Fidelity & Guaranty Insurance v. Arlyn Davis Construction LLC

MEMORANDUM **

Gross & Son, Inc., A.W. Davis, Frieda Davis and E. Gene Gross (collectively “the defendants”) appeal the district court’s judgment, entered after a bench trial, enforcing an indemnity agreement and awarding attorney fees in favor of Fidelity and Guaranty Insurance Company. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.

The district court concluded that Fidelity’s forbearance from taking actions it legally was entitled to take constituted consideration for the indemnity agreement. That conclusion was not erroneous. Fidelity could have notified the City of McMinnville that it was revoking the performance and completion bonds, and it could have attempted to do just that. Instead, it forbore such action, and there is substantial evidence that it did so in exchange for the defendants’ indemnity agreement.

Fidelity did in fact forbear—it did not revoke the bonds, nor attempt to do so. The defendants did in fact enter into the indemnity agreement, and they did so in response to Fidelity’s threats to revoke the bonds if a personal guaranty was not signed. The defendants had a personal stake in Arlyn Davis Construction, the general contractor who contracted…