In Five Star Electric Corp. v. Federal Ins. Co., 2015 WL 1781968 (1st Dept. 4/21/15) Five Star, a sub, recovered an arbitration award against one company of a two-company consortium. The sub sued the two co-sureties on the payment bond they had issued jointly on behalf of the consortium, and then moved for summary judgment. The motion court granted Five Star’s motion holding that the co-sureties were held collaterally estopped from challenging the arbitration award. On appeal, however, the 1st Dept. reversed finding that “Five Star would only permit [the second company in the consortium’s] participation on what could only be described as extortionate terms which [the second company] could not rationally accept. Under these circumstances, with one of the surety bond’s principals unable to participate in the underlying arbitration, the sureties cannot be collaterally estopped from contesting the result.” It looks like by overplaying its hand and insisting on extortionate terms, Five Star won the battle against a member of the consortium, but potentially lost the war to recover against the sureties.