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ARGONAUT INS. CO. v. TOWN OF CLOVERDALE, INDIANA

No. 82-1268.

699 F.2d 417 (1983)

ARGONAUT INSURANCE COMPANY, Plaintiff-Appellee, v. TOWN OF CLOVERDALE, INDIANA, Defendant-Appellant.

United States Court of Appeals, Seventh Circuit.

Decided February 9, 1983.

Rehearing and Rehearing Denied March 22, 1983.

Attorney(s) appearing for the Case

Jerdie D. Lewis, Lewis & Lewis, Terre Haute, Ind., Rexell A. Boyd, Boyd & Young, Greencastle, Ind., for defendant-appellant.

Eric A. Frey, Rosenfeld, Wolfe, Frey & Hunt, Terre Haute, Ind., for plaintiff-appellee.

Before CUMMINGS, Chief Judge, POSNER, Circuit Judge, and NEAHER, Senior District Judge.

Rehearing and Rehearing En Banc Denied March 22, 1983.

POSNER, Circuit Judge.

The appeal in this diversity case requires us to decide a question of suretyship under the common law of Indiana. The essential facts are undisputed. The Town of Cloverdale, Indiana hired a contractor, HESCO, to build sewers. HESCO gave the town a performance bond in the amount of $238,000. The surety on the bond was Argonaut Insurance Company. Under its contract with HESCO, the...

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