

[American Safety] . . . (i) All the rights of the 

CONTRACTOR or INDEMNITORS in, and arising in any 

manner out of any CONTRACT; . . . (iv) All the right, 

title and interest of the CONTRACTOR or INDEMNITORS in 

and to any actions, causes of action, claims or 

demands . . . arising out of or in connection with any 

CONTRACT . . . . B. SURETY shall have the full and 

exclusive right (but not the obligation), in its name 

or in the name of the CONTRACTOR or INDEMNITORS, to 

prosecute, compromise, release or otherwise resolve 

any of the claims, causes of action or other rights 

assigned to SURETY, upon such terms as SURETY, in its 

sole discretion shall deem appropriate. C. The 

CONTRACTOR and INDEMNITORS hereby irrevocably 

nominate, constitute, appoint and designate the SURETY 

. . . as their attorney-in-fact with the right, but 

not the obligation, to exercise all of the rights of 

the CONTRACTOR and INDEMNITORS assigned, transferred 

and set over to SURETY in this Agreement, and in the 

name of the CONTRACTOR and INDEMNITORS to make, 

execute, and deliver any and all additional or other 

assignments, documents, papers, . . . or other 

instruments . . . deemed necessary and proper by the 

SURETY in order to give . . . the full protection 

intended to be herein given to the SURETY under all 

other provisions of this Agreement. The CONTRACTOR 

and INDEMNITORS hereby ratify and confirm all acts and 

actions taken and done by SURETY . . . as such 

attorney-in-fact. 

. . . . 

 3

 Williams and Ude executed the Indemnity Agreement as 

individual indemnitors. 
4

REMEDIES UPON DEFAULT. A. In the event of any 

EVENT OF DEFAULT as described in this Agreement, 

SURETY shall have the right, at its option, and in its 

sole and absolute discretion . . . to take any one or 

more of the following actions: . . . (vii) in its name 

or in the name of the CONTRACTOR or Indemnitors to 

adjust, settle or compromise any . . . suit or 

judgment involving any BOND or to take whatever other 

action it may deem necessary . . . with respect to 

such matter. SURETY’S determination as to whether any 

such . . . suit . . . should be settled or defended 

shall be binding and conclusive upon the CONTRACTOR 

and INDEMNITORS. 

Pursuant to its contract, Mitchell was to supply 

Nations with daily tickets outlining the work performed and 

Nations was to compensate Mitchell for its work on a “time 

and materials” basis. Mitchell would periodically invoice 

Nations based upon the totals from the daily tickets. 

According to Mitchell, Nations breached the contract by 

refusing to pay Mitchell the sums due on the invoices. 

 Consequently, Mitchell filed a motion for judgment 

against both Nations and American Safety. Mitchell alleged 

that Nations had breached the contract between them and was 

indebted to it for the sum of $312,500.09, plus interest.4

 

Mitchell also alleged that American Safety was obligated to 

make payment to Mitchell under the Bond for all labor, 

material, and equipment it had supplied to Nations on the 

 4

 Along with the motion for judgment, Mitchell filed a 

statement of account and affidavit verifying the amount 

owed to it by Nations in accordance with Code § 8.01-28. 
5

Project. Nations and American Safety each filed grounds of 

defense, denying any indebtedness to Mitchell.5

More than a year after Mitchell filed its action, 

Nations’ attorney moved to withdraw as counsel of record 

for Nations. The circuit court granted the motion. No 

attorney has since entered an appearance on behalf of 

Nations. Nations’ registered agent also resigned, and the 

State Corporation Commission terminated Nations’ corporate 

status in December 2002. 

