Or even condition collateral on receipt of some sort of notice from the Department of Homeland Security. Compare Am. Motorists Ins. Co. v. United Furnace Co. , 876 F.2d 293, 301 (2d Cir. 1989) (discussing a "collateral security provision," which "provided that the triggering event would be ... the making of a ‘demand’ by the United States against" a surety); Hanover Ins. Co. v. Clark , No. 05-C-2162, 2006 WL 2375428, at *6 (N.D. Ill. Aug. 15, 2006) (interpreting an agreement that required payments "as soon as liability exists or is asserted against the Surety"). The parties did none of that.

Courts have granted motions for summary judgment in favor of a surety for specific performance of the collateral security obligation of an indemnity agreement. The Hanover Ins. Co. v. Clark, No. 5 C 2162, 2006 WL 2375428, at * 6 (N.D. Ill. Aug. 15, 2006) (citing Am. Motorists Ins. Co. v. United Furnace Co., Inc., 876 F.2d 293, 299-300 (2d Cir. 1989); Safeco Ins. Co. v. Schwab, 739 F.2d 431, 433-34 (9th Cir. 1984)); United States Fid. Guar. Ins. Co. v. Cler Constr.Servs., Inc., No. 03 C 1405, 2003 WL 22508169, at *2 (N.D. Ill. Nov. 3, 2003); Am. Motorists Ins. Co. v. Pennsylvania Beads Corp., 983 F. Supp. 437, 439-40 (S.D.N.Y. 1997); Mountbatten Sur. Co. v. Szabo Contracting, Inc., 812 N.E.2d 90 (Ill.Ct.App. 2004). Courts have traditionally analyzed the plain language of the indemnity agreement to determine a surety's right to obtain the collateral security. See, e.g., United Furnace Co., Inc., 876 F.2d at 299-300; Safeco, 739 F.2d at 433-34 (holding that an indemnity agreement with a surety should be construed as requiring the indemnitor to provide collateral security upon demand by the surety and prior to actual bond loss); Hanover, 2006 WL 2375428 at *6; see also 3 Bruner O'Connor on Constr. Law § 10:103, n. 6.

Under New York contract law, sureties may seek enforcement of collateral security provisions in summary judgment proceedings even if the surety has yet to accrue any loss. See Am. Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 302 (2d Cir. 1989) (concluding that a surety was entitled to partial summary judgment on the issue of its entitlement to collateral security where the parties agreed that the contract was valid). Specific enforcement of collateral security agreements is necessary "to protect the surety's bargain under an indemnity agreement."

Under New York law, Plaintiff has established a likelihood of success on the merits of its claim for specific performance of the Collateral Deposit Provision. New York courts routinely award sureties specific performance of similar collateral security provisions where the terms of the provision are clear and unambiguous. E.g., Safeco Ins. Co. of Am. v. Hirani/MES, JV., 480 F. App'x 606, 608 (2d Cir. 2012); Travelers Cas. & Sur. Co. v. Dale, 542 F. Supp. 2d 260, 264 (S.D.N.Y. 2008); Am. Home Assur. Co. v. Peter Gun, Inc., No. 98 Civ. 6970, 1999 WL 672569, at *2 (S.D.N.Y. Aug. 26, 1999); Am. Motorists Ins. Co. v. Pa. Beads Corp., 983 F. Supp. 437, 439-40 (S.D.N.Y. 1997); see also Am. Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 299-300 (2d Cir. 1989) (reversing the district court's dismissal based on its finding that the unambiguous contract provision gave the surety a cause of action for collateral security). The Court applies New York law in accordance with the Agreement's choice-of-law provision.

(Judd Aff., Ex. B, Art. IV). New York courts have upheld the validity of such collateral security provisions, even when the surety's loss has yet to be finalized. Travelers Cas. Sur. Co. v. Dale, 542 F. Supp. 2d 260, 263-64 (S.D.N.Y. 2008) ("[a] collateral security provision in an indemnity agreement, which is clear and unambiguous . . . that imposes upon an indemnitor . . . an obligation to provide a surety collateral security after the surety has received a demand . . . [from the owner], and prior to any actual bond loss, is valid and enforceable.") (quoting Amer. Motorists Ins. Co. v. United Furnace Co., Inc., 876 F.2d 293, 299 (2d Cir. 1989)). See also United States Fid. and Guar. Co. v. J. United Elec. Contracting Corp., 62 F. Supp. 2d 915, 922 (E.D.N.Y. 1999) ("Courts in New York have routinely upheld the validity of collateral security clauses and enforced their terms.)

