ISLAND INS. CO. v. HAWAIIAN FOLIAGE & LANDSCAPE

Nos. 00-16874, 00-16940.

288 F.3d 1161 (2002)

ISLAND INSURANCE COMPANY, LTD., Plaintiff-Appellee, v. HAWAIIAN FOLIAGE & LANDSCAPE, INC., a Hawaii corporation; Kenneth Kato; Oahu Construction Company, a Hawaii corporation; State of Hawaii, a governmental entity; Seiji Naya; Ray K. Kamikawa; Lorraine H. Akiba; CB Bancshares, Inc., a Hawaii corporation, Defendants, and United States of America, a governmental entity, Defendant-Appellant. Island Insurance Company, Ltd., Plaintiff-Appellee, v. Hawaiian Foliage & Landscape, Inc., a Hawaii corporation; Kenneth Kato; Oahu Construction Company, a Hawaii corporation; United States of America, a governmental entity; Seiji Naya; Ray K. Kamikawa; Lorraine H. Akiba; CB Bancshares, Inc., a Hawaii corporation, Defendants, and State of Hawaii, a governmental entity, Defendant-Appellant.

United States Court of Appeals, Ninth Circuit.

Filed May 3, 2002.


Attorney(s) appearing for the Case

John A. Dudeck, Jr., Tax Division, United States Department of Justice; Roxann C. Bulman and Kurt Kawafuchi, Department of the Attorney General, State of Hawaii, for the defendants-appellants.

Michael N. Tanoue, The Pacific Law Group, Honolulu, HI, for the plaintiff-appellee.

Before: THOMPSON, O'SCANNLAIN and BERZON, Circuit Judges.


BERZON, Circuit Judge.

The question in this case is whether the government is an intended beneficiary, for the purpose of securing the payment of taxes due, of the surety bond that insured a subcontractor's performance. Parties to surety contracts are free, of course, to choose whether or not to insure for tax obligations. We interpret the language of the contract in this case to have done so, and therefore hold that both...

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