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Sharply-Divided Washington Supreme Court Holds That Sureties, Like Insurers, Must Pay Attorney Fees to Prevailing Parties When They Wrongfully Deny Coverage

King Cnty. v. Vinci Constr. Grands Projets/Parsons RCI/ Frontier-Kemper, JV, No. 92744-8, 2017 Wash. LEXIS 743 (July 6, 2017)

Author: Jane Fox Lehman

9/07/2017

Read the full post at Constructlaw

Sharply-Divided Washington Supreme Court Holds That Sureties, Like Insurers, Must Pay Attorney Fees to Prevailing Parties When They Wrongfully Deny Coverage

King County contracted with three construction firms (collectively, VPFK) to construct a tunnel. The contract required substantial completion by November 14, 2010 (the contract time). It also required VPFK to secure a performance bond from five surety companies, under which the sureties were to remedy any default in VPFK’s performance.

VPFK experienced difficulties with its tunnel-boring equipment and was unable to dig nearly as fast as estimated. When it became clear that VPFK would not achieve substantial completion by the contract time, King County declared VPFK in default. The sureties refused King County’s request for a cure, arguing that because the contract time had not passed, no default had yet occurred.