With no explanation, chose the best option from "A", "B", "C" or "D". damages,” to the total amount of $397,503.20. We conclude, therefore, that Great American is not liable for MUD’s actual damages caused by Underground’s breach in excess of $397,503.20, the face value of the bond. B We must determine if Great American is liable for attorneys’ fees incurred either as a result of Underground’s breach of contract or Great American’s breach of its performance bond. We turn first to the issue of Underground’s breach. In accordance with the rule that a surety’s liability on an underlying contract is limited to the penal sum of the bond, Great American is not liable for attorneys’ fees assessed against its principal in excess of the bond amount. T & R Painting Constr., Inc. v. St. Paul Fire & Marine Ins. Co., 23 Cal.App.4th 738, 29 Cal.Rptr.2d 199, 203 (1994) (<HOLDING>); Harris v. Northwestern Nat’l Ins. Co., 6

A: holding that obligee can recover from surety attorneys fees that are provided for in obligees subcontract so long as the total recovery against the surety does not exceed the penal amount of the bond
B: holding that the obligee may recover attorney fees as an element of damages only up to the limit of the penal amount of the bond
C: holding that obligee may recover attorney fees as provided in subcontract so long as total recovery does not exceed penal amount of the bond
D: holding that there is no privity of contract between the government and a surety since the government is not a party to the agreement between the surety and the contractor the government never undertakes an obligation to the surety
A.