Schmitt

Insurance Company of North America (INA), surety on a licensed motor vehicle dealer’s bond, appeals a money judgment entered against it after a trial by the court sitting without a jury. The court’s ruling against INA was on the theory it breached its duty to both claimants and principals on the bond to act in good faith on a bond claim, including a duty of paying claims as they arose and reasonably investigating claims regarding the question of coverage and the question of the obligation to pay. The judgment runs in favor of Conrad Schmitt and Charles Sackett (sometimes referred to as claimants) as well as Daniel Martin and Michael Juneau (sometimes referred to as principals) in the principal amount of $157,225 plus costs of $2,178.75 and attorney’s fees of $177,200, together with interest.

INA makes numerous contentions of error, including:

(1) The essential conditions for liability of a surety under a motor vehicle dealer’s bond were not established by the evidence and consequently the court erred as a matter of law when it ruled that there was coverage under the bond;

(2) INA has been exonerated by the claimants’ covenant not to execute upon an interim judgment it…