Town of Huntington v. American Manufacturers Mutual Insurance Company – Case Brief Summary (New York)

In Town of Huntington v. American Manufacturers Mutual Insurance Company (32 Misc 3d 1240[A], 938 N.Y.S.2d 230, 2011 NY Slip Op 51647[U] [Sup Ct, Suffolk County 2011]), the town had brought an action against a contractor and surety seeking recovery under performance bonds issued by the surety.

The town entered into a settlement agreement with the defendant principal, but when its terms were not adhered to, the town brought an action against both defendants, seeking enforcement of the agreement.

The court determined that, despite the fact that the surety was not a party to the settlement agreement, it remained liable based on the performance bond because "as a surety its liability is derived from that of its principal"