UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SCHUFF STEEL CO.,
Plaintiff,
v.
Civil Action No. 18-cv-435 (TSC)
BOSWORTH STEEL ERECTORS, INC., et
al.,
Defendants.
MEMORANDUM OPINION
Plaintiff Schuff Steel Co. (“Schuff”) sued its subcontractor Defendant Bosworth Steel
Erectors, Inc. (“Bosworth”) and surety Travelers Casualty and Surety Company of America
(“Travelers”) after Bosworth failed to complete its subcontract work and Schuff took over. In a
previous Opinion (ECF No. 79), the court denied summary judgment to both Schuff and
Bosworth regarding breach of the subcontract, but granted summary judgment to Travelers,
holding that Travelers did not breach the bond because Schuff failed to give it notice and an
opportunity to cure. Schuff Steel Co. v. Bosworth Steel Erectors, No. 18-cv-435, 2022 WL
4534729 (D.D.C. Sept. 28, 2022). Schuff and Bosworth have now cross moved for summary
judgment regarding whether Bosworth can be held liable for its failure to complete the
subcontract work under the surety bond.
Having considered the record and the parties’ briefs, the court will GRANT Schuff’s
Motion for Summary Judgment, ECF No. 82, and DENY Bosworth’s Cross Motion for
Summary Judgment, ECF No. 83. Bosworth was required to complete the subcontract work or
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face liability under the plain terms of the surety bond, and the parties do not dispute that
Bosworth failed to complete the subcontract work. Consequently, it is liable under the bond.
I. BACKGROUND
Schuff and Bosworth were two of the subcontractors that constructed the D.C. United
Soccer Stadium now known as Audi Field. Mem. Op., ECF No. 79 at 2. The general contractor
subcontracted steel work to Schuff, which further subcontracted with Bosworth. Id. The
subcontract required Bosworth to obtain a surety bond, which it executed with Travelers. Id.
at 3. The bond named Bosworth as principal, Travelers as surety, and Schuff as oblige. Id.
The Audi Field construction did not go as planned. After a problem with erecting the
scoreboard, Schuff notified Bosworth that it intended to terminate the subcontract due to default,
id. at 7, and notified Travelers, id. at 8. Schuff also filed this suit against Bosworth and
Travelers, seeking damages for breach of contract against Bosworth (Count I) and damages for
breach of the surety bond against Bosworth and Travelers, jointly and severally (Count II).
Compl., ECF No. 1 ¶¶ 28–40. Bosworth filed two counterclaims. First Am. Countercl., ECF
No. 19 ¶¶ 29–54. Following discovery, Schuff and Bosworth cross moved for summary
judgment on Count I and the counterclaims, ECF Nos. 57, 69, and Schuff and Travelers cross
moved for summary judgment on Count II, ECF Nos. 56, 67.
The court denied Bosworth’s and Schuff’s cross motions for summary judgment, finding
genuine issues of material fact regarding breach of the subcontract. Mem. Op. at 13–20. But the
court granted Travelers’ motion for summary judgment and denied Schuff’s cross motion on
Count II, concluding that Travelers did not breach the bond. Id. at 22. Because Schuff and
Bosworth did not move for summary judgment against each other on Count II, the court’s
opinion left unresolved Count II against Bosworth. Id. at 23. Schuff and Bosworth subsequently
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cross moved for summary judgment on Count II, regarding whether Bosworth is liable under the
bond. ECF Nos. 82, 83.
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 56, courts “shall grant summary judgment if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is material if “a dispute over it
might affect the outcome of a suit under governing law; factual disputes that are ‘irrelevant or
unnecessary’ do not affect the summary judgment determination.” Holcomb v. Powell, 433 F.3d
889, 895 (D.C. Cir. 2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
An issue is genuine if “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Id. (quoting Anderson, 477 U.S. at 248).
The party seeking summary judgment bears the initial burden to provide evidence
demonstrating “the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). “When parties file cross motions for summary judgment, each motion is
viewed separately, in the light most favorable to the non-moving party, with the court
determining, for each side, whether a judgment may be entered in accordance with the Rule 56
standard.” Howard Town Ctr. Dev., LLC v. Howard Univ., 267 F. Supp. 3d 229, 236 (D.D.C.
2017) (internal quotation omitted).
III. ANALYSIS
A. Bosworth was Bound by the Surety Bond
At the outset, the parties disagree as to whether Bosworth was bound by the surety bond
at all: Bosworth claims it was not bound, but Schuff argues that it was. Compare Mem. in Supp.
of Mot. for Summ. J., ECF No. 82-1 at 5–6 (“Motion”), with Mem. in Opp’n to Pl.’s Mot. for
Summ. J. & in Supp. of Cross Mot. for Summ. J., ECF No. 83-1 at 6–8, 13–14 (“Cross Motion”).
