Surety Co. of the Pacific v. Rayson (In Re Rayson)

MEMORANDUM OF DECISION

CALVIN K. ASHLAND, Bankruptcy Judge.

FACTS

Nolan J. Rayson (“Rayson”) is a licensed contractor. Rayson obtained a contractor’s license bond, as required under California law, from Surety Company of, the Pacific (“Surety”). Rayson signed an agreement to indemnify Surety for any claims made against the license bond.

Rayson was sued by a customer in California Superior Court for breach of a construction contract. Surety was named as a defendant in the suit, based on the bond, but was not immediately served with the summons and complaint.

Shortly after the state suit was…