Jarrod W. Stone

Jarrod W. Stone is a Shareholder with Manier & Herod, where he is the Head of the firm’s Surety and Fidelity Department.  Mr. Stone practices in the areas of surety law, fidelity law, construction law, insurance law, and general commercial law.  He also represents sureties in distressed contractor transactions and workouts, intercreditor transactions, surety credit facilities, bankruptcies, performance bond defaults, payment bond claims, and virtually every aspect of surety law.

Mr. Stone received his B.S. (2001), magna cum laude, from Middle Tennessee State University. He received his J.D. (2004), summa cum laude, Order of the Coif, and Order of Barristers from the University of Tennessee College of Law. While at the College of Law, Mr. Stone competed on the National Moot Court Team, for which he was awarded the Susan B. Devitt National Moot Court Award. He also competed on the College of Law’s National Trial Team, for which he received a Medal for Excellence in Advocacy from the American College of Trial Lawyers. Mr. Stone also twice won the College of Law’s Advocate’s Prize Moot Court Competition.

Mr. Stone was admitted to practice in Tennessee in 2004 and was subsequently admitted to practice in Kentucky in 2011 and in Ohio in 2016.  Mr. Stone is admitted to practice in all federal courts in Tennessee, Kentucky, Ohio, Indiana, and Arkansas.  Mr. Stone has represented sureties and fidelity insurers in relation to disputes arising in a number of states including Alabama, Arkansas, Florida, Georgia, Indiana, Illinois, Iowa, Kentucky, Louisiana, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Mr. Stone is also a frequent author and presenter on topics related to surety, fidelity, and insurance coverage law.  He Co-Chaired the Surety Program at the ABA Fidelity and Surety Law Committee’s 2016 Midwinter Meeting held in New York in January 2016.  Mr. Stone also Co-Chaired the 2013 Southern Surety and Fidelity Claims Conference in Charleston, South Carolina.  He also often conducts in-house seminars and CE presentations for his clients.

