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NEWBERY CORP. v. FIREMAN'S FUND INS. CO.

Nos. 94-16806, 95-15336.

95 F.3d 1392 (1996)

NEWBERY CORPORATION; Newbery Electric, Inc., Plaintiffs-Counter-Defendants-Appellants, and Citibank (Arizona), Plaintiff-Intervenor-Appellant, v. FIREMAN'S FUND INSURANCE COMPANY; The American Insurance Company; National Surety Corp.; Associated Indemnity Corporation; American Automobile Insurance Co., Defendants-Counter-Claimants-Appellees. NEWBERY CORPORATION; Newbery Electric, Inc., Plaintiffs-Appellees, v. FIREMAN'S FUND INSURANCE COMPANY; The American Insurance Company; National Surety Corp.; Associated Indemnity Corporation; American Automobile Insurance Co., Defendants-Appellants.

United States Court of Appeals, Ninth Circuit.

Decided September 11, 1996.

Attorney(s) appearing for the Case

Douglas A. Bartman, Law Offices of Malcolm A. Misuraca, San Francisco, CA, for plaintiffs-appellants.

Rob Charles and John P. Frank, Lewis and Roca LLP, Tucson, AZ, for plaintiff-intervenor-appellant.

Curtis A. Jennings, Jay M. Mann and Robert J. Berens, Jennings & Haug, Phoenix, AZ, for defendants-appellees.

Before KOZINSKI, THOMPSON, and O'SCANNLAIN, Circuit Judges.

OPINION

O'SCANNLAIN, Circuit Judge:

We examine the application of the doctrine of recoupment in a breach of contract action brought by the debtor in a bankruptcy proceeding.

I

In early 1987, Newbery Electric, Inc. was a large electrical subcontractor with numerous projects pending.1 For a number of those projects, including the one at issue in the present appeal, Newbery obtained performance and payment bonds...

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