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EMMCO INS. CO. v. FRANKFORD TRUST CO.

December 27, 1972

EMMCO INSURANCE COMPANY, an Indiana corporation, Plaintiff,
v.
FRANKFORD TRUST COMPANY et al., Defendants


Joseph S. Lord, III, Chief Judge.


The opinion of the court was delivered by: LORD, III

JOSEPH S. LORD, III, Chief Judge.

 I. FACTS

 By a writing dated July 31, 1969, plaintiff as re-insuror executed and delivered a certain reinsurance agreement in the penal amount of $78,118.50 on behalf of United Bonding Insurance Company ("United"), whereby plaintiff undertook to reinsure a portion of a certain performance bond that United and Noe Construction Corporation ("Noe") executed in favor of Colonial Funding Corporation of Pennsylvania ("Colonial") and Frankford Trust Company ("Frankford").

 The performance bond was conditioned for the performance of all work required in the fulfillment of a contract dated July 31, 1969 between Noe and Colonial for the construction of the Northampton Nursing Home, Federal Housing Administration Project No. 034-43016-PM.

 In addition to the performance bond, Noe and United executed a payment bond conditioned for the payment of all persons supplying labor and materials for the construction of the nursing home. Plaintiff denies undertaking to reinsure the payment bond obligation. Defendants Frankford, Strescon, and Thonet contend the plaintiff undertook to reinsure both the performance bond and the payment bond. This is a contested issue of fact as to which we make no finding at this time.

 In any event, it appears from the pleadings that Noe has not completed performance of its agreement with Colonial and Frankford, and in addition, has failed to pay certain subcontractors and materialmen who have furnished labor and materials on the nursing home project.

 Defendant Strescon has obtained a judgment against Noe and United in the amount of $34,615.50. Strescon Industries, Inc. v. Noe Construction Corp. and United Bonding Co., Court of Common Pleas, Northumberland County, Pennsylvania, No. 391, May Term, 1970. Defendant Thonet filed a complaint in this court on July 31, 1971 against Noe, United and Emmco, seeking a judgment in the amount of $50,637.94. Thonet Industries, Inc. v. Noe Construction Corporation, Joseph S. Geeslin, Jr., Liquidator of United Bonding Insurance Company and Emmco Insurance Company, C.A. No. 71-1635 (E.D.Pa.).

 Plaintiff denies liability to the claimants, and in the alternative, contends that its liability is limited to the sum of $78,118.50. Finally, plaintiff seeks the following relief: (a) that the defendants be enjoined from instituting, maintaining, or prosecuting any suit against plaintiff in connection with the nursing home project; (b) that the defendants be required to interplead among themselves their rights, if any, to the $78,118.50; (c) that the defendants be required to set forth in this proceeding all of their claims against plaintiff; (d) that plaintiff be discharged from all liability arising from the reinsurance agreement; and (e) that the plaintiff be awarded an amount equal to the costs and expenses incurred by it in the prosecution of this action.

 From the foregoing it is quite clear that numerous claims have been asserted or threatened against plaintiff, so that plaintiff "is or may be exposed to double or multiple liability", F.R.Civ.P. 22, in excess of the plaintiff's alleged liability of $78,118.50. We therefore conclude that an action in the nature of interpleader is appropriate.

 II. MOTION TO DISMISS BY FHA

 Defendant Federal Housing Authority ("FHA") has moved to dismiss pursuant to F.R.Civ.P. 12(b)(1) and (6). For the following reasons we will deny this motion.

 The FHA's first contention is that the injunction sought by plaintiff is not permissible under F.R.Civ.P. 22 ...


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