Litigation Accomplishments

  • Obtained summary judgment in surety’s favor on its contractual indemnity claims where principal/indemnitors argued that California’s statute of limitations barred the surety’s claims, argued that the surety acted in bad faith by settling the obligee’s performance bond claims over their objections, and argued that the surety’s attorneys’ fees and costs were unreasonable — S. Specialty Insurance Company v. Mitchell & Everett Construction, Inc., et al., Chancery Court for Davidson County, Tennessee, Case No. 15-1485-IV
  • Obtained order striking an indemnitor’s defenses and entering a non-dischargeable judgment in the surety’s favor based upon the indemnitor’s willful and repeated refusal to comply with discovery orders in an adversary proceeding in which the surety sought a determination of dischargeability of the indemnitor’s debt based upon his misuse of trust funds (e., bonded contract proceeds) — In re Garibay, 2017 WL 2637746 (Bankr. E.D. Tenn. June 19, 2017)
  • Obtained summary judgment under Tennessee law relative to surety’s contractual indemnity claims against its indemnitors where the indemnitors argued that the surety paid excessive amounts to a completion contractor after the surety took over and completed two bonded projects, argued that the principal was not actually liable for certain payments made to payment bond claimants, and argued that their indemnity obligations should be limited in light of their limited involvement in the principal’s operations — Westfield Ins. Co. v. Rainey Contracting, LLC, 2017 WL 2484273 (E.D. Tenn. June 8, 2017) (currently on appeal at Sixth Circuit)
  • Obtained summary judgment under Kentucky law relative to surety’s contractual indemnity claims against its principal/indemnitors — Ohio Farmers Ins. Co. v. Charlie’s Elec. Serv., Inc., 2017 WL 1380470 (W.D. Ky. Apr. 14, 2017)
  • Obtained ruling that surety’s motor vehicle dealer bond does not cover losses that a credit union sustained as a result of the dealer’s failure to pay off the credit union’s lien on a vehicle that was traded-in to the dealership — Great Am. Ins. Co. v. Music City Wholesale, LLC, et al., Chancery Court for Davidson County, Tennessee, Case No. 15-0626-II
  • Obtained entry of preliminary injunction compelling the principal and indemnitor to deposit $50,000 into the Court’s Registry pending the determination of various unresolved claims against the surety’s motor vehicle dealer bond with any remaining funds to be applied to the surety’s losses, expenses, and fees — Great Am. Ins. Co. v. Music City Wholesale, LLC, et al., Chancery Court for Davidson County, Tennessee, Case No. 15-0626-II
  • Obtained verdict in favor of surety following bench trial under Arkansas relative to surety’s contractual indemnity claims where principal/indemnitors argued that the surety ignored the principal’s defenses to payment bond claims, argued that the principal was not actually liable for amounts paid to payment bond claimants, and argued that the surety had acted in bad faith relative to is investigation/resolution of payment bond claims — RLI Ins. Co. v. Samco Constr. Co., et al., U.S. District Court for Eastern District of Arkansas, Case No. 4:14-CV-00217-BRW
  • Obtained ruling that “trust fund” provision of indemnity agreement was sufficient to create an express trust under Tennessee law, which rendered bonded contract proceeds to be immune from bank’s common law setoff rights against the principal and could subject bank to surety for conversion ­— Selective Ins. Co. of Am. v. Envtl., Safety & Health, Inc., et al., 2015 WL 914824 (E.D. Tenn. Mar 3, 2015)
  • Obtained entry of preliminary injunction compelling, among other things, the principal to direct all bonded contract proceeds to be paid directly to the surety despite the assertion by the principal’s secured lender that such bonded contract proceeds were subject to the lender’s prior perfected security interest in the principal’s accounts — Selective Ins. Co. of Am. v. Envtl., Safety & Health, Inc., et al., 2015 WL 914824 (E.D. Tenn. Mar 3, 2015)
  • Obtained summary judgment in surety’s favor under Arkansas law relative to public obligee’s performance bond claim where, following default/termination of principal, obligee unilaterally performed/remediated principal’s work, released payment to principal following termination, later attempted to rescind default/termination, and perfunctorily attempted to comply with conditions precedent contained in A312 performance bond — Arkansas State Univ. – Jonesboro v. Philadelphia Indem. Ins. Co., et al., Circuit Court for Craighead County, Arkansas, Case No. CV-2013-259(PH)
  • Obtained complete defense verdict in favor of surety after 27 day bench trial relative to subcontractor’s claims against surety in excess of $1,000,000 for unpaid materials, extended overhead, attorneys’ fees, prejudgment interest, and penalties arising from principal’s alleged breach of subcontract, breach of covenant of good faith and fair dealing, intentional fraud, and violation of the Tennessee Misapplication Statute, including rulings that the combination performance/payment bond did not cover costs of materials subcontractor refused to deliver to principal, extended overhead, penalties imposed under the Misapplication Statute, or damages arising from principal’s tortious conduct — National Door & Hardware, Inc. v. Ohio Farmers Ins. Co., et al., Chancery Court for Davidson County, Tennessee, Case No. 08-14008, Div. III
  • Obtained preliminary injunction compelling principal and indemnitors to deposit collateral with surety totaling $427,556.46 where principal asserted that it was not in default under bonded contract and principal asserted that surety acted in bad faith by agreeing to complete bonded contract over the objection of principal/indemnitors — Int’l Fid. Ins. Co. v. Solutions to Every Problem, Inc., 2012 WL 2576775 (E.D. Tenn. July 3, 2012)
  • Obtained preliminary injunction compelling principal and indemnitors to deposit collateral with surety totaling $6,604,328.21 — Hanover Ins. Co. v. Holley Constr. Co. & Assoc., Inc., et al., 2012 WL 398135 (M.D. Ga. Feb. 12, 2012)
