Amwest Surety Insurance v. Patriot Homes, Inc.

Pursuant to a series of indemnity contracts, plaintiff, Amwest Surety Insurance Company, provided construction and other bonds to David Schwartzman, Trust A of the Ziegler Family Trust, Patriot Homes, Inc., and Patriot Homes—Maple Drive, L.L.C. (collectively, defendants), as part of their real estate development business. In the course of defendants’ business, a real estate broker obtained a judgment against Patriot Homes, Inc. and Patriot Homes—Maple Drive, L.L.C. (collectively, contractor defendants). Contractor defendants appealed, and, at their request, Amwest provided an appeal bond for them. (Code Civ. Proc., § 917.1.) Contractor defendants lost the appeal, but refused to pay the judgment and Amwest, acting as surety, paid the judgment. Amwest then brought this action against (1) all defendants for breach of the indemnity contract and (2) contractor defendants for statutory indemnity (Civ. Code, § 2847). After a court trial, the court accepted defendants’ argument that the indemnity agreements did not cover appeal bonds, and entered judgment for defendants on the contract (first) cause of action, and judgment for Amwest on the statutory indemnity (second) cause of…