Del Hur, Inc. v. National Union Fire Insurance Co. of Pittsburgh

Del Hur, Inc. (“Del Hur”) filed this action in the district court to enforce the terms of a performance and payment bond. The district court denied the National Union Fire Insurance Company of Pittsburgh, Pennsylvania’s (“National Union”) motion that dismissal of this action was compelled because of a lack of federal court jurisdiction over an action to enforce a performance and payment bond. National Union contends that the district court lacked subject matter jurisdiction pursuant to 28 U.S.C. § 1352 because the issuance of the bond was not required by any law of the United States. We affirm because we conclude that a district court has subject matter jurisdiction over an action to enforce a bond that was executed pursuant to 24 C.F.R. § 905.170 (a), notwithstanding the fact that the issuance of a performance and payment bond is only one of the four methods prescribed by the regulation to assure that the terms of a construction contract will be honored by the contractor. We also reject National Union’s state law contract defense as unsupported by Washington state law.

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In March of 1993, Blaze Construction, Inc. (“Blaze”) executed a contract with the Lower Elwha Housing…