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Surety’s Liability Limited to Face Amount of Discharge Bond

Surety’s Liability Limited to Face Amount of Discharge Bond

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In Casa Redimix Concrete Corp. v. Cosner Construction Corp. the Appellate Division, First Department, looked at a case where the trial court awarded judgment in favor of hte plaintiff subcontractor and against the defendant general contractor and the surety that issued a discharge bond. The judgment rendered against the general contractor and the surety included the value of the work plus pre-judgment interest. The result was nearly $425,000.00 in liability jointly and severally against the general contractor and the surety. However, the surety, whose face bond amount was only $288,000.00 appealed. The appellate division held that the surety was only liable for the amount of its undertaking plus the interest from the time of the surety’s default. Since the surety never defaulted here, the amount of liability was limited to the face value of the bond – $288,000.00.

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