  • Obtained preliminary injunction compelling principal and indemnitors to deposit collateral with surety totaling $1,000,000 — Great Am. Ins. Co. v. SRS, In, et al., 2011 WL 6754072 (M.D. Tenn. Dec. 23, 2011)
  • Obtained summary judgment in surety’s favor on its fraudulent transfer claim where indemnitor claimed that she transferred her inheritance to a limited partnership to protect it from her husband in their divorce proceeding — Hartford Fire Ins. Co. v. CMC Constr. Co., et al., United States District Court for Eastern District of Tennessee, Case No. 3:06-CV-00011
  • Obtained summary judgment in surety’s favor on its indemnity claim where indemnitor alleged that indemnity agreement was an agreement of adhesion, that indemnitor’s execution of indemnity agreement was procedurally unconscionable, that surety had fraudulently induced indemnitor to sign indemnity agreement, that surety failed to keep indemnitor apprised of investigation/settlement of claims, that surety owed indemnitor a fiduciary duty under indemnity agreement, and that indemnity agreement violated Tennessee’s public policy — Hartford Fire Ins. Co. v. CMC Constr. Co., et al., 2010 WL 3338581 (E.D. Tenn. Aug. 24, 2010)
  • Obtained summary judgment on behalf of fidelity insurer under employee theft provision where insured sought to recover funds it expended to reimburse its president for personal funds an employee of the insured had embezzled from the president — Loeb Properties, Inc. v. Federal Ins. Co., 663 F. Supp. 2d 640 (W.D. Tenn. 2009)
  • Obtained summary judgment in surety’s favor where obligee attempted to assert claim under payment bond and subcontractors/suppliers asserted claims against surety relative to labor/materials they supplied directly to the obligee (as opposed to the principal) — Travelers Cas. & Sur. Co. of Am. v. East Beach Development, LLC, 2008 WL 3211306 (S.D. Ala. Aug. 7, 2008)
  • Obtained summary judgment in surety’s favor on obligee’s performance bond claim where obligee failed to satisfy conditions precedent contained A312 Performance Bond and obligee’s unilateral repair/design of parking lot deprived surety of opportunity to exercise any of its performance options — The Town of Pegram v. Nat’l Grange Mutual Ins. Co., Chancery Court for Cheatham County, Tennessee, Case No. 12946
  • Obtained dismissal of obligee’s claims against surety sounding in breach of contract, fraud, misrepresentation, conversion, negligence, and violation of Tennessee’s Consumer Protection Act — Breath of Life Christian Ctr. v. Capstone, et al., Circuit Court for Shelby County, Tennessee, Case No. CT-005381-06, Div. IX
  • Negotiated favorable resolution of surety’s claims against obligee and obligee’s engineer of record to recover costs that surety had to incur to remediate work for which obligee had previously paid principal (e., surety’s affirmative overpayment claim against obligee) — Developers Surety & Indemn. Co. v. City of Plainview, Tennessee, United States District Court for the Eastern District of Tennessee, Case No. 3:10-CV-93
  • Obtained dismissal of obligee’s punitive damage claim against surety under North Carolina law where obligee alleged that surety “willfully failed to investigate [obligee’s performance bond] claim” and that surety breached “a contractual and common law duty to investigate and respond to [obligee’s performance bond] claim in good faith” — Housing Authority of the City of Rocky Mount, North Carolina v. Pacific Indem. Co., et al, General Court of Justice, Superior Court Division, for Edgecombe County, North Carolina, Case No. 07 CVS 207
  • Obtained summary judgment in surety’s favor under Ohio law where payment bond claimant sought to hold surety liable for penal interest and attorneys’ fees that had been imposed upon principal in a separate lawsuit under Ohio’s Prompt Pay Act — John K. Leohner Co. v. St. Paul Fire & Marine Ins. Co., Court of Common Pleas for Fairfield County, Ohio, Case No. 2007CV1325
  • Obtained dismissal of indemnitors’ counterclaim against surety that was premised upon breach of the implied covenant of good faith and fair dealing under an indemnity agreement where surety allegedly failed to adequately investigate the obligee’s performance bond claim, failed to assert certain defenses to the obligee’s performance bond claim, failed to cooperate with indemnitors, volunteered payment to obligee over the objections of indemnitors, and failed to preserve collateral — Selective Ins. Co. of Am. v. City of Knoxville, Tennessee, et al., Chancery Court for Knoxville, Tennessee, Case No. 164347-3
  • Obtained summary judgment in surety’s favor under motor vehicle dealer’s bond where dealer’s floorplan lender attempted to recover the value of purchase money security interests the lender held in the vehicles at issue, asserted a claim of common law bad faith, and asserted a claim under the Tennessee Consumer Protection Act — Melinese Tyms, et al. v. Great American Ins. Co., Chancery Court for Memphis, Tennessee, Case No. CH-09-1778-3
  • Obtained dismissal of claims against local high school principal where two students alleged that principal committed negligence, gross negligence, outrageous conduct, and “intentional and tortious inference of the parent/child relationship” — Mary Doe, et al. v. Metropolitan Davidson County Government, et al., Circuit Court for Davidson County, Tennessee, Case No. 05C-1688
  • Obtained summary judgment in employer’s favor in relation to employee’s retaliatory discharge claim — Sykes v. Commodore Express, Inc., Circuit Court for Rutherford County, Tennessee, Case No. 50404
  • Obtained summary judgment in employer’s favor in relation to employee’s retaliatory discharge claim — Arnett v. CMH Services, Inc., Circuit Court for Giles County, Tennessee, Case No. CC-10848
  • Obtained summary judgment in favor of owner of grocery store where customer was injured in parking lot of shopping center owned by landlord of grocery store — McDonald v. E.W. James & Sons, Inc., Circuit Court for Weakley County, Tennessee, Case No. 4104

