Posterity Scholar House LP contracted with a general contractor to perform work on a construction project. As required by their contract, the general contractor obtained surety bonds from FCCI Insurance Company. When the general contractor allegedly failed to perform under the construction contract, Posterity filed bond claims with FCCI, demanding that FCCI perform the general contractor’s obligations. Posterity later filed suit against FCCI, claiming it handled Posterity’s bond claims in bad faith. The trial court entered summary judgment in favor of FCCI, finding it did not owe Posterity a duty of good faith and fair dealing under Indiana law. Posterity appeals.

A surety bond acts like a contract between three parties: the surety (FCCI), the obligee (Posterity), and the principal (general contractor). As a matter of first impression under Indiana law, this case asks whether the surety owes the obligee a duty of good faith and fair dealing, and if so, whether the breach of that duty gives rise to a cause of action in tort.

The scheduled panelists are Judge Vaidik, Judge Crone, and Judge Weissmann.