State v. Fidelity & Deposit Co. of Maryland

In 1999, Sedona Contracting, Inc., contracted to build a research and technology center for the Texas Department of Transportation (“TxDOT”) and purchased an $11.02 million performance bond with sureties Fidelity & Deposit Co. and Colonial American Casualty & Surety Co. (collectively “Fidelity”). When Sedona defaulted, TxDOT demanded that Fidelity perform under the bond. Fidelity executed a “Takeover Agreement” with TxDOT and hired Faulkner Construction to complete the job. While Faulkner finished the project, cost-related disputes arose between Fidelity and TxDOT, with Fidelity asserting…