A corporation for the development of Edydddycified Industry, a litigation taking place;

Law Firm LLC (LLC) LLC, Counsel for the defendant-appellant

Park Jong-bong et al., Counsel for the plaintiff-appellant

Law Firm Korea et al., Counsel for defendant-appellant

[Defendant-Appellee] Plaintiff 1 and 3 others

1. A. An insurance accident column refers to an indefinite accident that specifies the insurer’s obligation to pay the insurance proceeds under an insurance contract. The specific issue of an insurance accident in a performance guarantee insurance contract ought to be determined by comprehensively taking into account the insurance clauses incorporated into account the contractual terms and the details of the insurance policies and main contracts citing the insurance terms and conditions (see, e.g., Supreme Court Decision 2004Da16976, Apr. 28, 2006). If the insurance terms and conditions provide that the nonperformance of the main contract, which is not a policyholder, is not required to be located within the insurance period that specifies the nonperformance of the main contract as an insurance accident without any justifiable reason of the obligor, barring any special circumstance, is an insurance accident, and the cancellation or termination of the main contract is not an insurance accident, but is merely a requirement to exercise the right to claim the insurance proceeds (see, e.g., Supreme Court Decision 2013Da27978, Jul. 24, 2014).

B. Whether a contractor’s contractual failure to perform an insurance accident constitutes an insurance accident under a contract for construction works ought to be determined on the basis of the agreed contract amount of construction works, construction period, construction contents, etc. (see, e.g., Supreme Court Decision 86Da216, Jun. 9, 1987). Even if an application was filed during the contract period, such circumstance alone does not readily conclude that the performance of the contract was impossible due to its own fault. Determination of whether the contract was impossible should be made by comprehensively taking into account all the circumstances, such as the degree of performance of the contract before and after the application for commencement of rehabilitation procedures, the cause leading to the application for commencement of rehabilitation procedures, the continuation or resumption of business after the application for commencement of rehabilitation procedures, and the financial condition for the performance of the contract (see, e.g., Supreme Court Decision 2004Da16976, Jun. 28, 2006).

2. Review of the reasoning of the original judgment and the duly admitted evidence reveals the following facts.

A. On June 10, 2013, the Plaintiff entered into a subcontract agreement with the Intervenor’s assistant participant (hereinafter “the Intervenor”). In cases where it is clearly acknowledged that the landscaping planting construction among the Plaintiff’s main office construction project is not completed within the period due to the Intervenor’s failure to pay the contract amount, KRW 346,181,901, contract deposit, KRW 34,618,190, and the contract term from June 10, 2013 to March 15, 2014, the subcontract agreement was concluded with the Intervenor (hereinafter “instant subcontract agreement”). The terms and conditions of the contract and the contract terms related to the termination, etc. of the instant subcontract are as follows: (a) where it is deemed evident that the Plaintiff may not complete the contract bond within the period due to the Intervenor’s cause attributable to the Intervenor, such as bankruptcy and bankruptcy; (b) where the Plaintiff fails to perform the contract within the period due to a significant period of time after the Plaintiff’s request for commencement of the contract; (c) where the Plaintiff’s request for cancellation or termination of the contract was made within six (2).

B. On July 11, 2013, Defendant entered into a performance guarantee agreement with the Intervenor (hereinafter “instant performance guarantee agreement”) and issued a contract guarantee agreement to the period from June 10, 2013 to May 14, 2014 (in light of the record, the original judgment is written as of March 15, 2014). The provision related to insurance accidents and compensation in the ordinary terms of the performance guarantee insurance contract of this case is as follows. 1) If the obligor, the obligee, fails to perform his/her obligations as stipulated in the contract (main contract) stated in the insurance policy, and the obligee, is compensated for the loss incurred to the obligee, in accordance with the terms and conditions of this case (Article 6(2)) to the obligee, and if the insured does not cancel or terminate the insurance contract without any justifiable reason, Article 8(1)(3) of the Insurance Contract before the cancellation or termination of the insurance contract (Article 8(2) of the Insurance Contract).

C. On August 26, 2013, the Intervenor filed an application for commencing rehabilitation procedures with the Suwon District Court (the original judgment is written on August 28, 2013, but it is clear that it is a clerical error in light of the record). On September 6, 2013, the Intervenor notified the Intervenor that the subcontract contract should be terminated in accordance with Article 25 of the General Conditions of the Contracts and Article 6 of the Special Conditions of the Contracts, and on March 18, 2014, the Intervenor claimed insurance money to the Defendant on March 18, 2014.

A. The terms and conditions of the instant performance guarantee insurance contract stipulate that the Intervenor’s non-performance of the contract without any justifiable ground as an insurance accident does not require the termination and termination of the prime contract. In light of the foregoing, it is reasonable to deem that the Intervenor’s non-performance of the instant subcontract contract without justifiable grounds is an insurance accident under the performance guarantee insurance contract of this case.

B. Article 6(1)2 of the terms and conditions of the instant subcontract agreement incorporated into the instant subcontract agreement provides that the Plaintiff may terminate the instant subcontract agreement if the Intervenor applied for rehabilitation procedures, and the contract deposit equivalent to the Plaintiff’s losses, shall be reverted to the Plaintiff. However, this reserved the right to terminate the contract so that the Plaintiff may terminate the contract if a certain cause arises, regardless of the Intervenor’s nonperformance of obligations. Therefore, even if the Intervenor applied for commencement of rehabilitation procedures during the contract period, it is merely merely an occurrence of a cause for termination of the contract, and it cannot be said that the Intervenor did not have any nonperformance of obligations under the contract, which is an insurance risk. This is likewise true even if the Plaintiff and the Intervenor had agreed on the contract deposit reverted to the foregoing. In so determining, the lower court erred by misapprehending the legal doctrine as to whether the Intervenor did not perform the instant subcontract contract during the period of the Intervenor’s performance of the contract, thereby failing to exhaust all necessary deliberations on the grounds that the Intervenor did not perform the obligation under the instant agreement before and after the commencement of rehabilitation procedures.

4. Therefore, without further proceeding to decide on the remaining grounds of appeal, the part against the defendant among the judgment below against the defendant is reversed, and that part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik

Justices Park Jung-hwa-hwa

Justices Kim Jong-soo