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March 2016

Las Vegas Team Prevails in Performance Bond Assignment Trial

Camino Properties LLC v. Insurance Company of the West (U.S. District Court – Nevada)

Gordon & Rees partner Jon Ludwig and senior counsel Brian Walters prevailed at trial before the U.S. District Court of Nevada on a performance bond assignment case. In the matter, the Developer, represented by Gordon & Rees, sought recoupment from the performance bond surety for costs it incurred in completing offsite improvement work secured by the bond. The Developer purchased and completed a distressed Planned Urban Development project upon assurances by the government that the government would either call the bond or assign the bond to the Developer. Ultimately, the government assigned the performance bond to the Developer. The surety denied the claims made by the Developer contending that the government’s assignment of the performance bond was invalid.

The Gordon & Rees team convinced the district court to reject old California authority and to instead adopt recent authority from Virginia and Illinois allowing such an assignment when the purpose of the assignment is to complete the bonded work. The trial team also convinced the district court the assignment was made to compensate the Developer for the offsite work even though the completion of the offsite work was required to obtain certificates of occupancy for the project. The decision establishes new precedent in Nevada and the Ninth Circuit.

Brian K. Walters



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