Pursuant to Rule 4:5(b)(6), Mitchell subsequently gave 

notice that it would take the deposition of a corporate 

designee of Nations. However, no corporate designee from 

Nations appeared at the scheduled deposition even though 

Mitchell effected proper service. Consequently, Mitchell 

filed a motion for sanctions and/or to compel a corporate 

designee of Nations to appear for a deposition. At a 

hearing on the motion, the circuit court learned that 

Williams and Ude had resigned as officers and directors of 

Nations. American Safety suggested to the court that, 

since Williams and Ude were the only persons with knowledge 

of the matters set out in the deposition notice, Mitchell 

could obtain the needed information by issuing subpoenas to 

 5

 American Safety also filed a cross-claim against 

Nations and a third-party motion for judgment against 

Williams and Ude. 
6

Williams and Ude in their individual capacities and 

deposing them about their personal knowledge. The circuit 

court granted Mitchell’s motion and directed a corporate 

designee of Nations to appear for a Rule 4:5(b)(6) 

deposition. 

Mitchell subsequently gave notice that it would take 

the deposition of Nations’ corporate designee and effected 

proper service of the notice. Again, no corporate designee 

appeared for the scheduled deposition. Consequently, 

Mitchell moved for sanctions, including judgment by 

default, against Nations for its failure to comply with the 

circuit court’s prior order directing a corporate designee 

from Nations to appear for a deposition. 

At a hearing on the motion, American Safety again 

represented to the circuit court that a deposition of a 

corporate designee was not necessary because Williams and 

Ude could be deposed about their personal knowledge. 

American Safety also argued that judgment by default 

against Nations was not appropriate because, other than the 

affidavit attached to the motion for judgment, Mitchell had 

not presented evidence to prove its claimed damages against 

Nations and because genuine issues of material fact existed 

as to the amount that Nations owed Mitchell. 
7

The circuit court found that Nations violated the 

prior order when a corporate designee failed to appear at 

the Rule 4:5(b)(6) deposition after receiving proper 

notice. Thus, the circuit court granted Mitchell’s motion 

for sanctions. It entered judgment by default in favor of 

Mitchell against Nations in the amount of $312,500.09, plus 

interest and costs. 

Mitchell then filed a motion for summary judgment 

against American Safety. At a hearing on that motion, 

American Safety argued that the judgment by default should 

not be conclusive against it or even introduced into 

evidence because American Safety did not have the ability 

to make a corporate designee from Nations appear at a Rule 

4:5(b)(6) deposition. American Safety further argued that 

it had a right to present a defense to Mitchell’s claim. 

In a final order, the circuit court found that 

American Safety had notice of Mitchell’s claim against 

Nations and had the right and opportunity to defend 

Nations. Accordingly, the circuit court concluded that the 

judgment by default entered against Nations was binding and 

conclusive upon the surety, American Safety. Thus, the 

court granted Mitchell’s motion for summary judgment and 

entered judgment in favor of Mitchell against American 

Safety in the amount of $312,500.09, plus interest and 
8

costs, subject to offsets in the amount of $57,110.86 for 

claims against the Bond by subcontractors and vendors to 

Mitchell that American Safety had already resolved. This 

appeal followed. 

ANALYSIS 

On appeal, American Safety challenges the circuit 

court’s actions granting Mitchell’s motion to compel the 

deposition of a corporate designee of Nations, granting 

Mitchell’s motion for sanctions and judgment by default 

against Nations, and entering summary judgment against 

American Safety. On brief, American Safety describes the 

primary issue as whether the circuit court could use “a 

default judgment imposed as a discovery sanction against a 

defunct corporation, without more, to impose” liability 

upon a surety. American Safety’s framing of the issue, 

however, omits two unchallenged findings by the circuit 

court: (1) American Safety had notice of Mitchell’s claim 

against Nations; and (2) American Safety had both the right 

and opportunity to defend Nations. Thus, the issue, 

properly stated, is whether the judgment by default entered 

against Nations is binding on American Safety when American 

Safety, as the surety, had notice of the claim against its 

principal, Nations, and the right and opportunity to defend 

Nations. 
9

Under the terms of the Indemnity Agreement, Nations 

assigned to American Safety its right and interest in any 

cause of action or claim arising out of or in connection 

with any contract.6

 Nations also appointed American Safety 

as its “attorney-in-fact with the right, but not the 

obligation, to exercise all of the rights” of Nations 

assigned to American Safety and “in the name of [Nations] 

