Observations of the legal scene from the Cornhusker State, home of Roscoe Pound and Justice Clarence Thomas' in-laws, and beyond.
Sunday, August 19, 2007
Nebraska Supreme Court in two cases arising from the Amwest liquidation that started six years ago rules against landlord who sought satisfaction from defaulted tenants performance bond, but rules in favor of Florida general contractor who said it never received notice of the Amwest liquidation proceedings.
State ex rel. Wagner v. Amwest Security Ins. Co., S-05-1267, 274 Neb. 110 (Strategic Capital Resources, Inc.)
State ex rel. Wagner v. Amwest Security Ins. Co., S-06-049, 274 Neb. 121(Sunhouse International)
The Supreme Court affirms denying the claims of Strategic Capital Resources against its tenants performance bond to satisfy rental payments. Turns out the tenant-principal defaulted three days after the Insurance Department's notice that it would cancel the Amwest bond. "Each of the four lease bonds contained
explicit conditions that must be complied with before A mwest’s
liability under the agreements would arise. All four lease bonds required Strategic to provide A mwest written notice of (principal’s) default as a condition
precedent to S trategic’s right to payment under the lease
bonds. Amwest however did not receive notice of defaults until after cancellation. Strategic may not analogize these cases to cases arising form claims-based insurance policies as bond claims require strict compliance with preconditions for them.
In the Sunhouse international case, the Supreme Court rules in favor of the claimant against a defaulted construction performance bond. The evidence showed that Amwest liquidators sent notice to the claimant's former attorneys offices. The claimant disputed that it received notice. Only later did Amwest liquidators produce an affidavit with out supporting documents stating the it did give proper notice. On denovo review Supreme Court discounts the affidavit. "we find the affidavit insufficient proof that, in accordance with
§ 44-4822, notice was sent to S unhouse’s last known address
as reflected in A mwest’s records."