Publications

  • Author – Who Gets **IT? – Priority of Security Interests in Collateral, Southern Surety and Fidelity Claims Conference 2017, Nashville, Tennessee.
  • Author – Federal Acquisition Regulation 101, American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2017 Midwinter Meeting, New Orleans, Louisiana.
  • Co-Author – Chapter 3 (The Construction Contract Provisions Critical to the Performing Surety: Scope of Work, Contract Price and Payment and Time of Completion), Bond Default Manual (J. Blake Wilcox, Mike R. Pipkin, Carol Smith, Thomas J. Vollbrecht, eds. American Bar Association 4th ed. 2015).
  • Author – Chapter 13 (Common Obligee Theory and Other Setoff Rights – The Subrogation Rights to the Obligee’s or Principal’s Setoff Rights), The Contract Bond Surety’s Subrogation Rights (George J. Backrach, James D. Ferrucci, Dennis J. Bartlett, eds., American Bar Association 2013).
  • Author – Surety Law Update, Southern Surety and Fidelity Claims Conference 2013, Charleston, South Carolina.
  • Author – When is it Over? Theories for Eliminating, or at Least Reducing, a Surety’s Liability for Latent Defects that are Discovered After Final Completion and Acceptance of the Bonded Contract, Southern Surety and Fidelity Claims Conference 2012, Clearwater Beach, Florida.
  • Author – Surety Law Update, Southern Surety and Fidelity Claims Conference 2011, New Orleans, Louisiana.
  • Co-Author – The Contract Document Provisions Relating to the Time of Completion, American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2011 Midwinter Meeting, New York, New York.
  • Co-Author – Back to the Future: Has Bramble Revived the A311 Bonds and Do We Really Want to Go There?, Southern Surety and Fidelity Claims Conference 2011, Tampa Florida.
  • Co-Author – Chapter 13 (The Surety’s Common Law and Contractual Rights of Indemnity), The Law of Payment Bonds (Kevin L. Lybeck, Wayne D. Lambert, John E. Sebastian, eds., American Bar Association 2d ed. 2011).
  • Contributing Author – Chapter 3 (Documents and Agreements Related to the Indemnity Agreement), The Surety’s Indemnity Agreement (Marilyn Klinger, George J. Bachrach, Tracy L. Haley, eds., American Bar Association 2d ed. 2008).
  • Contributing Author – Tennessee Chapter, Payment Bond Manual (Wayne D. Lambert, Todd R. Braggings, J. Blake Wilcox, eds., American Bar Association 3d ed. 2006).
  • Contributing Author – Take it or Leave it? The Surety’s Right of Rescission, 2005 International Association of Defense Counsel Conference, New York, New York.

