Old Republic Surety Company is suing Illinois resident David J. Rutter for indemnification and specific performance.
According to the official court filing, Rutter entered an Agreement with the insurance company Old Republic on behalf of his construction company, R & W Builders, Inc., to execute bonds on behalf of his business. Under the Agreement, Rutter agreed to indemnify and save Old Republic harmless from: "and against every claim, demand, liability loss, cost, and expense which the Surety may pay, sustain, or incur in consequence of having executed or procured the execution of bond(s)". Additionally, Rutter, again on behalf of his company, promised that, in the course of his and R & W's performance of any contract bonder by Old Republic, the money received pursuant to the bonded contracts were to be held in trust for the benefit of subcontractors and suppliers and performance of work on the bonded contracts.
In exchange for the execution of this agreement, Old Republic issued bonds on behalf of R & W to guarantee its construction contract performance and payment to subcontractors and suppliers on various projects including the following: DuQuoin Elementary Project ($256,968); IDOT Project ($1,657,748); and Faith Lutheran Project ($3,230,600).
In 2021 and 2022, Rutter, both individually and on behalf of R&W, allegedly received contract funds from the projects that were required to be held in trust for project subcontractors and suppliers in accordance with both the Agreement and Illinois Law. However, Rutter allegedly failed to pay the subcontractors and suppliers or complete the various projects, doing financial damage to Old Republic. For instance, for the DuQuoin Elementary Project, the indemnitors allegedly received $236,044 required to be held in trust and failed to pay subcontractors and suppliers from the funds in the amount of $198,434.50. As a result, Old Republic has paid $132,661 as of present-day to satisfy the claims of the subcontractors and providers. The suit claims that Rutter had failed to hold the contract funds in trust and had instead used them for other purposes.
Rutter is being sued on three counts: contractual indemnification; specific performance; and non-contractual indemnification. Regarding the third count, Old Republic is seeking cash collateral valued at a minimum of $1,158,360.51. For all three charges, Old Republic is also seeking relief for legal fees and other rewards that the Court deems just.