United States Fidelity and Guaranty Co. v. Arch Insurance Co.

This appeal requires us to determine whether we have jurisdiction pursuant to the collateral order doctrine to review a district court order summarily dissolving a pretrial attachment, where the appellant chose not to seek an articulation of the basis for the court’s ruling and the record does not make the basis apparent. The context is a dispute between two sureties, both claiming rights to the same property. Appellant United States Fidelity & Guaranty Company (USF&G) and intervenor-appellee Arch Insurance Company (Arch) are issuers of surety bonds. Each entered into surety and indemnification agreements with the defendant in this case, Eastern Contractors, Inc. (Eastern), a construction company, which ultimately defaulted on the bonds issued by both sureties pursuant to their respective agreements. Shortly after USF&G brought this action against Eastern in federal court, USF&G and Arch commenced ill-fated negotiations concerning a potential cooperation agreement for the sharing of Eastern’s assets. At the time, Arch was not yet a party to this litigation.

In August 2006, the district court granted USF&G’s request for an ex parte attachment on four parcels of real property owned by Eastern in Massachusetts. Arch, seeking to protect its own rights and recoup its losses, sued Eastern in Massachusetts state court, successfully attaching two of the same parcels of land in January 2007,*fn2 and eventually obtaining a judgment against Eastern. In June 2007, Arch moved to intervene in this action and dissolve USF&G’s attachment. That attachment was preventing Arch from immediately executing its judgment against Eastern, which had become insolvent and whose assets were almost certainly insufficient to cover the competing claims of its creditors. The district court allowed Arch to intervene and partially dissolved USF&G’s attachment. Arch moved for reconsideration, seeking total dissolution, and, in a margin order with no articulated reasoning, the district court dissolved the attachment in toto, though it stayed execution of the dissolution order pending this appeal.