to make, execute, and deliver any and all additional or 

other assignments, documents, papers, . . . deemed 

necessary and proper by [American Safety] in order to give 

. . . the full protection intended to be herein given to 

[American Safety].” Finally, under the Indemnity 

Agreement, American Safety had the right, upon any default, 

to take action in its name or in Nations’ name “to adjust, 

settle or compromise any . . . suit or judgment involving 

any BOND or to take whatever other action it may deem 

necessary . . . with respect to such matter.” As the 

circuit court found, these provisions in the Indemnity 

Agreement provided American Safety with the right to take 

any measures it deemed necessary and proper in order to 

defend Nations in the action brought by Mitchell. 

 6

 The Indemnity Agreement defines the term “CONTRACT” 

as “an agreement between CONTRACTOR and a third party . . . 

for which SURETY executes . . . a BOND.” Nations’ 

subcontract with Mitchell is a “CONTRACT” under the 

Indemnity Agreement. 
10

Despite this authority and the fact that American 

Safety, as a defendant in the action brought by Mitchell, 

had notice of Mitchell’s claim against Nations, American 

Safety never designated or even attempted to designate a 

corporate representative on behalf of Nations. In other 

words, it did nothing on Nations’ behalf to comply with the 

circuit court order directing a corporate designee to 

appear at a Rule 4:5(b)(6) deposition. Nor did American 

Safety argue that it did not have the authority under the 

Indemnity Agreement to do so. In fact, American Safety did 

not make that argument until the hearing on Mitchell’s 

motion for summary judgment, which was after the circuit 

court had entered judgment by default against Nations. 

However, American Safety appeared at the hearing on 

Mitchell’s motion to compel the appearance of Nations’ 

corporate designee at a deposition as well as the hearing 

on Mitchell’s motion for sanctions. 

Nevertheless, American Safety argues that the circuit 

court erred by treating the judgment by default conclusive 

as to American Safety’s liability on the Bond and thereby 

preventing American Safety from contesting the amount of 

damages claimed by Mitchell. Relying on this Court’s 

decisions in Munford v. Overseers of the Poor of Nottoway, 

23 Va. (2 Rand.) 313 (1824); Hobson v. Yancey, 43 Va. (2 
11

Gratt.) 73 (1845); and United States Fid. & Guar. Co. v. 

Jordan, 107 Va. 347, 58 S.E. 567 (1907), American Safety 

asserts that “a final judgment, entered after a trial on 

the merits against a principal, has served under Virginia 

law as no more than ‘prima facie evidence’ against a 

surety.” We are not persuaded by American Safety’s 

argument. 

In Munford, a jury found that Munford had been 

appointed and qualified as sheriff but had not been 

appointed by the Overseers of the Poor to collect the poorrates, unless a judgment previously entered against him as 

collector was conclusive evidence of that fact. 23 Va. at 

315. The issue was whether that prior judgment against 

Munford “precluded and estopped the sureties from giving 

any evidence going to contradict” Munford’s appointment. 

Id. In holding that the judgment against Munford was not 

conclusive evidence against the sureties as to the fact of 

his appointment to collect the poor-rates, the Court stated 

that it would be improper to hold “the sureties 

conclusively bound by a judgment against the principal, 

which they had no opportunity to resist or impeach.” Id.

at 320. 

