Norman S. Wright & Co. v. United States Fidelity & Guaranty Co.
Norman S. Wright & Co. v. United States Fidelity & Guaranty Co.
Opinion of the Court
OPINION
The appellant, United States Fidelity & Guaranty Company, was the surety on five bonds relating to five different contracting licenses issued by the registrar of contractors to a contractor. Arizona York Refrigeration Company.
Since there were no controverted material facts, both parties moved for summary judgment. The trial judge entered judgment against the surety for the full amount of the bonds supporting the Class B and C-45 licenses, and the surety has appealed from that judgment.
“1. That the conditions stated in the Class B and C-45 license bonds here in question do not limit the surety’s liability under those bonds to actions arising out of the principal’s failure to perform contracts or pay for labor or material supplied pursuant to the particular license for which the bond was issued. Rather, said bonds render the surety liable to any person who is damaged by the failure of the principal to perform a construction contract, or to any person furnishing labor or materials to the principal to be used in the direct performance of a construction contract, regardless of whether or not said contract is undertaken pursuant to the license for which the bond was issued;”
This legal conclusion is apparently based on the language of A.R.S. § 32-1152D which provides that the bond required in support of a contracting license “shall be subject to claims ... by any person furnishing . . . materials . . . used in the direct performance of a construction contract." (Emphasis added).
We hold that the trial court erred. In Watson v. Welton, 115 Ariz. 76, 563 P.2d 331 (App. 1977), this Court analyzed the licensing and bonding scheme contemplated by A.R.S. § 32-1152 and concluded that in multiple-licensing situations, the surety’s liability on the supporting bonds was limited to the contractor’s failure to perform a contract under the license for which the bond was issued. While the facts in Watson are distinguishable, the legal analysis is not. Here each bond clearly identified the license and contracting classification for which it was issued. Those for whose benefit bonds were required in connection with the contractor’s C-39 (Air Conditioning) and C-58 (Warm-air Heating, Ventilation) contracts received the full benefit of those bonds.
The judgment is reversed, and the matter remanded for entry of judgment in favor of appellant.
. The license classifications and the bond amounts were as follows:
License Classification Amount
1. C-39 Air Conditioning $ 7,500.00
2. C — 4 Boilers, Steamfitting and Processed Piping 1,000.00 License Classification Amount
3. C-58 Warm-air Heating, Ventilating, Evaporative Cooling $7,500.00
4. B-General Building, Heavy Construction 3,000.00
1,000.00 5. C-45 General Sheet Metal
. The pertinent terms of each of the bonds are substantially identical to the above-quoted statutory language.
. The full penal sum of the C-39 and C-58 bonds have been paid by the surety,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.