Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co.

Boys Club of San Fernando Valley, Inc. (Boys Club) appeals from an order denying its petition to compel Fidelity and Deposit Company of Maryland (Fidelity) to take part in an arbitration between Boys Club and McLaughlin Construction, Inc. (McLaughlin).

Factual and Procedural Background

In January 1985 Boys Club and McLaughlin entered into a written contract whereby McLaughlin agreed to construct a recreation facility for Boys Club for $1,268,980 (the contract). The contract contained an arbitration clause requiring the parties to arbitrate “[a]ll claims, disputes and other matters in question between the Contractor and the Owner arising out of, or relating to, the Contract Documents or the breach thereof. . . .”

In February 1985, pursuant to the contract, McLaughlin obtained a performance bond in the sum of $1,268,980 from Fidelity with McLaughlin as principal, Fidelity as surety and Boys Club as obligee. The bond referred to the contract and made it a part of the bond by reference. The bond provided that if McLaughlin were declared by Boys Club to be in default under the contract Fidelity could remedy the default, complete the contract itself, or have the work done by…