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192226P.pdf 07/09/2020 Hanover Insurance Company v. Dunbar Mechanical Contractors
U.S. Court of Appeals Case No: 19-2226
U.S. District Court for the Eastern District of Arkansas - Jonesboro
[PUBLISHED] [Shepherd, Author, with Colloton and Erickson, Circuit Judges]
Civil case - Contracts. In a declaratory judgment action alleging a
performance bond contract was void on the ground the underlying
subcontract was invalid because it subcontracted more than the allowable
percentage for this type of set-aside government contract, the district
court erred in determining the percentage Dunbar spent on contract
performance relative to the prime contract exceeded the 85% limit because
the percentage could not be conclusively ascertained until the completion
of the prime contract; the district court erred in determining that
Hanover's potential liability under the False Claims Act if it were to
perform the bond warranted discharging it from its obligations and
rescinding the contract.