Opinion ID: 1141693
Heading Depth: 1
Heading Rank: 2

Heading: United Bonding's Appeal

Text: Castle's complaint alleged that United Bonding had issued a bond on behalf of Stewart & Fritz, Inc.    in connection with a contract with the State of Alaska   . This allegation was admitted by United Bonding in its answer to the complaint. In addition, the complaint alleged that pursuant to statute Stewart & Fritz, as principal, and United Bonding, as surety, had delivered to [the] State the Performance and Payment bonds, conditioned as required by    statute. This allegation was denied in United Bonding's answer to the complaint on the ground that United Bonding lacked knowledge or information sufficient to form a belief as to the truth of such allegation. At the close of Castle's evidence, United Bonding's counsel said, We move for judgment at this time. No reasons were stated. The court denied the motion. At the close of all the evidence, counsel moved for dismissal as to United    on the basis that this liability is based upon a bond and the bond has not been put into evidence, there's no testimony on the bond.    The court stated: I'm going to submit the case to the jury   I'm going to order the bond to be filed.    After the jury had returned its verdict against Stewart & Fritz and United Bonding, the court reopened the case to permit the introduction in evidence of the original payment bond which had been in the possession of the state. United Bonding's motion for judgment notwithstanding the verdict was denied. On this appeal United Bonding contends that Castle failed to introduce any evidence as to the execution, delivery and acceptance of the payment bond, and therefore by the time the case went to the jury there had been presented nothing in the way of evidence from which the jury could find that United Bonding was obligated to Castle as a surety of Stewart & Fritz. For this reason United Bonding contends that the court erred in refusing to grant judgment in its favor. In addition, United Bonding argues that the court, in permitting the introduction in evidence of the bond after the jury had rendered its verdict, denied United Bonding a jury trial on the issues of execution, delivery and acceptance of the bond. In interrogatories propounded to United Bonding by Castle this question was asked: 2. Did you furnish a payment bond for State of Alaska    said bond having been executed on February 12, 1965 and signed by Francis Sprague, attorney in fact, and attested by Mary Miller? The answer of United Bonding was yes. This constituted an admission by United Bonding that a payment bond had been executed and delivered to the state on the project involved in this action. The pre-trial order provided in part: The bonding company, United Bonding Insurance, has claimed for indemnification from the prime contractor and it has been stipulated between the bonding company and the prime contractor that any judgment recovered by the plaintiff against the bonding company may be recovered against the prime contractor. If there were to be indemnification from Stewart & Fritz to United Bonding on any judgment found against the latter, this implies that there was a principal-surety relationship between the parties, which in turn leads to the conclusion that a payment bond was in effect. In addition, no mention was made in the pre-trial order that execution or delivery or acceptance of the bond was in issue. The purpose of pre-trial is to clearly define all issues to be tried and decided  hidden issues or defenses are not to be tolerated. [4] Issues not presented at pre-trial may not be later raised at the trial. [5] United Bonding was precluded from raising an issue as to the execution or delivery or acceptance of the payment bond in question by reason of its failure to raise the issue at pre-trial proceedings. There is yet another reason why it was unnecessary for Castle to prove by direct evidence the existence of the payment bond. AS 36.25.010(a) requires that before a state contract may be awarded, the contractor must furnish to the state a payment and performance bond. [6] The evidence shows that the state made progress payments to Stewart & Fritz, the prime contractor. Since under the statute just mentioned the awarding of the contract, and necessarily the making of payments under the contract, is conditioned upon the furnishing of a payment and performance bond, it may be concluded from the fact that payments were made under the contract that the required bond had been furnished the state. Such a conclusion is based upon the presumption that official duty has been regularly performed [7]  that state officials would not have awarded the contract and made progress payments to Stewart & Fritz had the required bond not been filed. There was a sufficient basis for the jury to find that United Bonding was obligated to Castle as surety on a payment bond without the necessity of Castle introducing the bond in evidence. Hence, United Bonding was not denied a jury trial on the issue of the execution, delivery and acceptance of the bond, and the trial court did not err in refusing to grant judgment for United Bonding. The judgment is affirmed.