Insul-Crete, Inc. v. Guam Housing & Urban Renewal Authority

DECISION

The bond in issue was obtained by AJB from CIC as surety for its performance of a contract with GHURA. It is CIC’s contention that since the terms of the bond run expressly only to GHURA, that Insul-Crete, as a subcontractor of AJB, lacks sufficient contractual privity to enforce its claim against itself. However, the law on this issue is fairly clear and contrary to CIC’s contention. Simply stated, it is settled that bonds of this nature not only run to the expressly named beneficiary, but as well “inure to the benefit of third parties providing materials and furnishing labor to be used in the construction of the *323building.” See Gordy v. United Pacific Ins. Group, 243 C.A.2d 445 (1966); C. O. Sparks, Inc. v. Pacific Coast Paving Co., 324 P.2d 293 (1958); Sunset Lumber Co. v. Smith, 267 P. 738 (1928); W. P. Fuller & Co. v. Alturas School Dist., 153 P. 743 (1915).

Therefore, Defendant CIC’s motion for summary judgment is hereby denied while Plaintiff Insul-Crete’s motion for summary judgment is hereby granted.

So ordered.