Lexon Ins. Co. v. Naser

Naser was the founder, 20 % co-owner, and chief executive of Michigan Orthopedic Services. The other co-owner was MOS, a private equity firm. In 2009, new Medicare regulations required the company to obtain surety bonds. The co-owners applied to Lexon, which responded with an indemnity agreement: “I agree to indemnify Lexon. . . in connection with any bond executed on behalf of the person or entity named as ‘applicant’ below.” There were three signature blocks. The first appeared under the named “applicant”: “Michigan Orthopedic Services.” The last two appeared under: “In consideration of the execution by the Surety of the bond herein applied for, the undersigned owners, jointly and severally, join the foregoing indemnity agreement. MUST BE SIGNED BY A CORPORATE OFFICER.” One was for the “Authorized Corporate Officer” of “MOS.” The other was for Naser. Naser signed the first and third blocks under the “applicant” and “undersigned owners” sections. Higgins signed the other on behalf of MOS. Lexon issued the bonds. Michigan Orthopedic Services filed for bankruptcy. Lexon turned to the “undersigned owners” for indemnification when the Centers for Medicare & Medicaid Services issued claims against its bonds. The district court found Naser liable for breaching the agreement. The Sixth Circuit affirmed, rejecting Naser’s denial of personal liability. View "Lexon Ins. Co. v. Naser" on Justia Law