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Written Indemnity Contract Enjoys Long Time Limit In Illinois

Sunday, January 01, 2012 09:46 am


Indemnity -- Contract Breach

Evergreen Nat'l Indemnity Co. v. R&W Clark Constr., Inc., 2011 U.S. Dist. Lexis 124926 (N. D. Ill. Oct. 28, 2011) A defaulted contractor that failed to compensate its surety for losses breached two contracts: an indemnity agreement as well as a subsequent agreement to complete the work post-termination.

Evergreen National Indemnity Company (Evergreen) issued performance and payment bonds to R&W Clark Construction, Inc./Continental Construction, Inc., a joint venture (collectively, Clark), to secure its general contractor services on a construction project for Illinois' Hanover Park Park District. When Clark eventually defaulted, Evergreen was obligated to step in and complete the contract. The surety claimed it incurred substantial losses as a result and sought indemnity from Clark.

Clark disputed Evergreen's claims by alleging they were time-barred. First, Clark claimed that Evergreen failed to satisfy the two-year limit for the commencement of any action arising out of a party' [...]

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