Patrick R. Kingsley
PartnerChair, Alternative Dispute Resolution
Experience
Pennsylvania Supreme Court Rules Sureties Are Not Liable for Bad Faith
Stradley Ronon partner Patrick Kingsley and counsel Adriel Garcia secured a significant victory for surety companies in Pennsylvania. In Eastern Steel Constructors v. International Fidelity Insurance, 2026 WL 457805 (Pa. 2026), the Pennsylvania Supreme Court ruled that Pennsylvania’s insurance bad-faith statute does not apply to sureties or surety bonds. The subcontractor, Eastern Steel Constructors, had asserted a payment bond claim, which was denied in part. It argued a surety should be liable for bad faith under the statute because suretyship and insurance are essentially the same thing. Mr. Kingsley presented oral argument before the Supreme Court and convinced them otherwise.
The Supreme Court found the plain language of the statute only applies to “insurance policies” written by “insurers.” The court found that language “clearly and unambiguously does not encompass a surety bond.” The court was persuaded that insurance and suretyship were fundamentally different and had been recognized as different for quite some time, citing the 1996 Pennsylvania Supreme Court case Foster v. Mutual Fire, Marine and Inland Insurance, which itself quotes the 1962 U.S. Supreme Court case Pearlman v. Reliance Insurance. As a result, the court concluded that “the General Assembly did not intend to subject surety bonds to the bad faith statute.”
Until Eastern Steel Constructors, there had not been a published Pennsylvania appellate court decision on the applicability of the bad-faith statute to sureties. This historic ruling from Pennsylvania’s highest court resolves the issue in Pennsylvania once and for all.
Mr. Kingsley previously succeeded in reversing the law in New Jersey regarding the applicability of bad-faith claims to sureties. In the 2010 case of SBW v. Ernest Bock & Sons, the U.S. District Court for the District of New Jersey rejected the holding in the 2000 case of U.S. ex rel. Don Siegel Construction v. Atul Construction, which recognized such a bad-faith cause of action against sureties. The SBW case has since been cited several times with approval, marking a reversal in New Jersey law.
Patrick R. Kingsley and Adriel J. GarciaStradley Ronon Advises International Fidelity Insurance in Avoiding $600K Windfall Payment in $2M Surety Bond Case
In H.C. Pody v. International Fidelity Insurance, the U.S. District Court for the Eastern District of Pennsylvania sided with International Fidelity Insurance Co., represented by Stradley Ronon, denying a contractor’s demand for the full penal sum on a mechanics lien discharge bond. The contractor argued that the bond issued with a $2 million penal limit entitled it to the full penal sum even though that amount was $601,975 beyond the underlying lien judgment.
The court disagreed, holding that the bond covered only the actual judgment amount —not the entire bond limit — and granted our client’s motion for judgment on the pleadings. In its opinion, the court noted the contractor was “stretch[ing] the language of the surety bond beyond its agreed scope to claim hundreds of thousands of dollars that no court awarded it.”
Patrick R. Kingsley and Colin H. Cassedy
Travelers Casualty & Surety Victorious in the Third Circuit
Stradley secured an important Third Circuit victory for Travelers Casualty and Surety when the court affirmed the Middle District’s dismissal of a performance bond claim against Travelers arising from a substantial public works project. Travelers was the surety on a contract to refurbish a sewer in Milton, Pennsylvania. Soon after the project commenced, the Milton Regional Sewer Authority fired the contractor for a litany of alleged serious performance deficiencies. The authority did so, however, without first giving the contractor the opportunity to cure the deficiencies, as required by the underlying construction contract and the bond. Milton replaced the contractor and then sued Travelers, seeking payment under the bond for the extra costs. Stradley persuaded the trial court to grant its motion to dismiss, extinguishing this potential million-dollar Travelers liability. Milton appealed to the Third Circuit, arguing that its violation of the cure period was excused because of the seriousness of the contractor’s poor performance. Again, Stradley was able to persuade the Third Circuit to reject Milton’s argument while adopting in its opinion virtually all the arguments advanced by Stradley. The decision is a significant victory for the surety industry and this appears to be the first case in the country dismissing a surety on these grounds at the pleadings stage.
Patrick R. KingsleyTherapeutic Radiation Malpractice Claim Defeated
Stradley Ronon successfully tried a significant insurance claim for Reliance Insurance Co. (in Liquidation). The claimant, who was given therapeutic radiation, developed severe neurological complications following the treatment. Stradley defended causation by contending that the neurological deficits that developed were caused by an autoimmune response, and not because of the treatment, and that the insured was not guilty of malpractice. Stradley secured a victory before a referee appointed in the Reliance liquidation.
Patrick R. KingsleyNo Bad Faith in New Jersey
SBW, Inc. v. Ernest Bock & Sons, Inc. – Our surety team convinced a federal court interpreting New Jersey law that a surety cannot be liable for the bad faith denial of a surety bond claim. This seminal decision reversed case law in New Jersey on this subject. This opinion has now been followed in several published decisions.
Patrick R. KingsleyNotice to Cure Enforced
Donald M Durkin Contracting, Inc. v. City of Newark – Our construction litigation team secured the dismissal of a claim that a general contractor defaulted on the construction agreement for a massive reservoir near Newark, Delaware. Stradley Ronon lawyers succeeded in having the surety dismissed on the basis that the general contractor was wrongfully terminated because the owner failed to satisfy the construction contract's notice-to-cure requirements.
Patrick R. KingsleyRight to Cure Enforced
Milton Regional Sewer v. Travelers Casualty & Surety Co. of America – Our construction litigation team succeeded in obtaining the dismissal of a performance bond claim on the grounds that the owner failed to afford the contractor the right to attempt to cure its alleged construction shortcomings.
Patrick R. KingsleyStradley Enforces No-Damages-for-Delay Provision Before Commonwealth Court
Guy Cooper Inc. v. East Penn School District v. United States Fidelity & Guaranty – Stradley litigators succeeded in having the owner’s joinder complaint against the general contractor and its surety dismissed on the grounds that the construction contract’s no-damage-for-delay provision precluded such joinder.
Patrick R. Kingsley