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As the court previously acknowledged, District of Columbia law applies to this dispute.
See Mem. Op. at 20–21. Under District law, “the written language embodying the terms of an
agreement will govern the rights and liabilities of the parties.” Dyer v. Bilaal, 983 A.2d 349,
354–55 (D.C. 2009) (citation omitted). “In other words, a party’s unexpressed intent is irrelevant
if a contract is unambiguous.” Id. at 355. Here, the surety bond unambiguously binds Bosworth
by its terms. It was signed by Bosworth, it states that Bosworth and Travelers both “bind
themselves,” and it makes Bosworth and Travelers jointly and severally liable for the full amount
of the subcontract work. Subcontract Performance Bond, ECF No. 82-4 at 1–4. Thus, the plain
language suggests the bond makes Bosworth liable so long as the condition precedent is met—
Bosworth fails to “perform the Construction Work to be done under the Subcontract.” Id. at 1, 3.
Moreover, Bosworth’s obligation to Schuff under the bond is not inextricably linked to
Travelers’. Bosworth and Travelers have bonded themselves “jointly and severally.” Id. at 3.
As the Supreme Court has explained, “a joint and several contract . . . contains distinct
engagements, that of each contractor individually, and that of all jointly.” Mason v. Eldred, 73
U.S. 231, 235 (1867). That means contracting parties “may be sued separately on their several
engagements or together on their joint undertaking.” Id.; accord 12 Williston on Contracts
§ 36.1 (4th ed.) (In a joint and several contract, “each party is bound separately for the
performance for which it promises” (citing cases)). The surety bond provides that Schuff must
notify Travelers and give it the opportunity to cure the nonperformance on the subcontract before
it may sue to collect. Subcontract Performance Bond at 1. The bond does not, however, state
that Bosworth is entitled to notice or an opportunity to cure. Nor does it condition Bosworth’s
liability for the subcontract work on Schuff notifying Travelers or giving Travelers the
opportunity to cure. Thus, Bosworth is liable for the subcontract work under the bond if the
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condition precedent is met, regardless of whether Schuff properly notified Travelers or gave
Travelers the opportunity to cure Bosworth’s nonperformance.
This holding also comports with decisions from other courts. The only cases cited by
either side that are on point indicate that “the principal debtor is at all times liable for the entire
and full debt” under a surety bond. Matter of 1616 Reminic Ltd P’ship, 9 B.R. 679, 683 (Bankr.
E.D. Va. 1981); accord Dick Kelchner Excavating, Inc. v. Gene Zimmerman, Inc., 264 N.E.2d
918, 922 (Ohio C.P. 1970) (“Any principal upon a performance bond is unconditionally liable to
perform in accordance with the terms and conditions thereof. Thus the principal is primarily and
always liable, and may be pursued without reference to the surety.”).
Bosworth disagrees. First, it argues that it was never bound by the bond; its obligation to
perform arises only under the subcontract. Reply in Supp. of Cross Motion, ECF No. 86 at 4–6.
Not so. Bosworth bound itself in the terms of the bond, including making itself jointly and
severally liable for the full sum of the contract work. Subcontract Performance Bond at 1–4.
Bosworth does not argue that the surety bond is not a valid contract, nor does it cite any case or
principle that would prevent it from being bound to perform the contract work under both the
subcontract and the performance bond.
Second, Bosworth contends that the entire bond is void, and thus unenforceable, because
the court held that Schuff failed to properly notify Travelers of Bosworth’s default. Cross
Motion at 6–8, 13–14; see Mem. Op. at 22 (holding “that Travelers did not breach” the bond and
granting Travelers summary judgment on Count II). Bosworth cites several cases for the
proposition that the court’s holding means the bond is void. Cross Motion at 14–16 (citing Hunt
Const. Grp. v. Nat’l Wrecking Corp., 542 F. Supp. 2d 87 (D.D.C 2008); St. Paul Fire & Marine
Ins. Co. v. City of Green River, 93 F. Supp. 2d 1170 (D. Wyo. 2000)). In those cases, however,
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the court held that the oblige could not recover from the surety—not that any obligation between
the oblige and the principal was also void. Hunt Const. Grp., 542 F. Supp. 2d at 96 (“Where the
obligee fails to notify a surety of an obligor’s default in a timely fashion, so that the surety can
exercise its options under the controlling performance bond, the obligee renders the bond null
and void . . . [the obligee] cannot recover from the Sureties.”); St. Paul Fire & Marine Ins. Co.,
93 F. Supp. 2d at 1178–79 (“Because the Court concludes that St. Paul would not have entered
the performance bond in the absence of its performance options under Paragraph 4, the Board’s
action depriving St. Paul of those options was a material breach, which discharged St. Paul from
any further duty of performance under the bond.”). Thus, neither case addresses the question
presented here: whether the contract between the principal and oblige remains even after the
contract between the oblige and surety is voided.