In Hobson, the children and legatees of a decedent 

obtained a decree against the executor of the estate. 43 
12

Va. at 75. Execution was issued on the decree and returned 

“nulla bona.” Id. The parties in whose favor the decree 

had been rendered then instituted a suit against the 

sureties of the executor to recover the amount due under 

the decree. Id. The sureties argued that they were not 

responsible for certain rents from real estate that had 

been charged to the executor in the prior decree. Id. at 

77. This Court concluded that the trial court had not 

properly inquired into the credits that the executor was 

entitled to receive and therefore remanded the suit for 

further proceedings. Id. at 80. There, as in Munford, 

there was no indication that the sureties had any notice of 

or the opportunity to defend the executor in the first 

proceeding brought only against the executor. 

Finally, in Jordan, the trial court decided that a 

settlement by a treasurer for moneys due the county was 

conclusive proof against the treasurer’s surety. 107 Va. 

at 352, 58 S.E. at 567. On appeal, this Court reversed, 

holding that the treasurer’s settlement with the county was 

“not conclusive, but only prima facie evidence of the 

balance in his hands.” Id. at 356-57, 58 S.E. at 569. 

Treating the settlement as having no higher dignity than a 

judgment, we explained that judgments generally bind only 

parties and privies and are “not conclusive upon other 
13

persons, because it would be unjust to bind one by a 

proceeding in which he had no opportunity to make defense, 

and in which he could not appeal if dissatisfied with the 

judgment rendered therein.” Id. at 355, 58 S.E. at 568. 

The general rule, however, is subject to exceptions such as 

in “cases of contracts of indemnity, or in the nature of 

contracts of indemnity, or in those cases in which a 

person, although not in form a party to the suit, is bound 

to assist in the prosecution or defense, and either does so 

in fact, or, when called upon to prosecute or defend, as 

the case may be, fails to do so.” Id. at 356, 58 S.E. at 

569. The bond at issue in Jordan was not a bond of 

indemnity, and as in Munford and Hobson, the surety had no 

opportunity to participate in or defend the treasurer in 

the settlement of funds due the county. 

Unlike American Safety, none of the sureties in those 

cases had notice of the claim against its principal and 

both the right and opportunity to defend the principal 

against the claim. Thus, Munford, Hobson, and Jordan are 

inapposite. They are not controlling or persuasive 

authority on the issue before us. 

However, we do find the decision in Drill South, Inc. 

v. International Fid. Ins. Co., 234 F.3d 1232 (11th Cir. 

2000), both persuasive and apposite. That case involved an 
14

action on a payment bond in a federal construction project. 

Id. at 1234. In response to a motion for default judgment 

against the principal, the surety “stated that it took no 

position on a default judgment against its principal . . . 

provided that the default judgment was not deemed binding 

on [the surety].” Id. After the trial court entered 

default judgment against the principal, the court concluded 

that the surety was bound by that judgment. Id. at 1235. 

On appeal, the surety argued that “default judgments 

against a bond principal are not binding on a co-defendant 

surety actively defending in the same action.” Id. The 

court disagreed, explaining “the general rule that has 

emerged is that a surety is bound by any judgment against 

its principal, default or otherwise, when the surety had 

full knowledge of the action against the principal and an 

opportunity to defend.” Id.; accord Frederick v. United 

States, 386 F.2d 481, 485 n.6 (5th Cir. 1967); Lake County 

v. Massachusetts Bonding & Ins. Co., 75 F.2d 6, 8 (5th 

1935); Massachusetts Bonding & Ins. Co. v. Central Finance 

Corp., 237 P.2d 1079, 1081 (Colo. 1951); Von Engineering 

Co. v. R.W. Roberts Constr. Co., 457 So.2d 1080, 1082 (Fla. 

Dist. Ct. App. 1984); First Mobile Home Corp. v. Little, 

298 So.2d 676, 682-83 (Miss. 1974); contra United States ex 

rel. Fidelity Nat’l Bank v. Rundle, 107 F. 227, 229 (9th 
15

Cir. 1901); United States ex rel. Vigilanti v. PfeifferNeumeyer Constr. Corp., 25 F. Supp. 403, 405 (E.D.N.Y. 

