A jury trialin Hawaii found that the defendants — a fire alarm company and its owners — breached a contract with their bonding company. This was after finding that the defendants failed to respond to the bonding company’s request that they post collateral to cover the bonding company’s potential exposure on third-party claims against the defendants.
In 2012, the defendants successfully bid on several contracts to install fire alarm systems at public schools for the state of Hawaii. As a condition of the contracts, the defendants obtained performance bonds from the bonding company. Under the terms of those bonds, if the defendants defaulted on the contracts, the state could require the bonding company to pay the cost of completing the work.