Opinion ID: 203971
Heading Depth: 3
Heading Rank: 1

Heading: The USF & G lawsuit

Text: On June 21, 2006, USF & G sued Eastern in the United States District Court for the District of Massachusetts. [3] The complaint cited various provisions of the MSA, including the indemnification and collateral security clauses and a clause stating that the surety's rights to indemnification, exoneration, and subrogation could be enforced as provided by applicable law or, at option of [USF & G] ... in any other manner provided at law or in equity. The complaint alleged that, as a result of Eastern's default, USF & G had already received approximately $4,329,919.92 in claims under several payment bonds, and that, based on its investigation, its exposure under the Algonquin performance bond could exceed $3.6 million. Taking these figures together, USF & G stated that [a]s a direct and proximate result of Eastern's defaults, USF & G has sustained, and anticipates further sustaining, losses in the form of costs to complete the Algonquin Project, and to resolve other bond claims, attorneys' fees, expenses, and interest, in an amount in excess of $7,929,919.92. USF & G's complaint asserted both contractual and common law rights. The former included a count for indemnity pursuant to the MSA, counts for specific performance of the MSA's indemnity and collateral security clauses, and a count for breach of contract. The latter were counts for common law indemnity and the equitable remedy of quia timet/exoneration. [4]