1938); Gearhart v. Pierce Enters., Inc., 779 P.2d 93, 95 

(Nev. 1989). 

Applying that rule, the court in Drill South found 

that the surety had full knowledge of the potential default 

judgment against its principal and numerous opportunities 

to defend the principal against the merits of the claim and 

the extent of liability. 234 F.3d at 1235-36. The court 

further found that the surety had the legal right to step 

in and defend its principal at every stage of the 

proceedings pursuant to an indemnity agreement with its 

principal. Id. at 1236. Under that agreement, the 

principal had designated the surety as its “attorney-infact,” which gave the surety the “ ‘right to adjust, 

settle, or compromise any claim, demand, suit or judgment 

upon the [payment bond].’ ” Id. Thus, the court affirmed 

the judgment against the surety. Id. at 1240. In doing 

so, the court rejected the surety’s argument that it was 

not obligated to defend the action against its principal. 

Id. at 1236. The issue, according to the court, was not 

whether the surety had an obligation to defend under the 

terms of the indemnity agreement but whether it had the 

right to do so. Id.
16

Turning to the present case, we conclude that American 

Safety is bound by the judgment by default entered against 

Nations. Like the surety in Drill South, American Safety 

had notice of Mitchell’s claim against Nations and the 

opportunity to defend Nations. It also clearly had the 

right to do so under the terms of the Indemnity Agreement. 

In our view, it does not matter that the judgment by 

default was entered as a discovery sanction or that the 

circuit court accepted Mitchell’s affidavit as evidence of 

the amount of Nations’ indebtedness. “The law requires 

only that a surety have notice and an opportunity to defend 

before it is bound by a judgment against its principal.” 

Id. Thus, the circuit court did not err in granting 

Mitchell’s motion for summary judgment and entering 

judgment against American Safety. 

American Safety also challenges the circuit court’s 

order directing a corporate designee of Nations to appear 

at a deposition and the order entering judgment by default 

against Nations as a discovery sanction. In both 

instances, the circuit court was dealing with discovery 

issues and abuses. A trial court generally exercises 

“broad discretion” in resolving such matters. Woodbury v. 

Courtney, 239 Va. 651, 654, 391 S.E.2d 293, 295 (1990). On 

appeal, we accord deference to a trial court’s decision 
17

regarding discovery disputes and will set aside that 

decision only if the court abused its discretion. See

Walsh v. Bennett, 260 Va. 171, 175, 530 S.E.2d 904, 907 

(2000). Here, we cannot say that the circuit court abused 

its discretion in entering either of those orders. 

As to the order requiring a corporate designee of 

Nations to appear at a deposition, American Safety argues 

that the circuit court abused its discretion in compelling 

an act by a defunct corporation when Mitchell could have 

obtained the information it needed by deposing Williams and 

Ude in their individual capacities. However, the 

termination of Nations’ corporate status did not impair 

Mitchell’s remedy against Nations. Under Code § 13.1-755, 

“[t]he termination of corporate existence shall not take 

away or impair any remedy available to or against the 

corporation, its directors, officers or shareholders, for 

any right or claim existing or any liability incurred, 

prior to such termination.” This statutory provision, 

which partially changed the common law, see Harris v. T.I., 

Inc., 243 Va. 63, 68, 413 S.E.2d 605, 608 (1992), further 

provides that “[a]ny such action . . . by or against the 

corporation may be prosecuted or defended by the 

corporation in its corporate name,” and “[t]he 

shareholders, directors and officers shall have power to 
18

take such corporate or other action as shall be appropriate 

to protect such remedy, right or claim.” Code § 13.1-755. 

In addition, upon the involuntary termination of a 

corporation’s existence, “the properties and affairs of the 

corporation shall pass automatically to its directors as 

trustees in liquidation.” Code § 13.1-753; see also Code 

§ 13.1-752. Given these statutory provisions, the circuit 

court did not abuse its discretion by compelling Nations to 

designate a corporate representative to appear at a Rule 

4:5(b)(6) deposition. 

