No. 21-1126

ARCH INSURANCE COMPANY,

Plaintiff, Appellee,

v.

THE GRAPHIC BUILDERS LLC,

Defendant, Appellant,

RCM MODULAR, INC.,

Defendant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Thompson, Lipez, and Kayatta, Circuit Judges.

Richard E. Briansky, with whom Eckert Seamans Cherin & Mellott, LLC and Peckar & Abramson, P.C. were on brief, for appellant.

Jonathan C. Burwood, with whom Watt, Tieder, Hoffar & Fitzgerald, LLP was on brief, for appellee.

June 1, 2022 LIPEZ, Circuit Judge. In this diversity case, The Graphic Builders LLC ("Graphic"), a general contractor, is seeking to enforce a performance bond issued by Arch Insurance Co. as surety for a subcontractor hired to work on a major project for Graphic. Arch, however, claims that Graphic breached the terms of the performance bond, and it seeks a judgment declaring that it has no liability under the bond. The district court sided with Arch, concluding that Graphic was required to terminate the subcontractor as a condition of seeking performance from Arch but had not done so. See Arch Ins. Co. v. Graphic Builders LLC, 519 F. Supp. 3d 54, 60-61 (D. Mass. 2021). Accordingly, the court granted summary judgment for Arch.

On appeal, Graphic argues that the district court erred in concluding that Arch's obligation to provide the warranty performance it seeks was conditioned on termination of the subcontractor. Graphic asserts that both the bond's language and relevant precedent support its position. We disagree and therefore affirm the district court's judgment.

I.

When reviewing a grant of summary judgment, we consider the facts in the light most favorable to the nonmoving party. See, e.g., Modeski v. Summit Retail Sols., Inc., 27 F.4th 53, 56 (1st Cir. 2022). In this case, there is no material disagreement about the facts, which we set forth below. Graphic and Arch debate only

- 2 - whether those facts give rise to Arch's obligations under the performance bond.

In 2017, Graphic was hired for a construction project in Charlestown, Massachusetts, that consisted of converting an existing commercial building to loft-style apartments and constructing a four-story apartment building on the same property. Graphic and the property owner agreed on a modular method of construction for the new building, and Graphic then selected an experienced modular manufacturer, RCM Modular, Inc., to fabricate and assemble the structure at a cost of about $8.6 million. Among the obligations included in the subcontract was a "Special Manufacturers [sic] Warranty" for the modular units' windows and doors.1

A performance bond issued in conjunction with the subcontract rendered Arch, as surety, "jointly and severally" responsible for RCM's obligations. Section 3 of the bond, which is reproduced in Section II below, specifies the actions by Graphic

1Graphic asserts in its brief that Arch was obliged "to issue a post-completion window warranty and other warranties," but it does not specify what "other warranties" are at issue. At oral argument, Graphic's counsel stated that only the window warranty is at issue. Following Graphic's lead, we focus on the window warranty and consider waived any assertion that a different analysis would apply to "other warranties."