Court Opinion

ID: 6760125
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:30:35.913314+00
Date Added: 2024-06-11T16:02:34.632499
License: Public Domain

Douglas, J.,
dissenting. I respectfully dissent from the position of the majority. Appellant contends that the bond issued herein neither contemplated at its inception nor includes in its language the obligation to pay the statutorily mandated penalty amounts. I do not agree.
This court in St. Paul Fire & Marine Ins. Co. v. Indus. Comm. (1987), 30 Ohio St. 3d 17, 20, 30 OBR 24, 26, 506 N.E. 2d 202, 204, stated that “ ‘A surety is primarily and jointly liable with the principal debtor. His obligation is created concurrently with that of the principal debtor.’ * * *” (Citation omitted.) When an employer incurs certain obligations to its employees, as here the payments due the employees pursuant to R.C. 4115.10, during the term of the bond, its surety must assume those obligations pursuant to the language of the bond. Id. Accordingly, if the language of the bond purports to make appellant liable for the penalty amounts, appellant will be required to pay appellees these amounts due pursuant to R.C. 4115.10.
In the case now before us, the bond provides, in part, that “[t]he * * * Principal and Surely hereby jointly and severally agree with the Owner that every claimant, as herein defined, who has not been paid in full before the expiration of a period of ninety (90) days after the date on which the last of such claimant’s work or labor was done or performed, or materials were furnished by such claimant, may sue on this bond for the use of such claimant, prosecute the suit to final judgment for such sum or sums as may be justly due [the] claimant, and have execution thereon. * * *” (Emphasis added.) Thus, the bond expressly provides for suit and execution by appellees for all amounts justly due them for labor related to the hospital construction. Further, the bond provides that the principal and surety are jointly and severally liable for those amounts due each claimant. Herein, full payment includes payment of the statutorily mandated penalty amounts. Since the principal did not pay these amounts, the surety, pursuant to both the bond and St. Paul Fire & Marine Ins. Co. v. Indus. Comm., supra, must do so.
Moreover, appellant stipulated that the bond was to protect against and pay for all indebtedness accruing as a result of any labor performed at the hospital. Appellant’s stipulation provides in part that, “[a]t the time said contract was let for bid * * * the contractor was bound by the terms thereof to secure his performance by sufficient bond * * * and conditioned for the payment * * * of all indebtedness which may accrue to any person *208on account of any labor performed or furnished in the construction * * (Emphasis added.) This language does not exclude the payments to be made pursuant to R.C. 4115.10. Further, these payments accrued as a direct result of appellees’ labor on the hospital construction project. Accordingly, appellant is, pursuant to the stipulation, liable to pay the penalty amounts due pursuant to R.C. 4115.10.
Therefore, given the statements of this court, the language of the bond and the language of the stipulation entered into by the parties, appellant is liable to pay the mandated penalty amounts to appellees. To hold otherwise contorts the language of the bond and the stipulation and flies in the face of the intent of R.C. 4115.10. Accordingly, I would affirm the judgment of the court of appeals.
Sweeney and H. Brown, JJ., concur in the foregoing dissenting opinion.