Finally, Bosworth argues that it was a beneficiary of the contract between Schuff and
Travelers, so Schuff’s breach in its obligation to Travelers violated Bosworth’s right as a
beneficiary. Cross Motion at 11–13. Under Bosworth’s theory, it is a beneficiary because
Travelers could have picked Bosworth as an alternative subcontractor in exercising its right to
cure under the bond. See id. To be sure, nothing on the face of the bond indicates that Travelers
could not have selected Bosworth to perform the subcontract work in the event of a default, but
that possibility alone does not make Bosworth a beneficiary. Importantly, Bosworth is already a
party to the bond directly—as a principal. It is not a third party at all.
Moreover, Bosworth does not fit the requirements of an intended third-party beneficiary
to Travelers’ and Schuff’s agreement. Only entities “the contracting parties had an express or
implied intention to benefit” have legal rights and status as beneficiaries. Fort Lincoln Civic
Ass’n v. Fort Lincoln New Town Corp., 944 A.2d 1055, 1064 (D.C. 2008) (citation omitted). An
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entity may be a beneficiary “if recognition of a right to performance in the beneficiary is
appropriate to effectuate the intention of the parties and either (a) the performance of the promise
will satisfy an obligation to pay money to the beneficiary; or (b) the circumstances indicate that
the promisee intends to give the beneficiary the benefit of the promised performance.” Id.
(quoting Restatement (Second) of Contracts § 302(1)). Because in no situation is Bosworth
owed money under the bond, it is only a beneficiary if its performance is “appropriate to
effectuate the intention of the parties” and Travelers intends for Bosworth to perform the
subcontract work if given the right to cure nonperformance. Bosworth, as the party seeking
beneficiary status, bears the “burden of proving the requisite intent.” Id. (quoting Ross v.
Imperial Constr. Co., 572 F.2d 518, 520 (5th Cir. 1978)).
Nothing in the record indicates that Schuff and Travelers intended to make Bosworth a
beneficiary of the bond or that Travelers intended for Bosworth to perform given the opportunity
to cure. Rather, Bosworth “might” have benefitted “from some of the promises made by”
Travelers, had Travelers chosen to have Bosworth cure its own nonperformance. Id. at 1067.
That makes Bosworth an “incidental beneficiary” without accompanying legal rights. Id. at
1067. Accordingly, Schuff’s breach with respect to Travelers does not carry over to Bosworth.
B. Bosworth is Liable Under the Bond
Undisputed facts demonstrate that Bosworth breached the surety bond. By its terms, the
bond is a conditional contract—it is “null and void” if Bosworth “perform[s] the Construction
Work to be done under the Subcontract.” Subcontract Performance Bond at 1. The parties do
not dispute that “Bosworth did not complete its scope of work under the Subcontract.” Schuff’s
Statement of Facts, ECF No. 82-2 ¶ 13; see Bosworth’s Statement of Facts, ECF No. 83-2 ¶¶ 1–3
(not including Schuff’s ¶ 13 in its disputes). To be sure, the court previously found genuine
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disputes of material fact regarding whether Bosworth or Schuff breached the subcontract itself.
Mem. Op. at 13–19. But by its plain terms, the bond is conditioned on whether Bosworth
“perform[s] the Construction Work to be done under the Subcontract,” not whether Bosworth or
Schuff comply with the subcontract. Bosworth’s nonperformance is undisputed.
Bosworth argues that it cannot be held liable under the bond because Schuff prevented it
from completing the subcontract work. Cross Motion at 9–11. “Where liability under a contract
depends upon a condition precedent,” a party cannot prevail by making “the performance of the
condition precedent impossible, or by preventing it.” Shear v. Nat’l Rifle Ass’n of Am., 606 F.2d
1251, 1255 (D.C. Cir. 1979). Bosworth contends that Schuff prevented it from performing the
subcontract work by (1) making a final decision to terminate Bosworth’s subcontract without
first issuing a cure or default notice, (2) directing Bosworth to demobilize from the job site,
(3) issuing a notice of intent to terminate without allowing the opportunity to cure, and (4) taking
over Bosworth’s remaining work. Cross Motion at 10. At bottom, Bosworth’s concern is with
how Schuff handled its nonperformance. But the bond does not entitle Bosworth to notice or the
opportunity to cure. Because Bosworth agrees that it did not complete its work under the
subcontract, it is liable under the surety bond.
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IV. CONCLUSION
For the foregoing reasons, the court will GRANT Plaintiff’s Motion for Summary
Judgment, ECF No. 82, and DENY Defendant’s Cross Motion for Summary Judgment, ECF
No. 83. An Order will accompany this Memorandum Opinion.
Date: February 21, 2024
Tanya S. Chutkan
TANYA S. CHUTKAN
United States District Judge
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