Speaking Engagements

  • Speaker – Who Gets **IT? – Priority of Security Interests in Collateral, Southern Surety and Fidelity Claims Conference 2017, Nashville, Tennessee.
  • Speaker – Federal Acquisition Regulation 101, American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2017 Midwinter Meeting, New Orleans, Louisiana
  • Speaker – Holding Banks Accountable for Sweeping Bonded Contract Proceeds – Philadelphia Surety Claims Association March 2016 Meeting, Philadelphia, Pennsylvania.
  • Co-Chair – Surety Program for American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2016 Midwinter Meeting, New York, New York.
  • Speaker – Holding Banks Accountable for Sweeping Bonded Contract Proceeds – Atlanta Surety Claims Association November 2015 Meeting, Atlanta, Georgia.
  • Speaker – Protecting the Penal Sum – National Bond Claims Association October 2015 Meeting, Pinehurst, North Carolina.
  • Speaker – Holding Banks Accountable for Sweeping Bonded Contract Proceeds – Midwest Surety & Construction Claims Conference 2015, Chicago, Illinois.
  • Speaker – The Construction Contract Provisions Critical to the Performing Surety – American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2015 Spring Meeting, LaJolla, California.
  • Speaker – Surety Rights Contained in General Agreement of Indemnity: Collateralization of the Surety – Southern Surety and Fidelity Claims Conference 2015, Clearwater Beach, Florida.
  • Speaker – Protecting the Penal Sum – Midwest Surety & Construction Claims Conference 2014, Chicago, Illinois.
  • Speaker – Protecting the Penal Sum – American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2014 Spring Meeting, Louisville, Kentucky.
  • Speaker – What is a Default?, Southern Surety and Fidelity Claims Conference 2014, New Orleans, Louisiana.
  • Speaker – Common Obligee Theory and Other Setoff Rights – American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2013 Spring Meeting, Orlando, Florida.
  • Co-Chair – Southern Surety and Fidelity Claims Conference 2013, Charleston, South Carolina.
  • Speaker – Surety Law Update, Southern Surety and Fidelity Claims Conference 2013, Charleston, South Carolina.
  • Speaker – When is it Over? Theories for Eliminating, or at Least Reducing, a Surety’s Liability for Latent Defects that are Discovered After Final Completion and Acceptance of the Bonded Contract, Southern Surety and Fidelity Claims Conference 2012, Clearwater Beach, Florida.
  • Speaker – Surety Law Update, Southern Surety and Fidelity Claims Conference 2011, New Orleans, Louisiana.
  • Speaker – The Contract Document Provisions Relating to the Time of Completion, American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2011 Midwinter Meeting, New York, New York.
  • Speaker – Back to the Future: Has Bramble Revived the A311 Bonds and Do We Really Want to Go There?, Southern Surety and Fidelity Claims Conference 2011, Tampa Florida.
  • Speaker – The Surety’s Common Law and Contractual Rights of Indemnity – American Bar Association, Tort and Trial Practice Section, Fidelity and Surety Law Committee, 2011 Spring Meeting, Lake Geneva, Wisconsin.
  • Speaker – Surety Law Update, Southern Surety and Fidelity Claims Conference 2005, Clearwater Beach, Florida.

News & Upcoming Speaking Engagements:

Certifications of Specialization are available to Tennessee lawyers in all areas of practice relating to or included in the areas of Civil Trial, Criminal Trial, Business Bankruptcy, Consumer Bankruptcy, Creditors’ Rights, Medical Malpractice, Legal Malpractice, Accounting Malpractice, Elder Law, and Estate Planning. Listing of related or included practice areas herein does not constitute or imply a representation of Certification.