 Contrary to American Safety’s argument, deposing 

Williams and Ude in their individual capacities would not 

have had the same legal effect as deposing one or both of 

them as Nations’ corporate designee. In accord with Rule 

4:5(b)(6), Mitchell “designate[d] with reasonable 

particularity the matters on which examination [was] 

requested” in its notice of deposition. Nations was then 

required to designate one or more officers or other persons 

to testify on its behalf, and it could have set forth the 

matters on which each designated person would testify. Id. 

The person designated by a corporation to testify on its 

behalf must “testify as to matters known or reasonably 

available to the organization.” Id. Thus, the designated 

person gives testimony about the knowledge and memory of 
19

the corporation, not his or her personal knowledge. See

United States v. Taylor, 166 F.R.D. 356, 361 (M.D.N.C. 

1996) (decided under F.R.C.P 30(b)(6), which is in all 

pertinent respects identical to Rule 4:5(b)(6)); accord The 

Paul Revere Life Ins. Co. v. Jafari, 206 F.R.D. 126, 127 

(D. Md. 2002)(same); see also Black Horse Lane Assoc., L.P. 

v. Dow Chemical Corp., 228 F.3d 275, 303 (3d Cir. 

2000)(same). 

 Finally, with regard to the circuit court’s order 

entering judgment by default against Nations as a discovery 

sanction, American Safety contends that, absent a showing 

of prejudice by Mitchell, the court’s choice of sanction 

was too severe. American Safety also contends that 

Mitchell seized upon Nations’ defunct status to give notice 

of a Rule 4:5(b)(6) deposition knowing that Nations could 

not designate someone to testify on its behalf at a 

deposition, thereby setting in motion events that allowed 

it to obtain the judgment against Nations without ever 

having to present evidence in a trial. However, one of the 

sanctions authorized under Rule 4:12(b)(2)(C) when a party 

fails to obey an order to provide discovery is “judgment by 

default against the disobedient party.” Mitchell sought 

through a Rule 4:5(b)(6) deposition to explore, among other 

things, the basis of Nations’ denials in its grounds of 
20

defense and its answers to interrogatories. Mitchell was 

deprived of that opportunity. Thus, we cannot say that the 

circuit court abused its discretion in choosing to enter 

judgment by default against the disobedient party, Nations. 

See Woodbury, 239 Va. at 654, 391 S.E.2d at 295 (trial 

court did not abuse its discretion in granting partial 

summary judgment for defendant when plaintiff failed to 

timely identify expert witnesses). Given the circumstances 

of this case, it is doubtful that any lesser sanction would 

have remedied the problem posed by Nations’ failure to obey 

the circuit court’s order compelling the appearance of its 

corporate designee at a deposition. 

We also point out that American Safety had notice of 

every step in the proceedings that led to the entry of 

those two orders. In fact, counsel for Mitchell wrote 

American Safety’s counsel in order to obtain available 

dates before scheduling both the first and the second 

deposition of Nations’ corporate designee. But, as 

previously stated, American Safety never attempted to 

designate a corporate representative to appear at a 

deposition on behalf of Nations. It was not until the 

hearing on Mitchell’s motion for summary judgment that 

American Safety even argued that it did not have the 
21

authority under the Indemnity Agreement to make that 

designation. 

CONCLUSION 

We hold that a surety is bound by a judgment by 

default entered against its principal when the surety had 

notice of the claim against the principal and the 

opportunity and right to defend the principal. Since 

American Safety was such a surety, we will affirm the 

judgment of the circuit court.7

Affirmed. 

 7

 In light of our decision, we do not consider American 

Safety’s argument concerning collateral estoppel because 

that principle was not the basis of the circuit court’s 

decision to enter summary judgment against American Safety.