IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

KAREN WELDIN STEWART, CIR-MI, )

INSURANCE COMMISSIONER OF THE )

STATE OF DELAWARE, )

)

Plaintiff, )

)

v. ) CIVIL ACTION NO. 12-0532-KD-B

)

CONTINENTAL CASUALTY )

COMPANY, )

)

Defendant and )

Counterclaim Plaintiff, )

)

v. )

)

COLTIN ELECTRIC, INC., )

)

Counterclaim Defendant. )

ORDER

This action is before the Court on the motion for partial summary judgment filed by 

defendant Continental Casualty Company (Continental) and documents in support (doc. 135), the 

response in opposition filed by plaintiff Karen Weldin Stewart, CIR-MI, Insurance 

Commissioner of the State of Delaware (the Commissioner) (docs. 137, 138) Continental’s reply 

(doc. 146), the supplemental brief filed by Continental (doc. 171) and the supplemental brief 

filed by the Commissioner (doc. 176). Upon consideration and for the reasons set forth herein 

the motion is GRANTED as follows:

The issue before the Court is whether Coltin Electric, Inc. (Coltin) released its claims for 

additional compensation for work performed prior to March 1, 2011. The facts were previously 

set forth in detail in the Court’s June 25, 2014, order on Continental Casualty Company’s 

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(Continental) motion for partial summary judgment. (Doc. 169) In sum, Elkins Constructors, 

Inc., (Elkins) required Coltin to release any liens and claims against the project funds and project 

bonds in return for monthly progress payments. The requirement for this release was pursuant to 

the Subcontract Agreement between Elkins and Coltin. Specifically the subcontract provides: 

SUBCONTRACTOR shall provide, in a form satisfactory to CONTRACTOR, partial lien or 

claim waivers.... Such waivers shall be a strict condition precedent to payment.” (Doc. 1-2, p. 

5, ¶10.7) 

 Prior to February 28, 2011, Coltin submitted six payment applications along with four

releases. Both the payment applications and releases were on forms provided by Elkins to 

Coltin. Elkins issued payments for the first five applications.

The seventh payment application and release were submitted for work completed through 

February 28, 2011. Again, the submissions were on the Elkins’ forms. However, prior to paying 

the sixth (January) and seventh (February) payment applications, Elkins re-sent two release 

forms for the January and February application. 

Instead of signing the Elkins release again, Coltin revised the release form and returned it 

for the sixth and seventh payment application. The altered release waived liens but did not 

waive Coltin’s right to claims against the project funds and project bonds. There is no evidence 

that Elkins was aware that Coltin had unilaterally altered the acceptable release. Rather, the 

evidence, in the form of emails between Coltin and its lawyer, indicates that the slight alteration 

was made in such a manner as to hopefully get it past Elkins without notice. The plan worked 

and Elkins paid the sixth and seventh payment applications. However, when Coltin sent the

altered release for the eighth payment, Elkins noticed the change and refused to issue payment 

since the release was not in a form acceptable to Elkins.

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There are no mitigating facts to support any finding other than the altered Coltin release 

is ineffective for lack of mutual assent by Elkins.1 The subcontract between Elkins and Coltin 

clearly states that the release will be in a form acceptable to Elkins. Elkins presented the 

acceptable release and indicated that Coltin needed to sign that release in order to receive 

payment. Coltin did not sign the acceptable release. Elkins paid the applications on the 

reasonable belief that Coltin had signed the release it sent. Coltin prompted this belief by 

submitting a form that appeared to be the one Elkins had sent. 

The Court finds distinguishable the line of cases that would hold Elkins responsible for 

the consequences of failing to read the altered release before making payment. Specifically, this 

is not a situation where Elkins signed a contract without reading its terms. Elkins authored the 

acceptable release, and pursuant to the subcontract, Coltin was required to sign that release in 

order to get the progress payment. Moreover, Coltin had signed the acceptable release on four 

previous occasions. Coltin’s altered releases for the sixth and seventh payments are ineffective 

since there is no evidence that Elkins consented to the alteration.

This leaves the February Hirmer release. As there was no valid amendment to this 

release (or novation), the release, according to its terms, became effective upon payment of the 

January and February 2011 payment applications. Accordingly, partial summary judgment is 

GRANTED for any claim for additional compensation for work completed before March 1, 

2011. 

DONE and ORDERED this the 13th day of July 2014.

/s/ Kristi K. DuBose

KRISTI K. DuBOSE

UNITED STATES DISTRICT JUDGE

 1 There are no facts to support Rodgers’ conclusory statement in his affidavit that Elkins rejected 

Hirmer’s February release because Elkins wanted Rodgers’ signature.

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