First National Insurance Co. of America v. Commonwealth

First National Insurance Company of America (Surety), surety on performance and payment bonds for a public building contract, seeks to recover from the Commonwealth the value of a progress payment made by the Commonwealth to the contractor. The Surety, who completed performance on the contract after the contractor’s default, alleges that the Commonwealth’s failure to stop payment on the progress payment check violated the Surety’s subrogation rights to the contract, funds. Following a jury-waived trial, the judge held that *322the Commonwealth was entitled to issue the progress payment check and…