Utica Mutual Insurance Company v. Vigo Coal Company, Inc.
United States Court of Appeals for the Seventh Circuit
393 F.3d 707 (7th Cir. 2004)
In 1991, Vigo Coal Company, Inc. (Vigo) (defendant) purchased Buck Creek Coal, a coal mining operation. Buck Creek Coal was required by law to post reclamation bonds in order to operate the mines. Utica Mutual Insurance Company (Utica) (plaintiff) issued the bonds on condition that it be indemnified for any losses incurred as a result of issuing the bonds. Utica had Vigo, Atlas Minerals (Atlas) (defendant), and their respective owners sign an indemnity agreement to that effect. In 1992, a second indemnity agreement was signed by Charles Schulties, who had not signed the 1991 agreement, and Atlas. Buck Creek Coal was later unable to reclaim the land and the State of Indiana required Utica to perform the reclamation work. Utica then brought suit for indemnification in the amount of $400,000.00 against the signers of both the first and second agreements. The district court found that the second agreement constituted a novation. Consequently, the district court found the signers of the first agreement were not liable. In reaching this conclusion, the district court considered evidence that, in 1992, Vigo sold the coal mine to Atlas and Schulties, who agreed to obtain a release of Vigo’s liability under the first agreement. The evidence further showed that Schulties and Atlas together had enough assets to persuade Utica to accept an indemnity agreement signed only by them. Utica attempted to recover its losses from Atlas and Schulties. However, Schulties had gone bankrupt and Atlas was unable to recover the entire amount. Utica therefore brought suit to challenge the district court’s finding that the 1992 agreement was a novation.
Rule of Law
Holding and Reasoning (Posner, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 175,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.