U.S. Fid. Guar. Ins. Co. v. Cler Constr. Servs., Inc., No. 03 C 1405, 2003 WL 22508169, at *2 (N.D. Ill. Nov. 3, 2003); see also Mountbatten Sur. Co. v. Szabo Contracting, Inc., 349 Ill. App. 3d 857, 812 N.E.2d 90 (2d Dist. 2004) (granting surety's motion for summary judgment partly on grounds of defendant's failure to comply with surety's demand for a collateral deposit, which constituted a default subject to injunctive relief under the indemnity agreement). Courts have traditionally analyzed the plain language of the indemnity agreement to determine a surety's right to obtain specific performance of collateral security. See, e.g., American Motorists Ins. Co. v. United Furnace Co., Inc., 876 F.2d 293, 299-300 (2d Cir. 1989); see also Safeco Ins. Co. v. Schwab, 739 F.2d 431, 433-34 (9th Cir. 1984) (holding that an indemnity agreement with a surety should be construed as requiring the indemnitor to provide collateral security upon demand by the surety and prior to actual bond loss). In American Motorists, the Second Circuit reversed the trial court's denial of the plaintiff's request for specific performance of the collateral security provision of its indemnity agreement with the defendant.

More importantly, paragraph III(B) of the agreement unambiguously requires J. United and Jerry Sarabella to post collateral security upon demand, when required to exonerate or indemnify the Sureties. Courts in New York have routinely upheld the validity of collateral security clauses and enforced their terms. See American Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 302 (2d Cir. 1989); American Motorists Ins. Co. v. Pennsylvania Beads Corp., 983 F. Supp. 437, 440 (S.D.N.Y. 1997); BIB Constr. Co. v. Fireman's Ins. Co., 214 A.D.2d 521, 522-23, 625 N.Y.S.2d 550, 552 (1st Dep't 1995); see also Safeco Ins. Co. v. Schwab, 739 F.2d 431, 433 (9th Cir. 1984). In upholding a clause similar to paragraph III(B) which required the posting of collateral upon demand by the surety, the Appellate Division, First Department, held that such a collateral security clause is enforceable as long as the amount demanded by a surety is reasonable and the transaction is "at arm's length with relative equality of bargaining power."

See Barhold v. Rodriguez, 863 F.2d 233, 237 (2d Cir. 1988) ("[A]s we have jurisdiction to decide [the appellants'] appeal from the granting of [the appellees'] motion for summary judgment, we exercise our discretion to decide [the appellants'] claim of error in the denial of their summary judgment motion as well."); see also Gary Friedrich Enters., LLC v. Marvel Characters, Inc., 716 F.3d 302, 320 (2d Cir. 2013) ("Because we have jurisdiction over the grant of summary judgment, we have the discretion to review the otherwise unappealable order denying [the appellants'] cross-motion for summary judgment." (citing Barhold, 863 F.2d at 237)); see also Am. Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 302 (2d Cir. 1989) (citing Barhold, 863 F.2d at 237) (similar).Gold does not compel a different result here.

Abend merely applied a longstanding exception to the general rule, based on the familiar principle that interlocutory orders merge into final judgments. See High Tech Gays v. Defense Indus. Sec. Clearance Office, 895 F.2d 563, 574 n. 11 (9th Cir. 1990) ("[B]ecause we have jurisdiction to decide [defendant's] appeal from the granting of plaintiffs' motion for summary judgment, we exercise our discretion to decide their claim of error in the denial of their summary judgment motion as well."); Moran v. Aetna Life Ins. Co., 872 F.2d 296, 301 (9th Cir. 1989) ("The denial of a summary judgment order is appealable after the entry of a final judgment."); see also Peyton v. Reynolds Assocs., 955 F.2d 247, 253 (4th Cir. 1992); American Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 302 (2d Cir. 1989); Barhold v. Rodriguez, 863 F.2d 233, 237 (2d Cir. 1988); Placid Oil Co. v. Ashland Oil, Inc., 792 F.2d 1127, 1133-34 (Temp.Emer.Ct.App. 1986); Morgan Guaranty Trust Co. v. Martin, 466 F.2d 593, 599-600 n. 9 (7th Cir. 1972) (per curiam). See generally 15B C. Wright, A. Miller E. Cooper, Federal Practice and Procedure § 3914.28, at 213 (2d ed. 1991) ("The better cases recognize that on appeal from a final judgment an earlier denial of summary judgment can be reviewed if it becomes relevant upon disposition of other issues and if the record is sufficiently developed to support intelligent review.").

The Second Circuit has held that when a court inquires into the ripeness of claims under an indemnity agreement, the court should "give effect to the intentions of the parties, as manifested in the indemnification agreement viewed in its entirety." Am. Motorists Ins. Co. v. United Furnace Co., 876 F.2d 293, 299 (2d Cir. 1989). "[S]ureties draft their indemnity agreements broadly, and with extensive protections, and the courts . . . consistently enforce the agreements and the remedies granted to the sureties."