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Dun-Par Engineered Form Co. v. Vanum Const. Co., Inc.

Court of Appeals of Kansas

August 23, 2013

DUN-PAR ENGINEERED FORM COMPANY, Appellee,
v.
VANUM CONSTRUCTION CO., INC., Defendant, and The Hanover Insurance Co., Appellant, and Fortis Construction Co., LLC, Defendant.

Page 1073

Syllabus by the Court

1. A surety bond is to be construed in the light of the circumstances in which it is given, so as to effectuate its purpose.

2. The obligation of a bond is to be measured by the bond itself and may not be extended by implication or enlarged by construction beyond the terms of the executed contract.

3. The primary rule for interpreting written contracts is to ascertain the parties' intent. If the terms of the contract are clear, the intent of the parties is to be determined from the language of the contract without applying rules of construction.

4. Under the facts of the present case, a claimant under the language of the bond had to be an entity having a direct contract with the principal, or an entity having valid lien rights which may be asserted in the jurisdiction where the project was located. As the project was located within the Fort Riley Military Reservation, and because federal law prohibits mechanic's lien rights for contractors and subcontractors who work on federal land or buildings, the sub-sub-subcontactor did not have valid lien rights and therefore could not meet the definition of a claimant under the clear language of the bond.

Keith Witten, of Gilliland & Hayes LLC, of Overland Park, for appellant.

Matthew R. Hale, of Polsinelli Shughart PC, of Kansas City, Missouri, for appellee.

Before HILL, P.J., POWELL, J., and HEBERT, S.J.

POWELL, J.

The Hanover Insurance Co. (Hanover) appeals the denial of its own motion for summary judgment and the granting of Dun-Par Engineered Form Company's (Dun-Par) cross-motion for summary judgment. The district court granted Dun-Par's claim to recover the unpaid balance due Dun-Par, a sub-sub-subcontractor, from the Subcontract Payment Bond bought from Hanover by the subcontractor, Vanum Construction Co., Inc. (Vanum). Hanover challenges the district

Page 1074

court's interpretation of the definition of " Claimant" as set out in the bond.

Because we find that Dun-Par does not meet the definition of " Claimant" as set out in the Subcontract Payment Bond, we reverse the district court and remand with ...


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