KENNETH L. BUETTNER, Presiding Judge.

¶ 1 Defendant/Cross-Plaintiff/Appellant Burns Paving Company (Subcontractor) appeals from summary judgment granted in favor of Defendant/Cross-Defendant/Appellee First American Title & Trust Company (Surety). After Plaintiff, the City of Oklahoma City (Obligee), filed suit to recover on a subdivision bond given by Surety for Third-Party Defendant Methvin Enterprises, Inc. (Principal), Subcontractor and Surety litigated whether Subcontractor was entitled to payment on the bond from Surety. The summary judgment record shows Surety claims alterations to a subcontract exonerated its bond covering an agreement between Principal and Obligee. The rules on exoneration of a bond apply where a contract between a principal and obligee has been altered. Surety was not exonerated from liability by alterations to a subcontract between Principal and Subcontractor. Disputes of material fact as to liability of the various parties are unresolved. We reverse and remand for further proceedings.

¶ 2 This case involves a dispute over a surety's liability on a subdivision bond. Obligee sued Surety and Subcontractor, alleging Obligee approved Surety's subdivision bond for construction of paving and storm sewer improvements in Principal's "Rio De Bella Section Two" residential subdivision in Oklahoma City. The bond was given to secure Obligee's approval of the final plat. There is no dispute that Obligee acted within its statutory authority in conditioning approval of Principal's subdivision plat on a bond to ensure completion of paving and storm sewers. 11 O.S.2011 § 47-114(B).1 Principal contracted with Subcontractor to complete the paving and storm sewer improvements. Obligee alleged Subcontractor did not complete the job and Principal failed to complete the improvements by the bond's two year deadline.

¶ 3 Obligee alleged Surety ignored its demand that it pay the amount necessary to complete the improvements, which Obligee asserted was $254,607.75. Obligee maintained it would not release the bond until all necessary work was completed and all bills paid. Obligee asserted a cause of action for breach of contract against Surety.

¶ 4 Subcontractor answered and admitted Obligee's claims, but contended it did not complete the work because it was not being paid. Subcontractor made a cross-claim against Surety for payment under the bond.

¶ 5 Surety answered and denied Obligee's claims. Surety included a Third-Party Petition against Principal, in which it alleged Principal had agreed to indemnify it for any funds it paid as surety. Surety denied Subcontractor's cross-claim, arguing Subcontractor had been paid in full and that the bond was exonerated. Surety cross-claimed against Subcontractor, alleging Subcontractor failed to complete the job in a workmanlike manner. Surety demanded Subcontractor pay to have the defective paving repaired or replaced.

¶ 6 Subcontractor denied Surety's cross-claim. Subcontractor filed its Motion for Summary Judgment August 11, 2011. Subcontractor included 23 undisputed facts which it argued showed it was entitled to judgment as a matter of law.2 Subcontractor argued that Surety's bond was not exonerated because of an indemnification agreement between Surety and Principal,3 because Subcontractor did not extend the time for payment under its contract with Principal, and because Surety was compensated for the bond. Subcontractor additionally contended that its acceptance of notes and mortgages from Principal was not an accord and satisfaction, that Subcontractor was entitled to recover interest from Surety, that Obligee's issuing building permits and certificates of occupancy did not impair Surety's position, and that Surety acted in bad faith towards Subcontractor.

¶ 7 Surety filed a Cross-Motion for Summary Judgment September 9, 2011.4 Surety argued that although there were issues of fact regarding the amount and quality of Subcontractor's work, summary judgment in favor of Surety was nevertheless required based on its claim the bond was exonerated. Surety contended the bond was exonerated because Subcontractor and Principal altered their subcontract by extending the date payments were due and Subcontractor accepting partial payments, Subcontractor allowing its mechanic's and materialmen's lien to lapse, Subcontractor and Principal agreeing to add interest to amounts not paid, Subcontractor accepting a note and mortgage from Principal, and Subcontractor releasing the mortgage, all without Surety's consent.

¶ 8 Subcontractor filed its Reply September 23, 2011. Subcontractor repeated its arguments that its actions did not exonerate the bond and that its performance was approved (but not accepted) by Obligee.

¶ 9 Following a hearing, the trial court issued its Journal Entry of Summary Judgment December 12, 2011. The court denied Subcontractor's Motion for Summary Judgment and granted Surety's Cross-Motion for Summary Judgment. The court reserved Surety's cross-claims against Subcontractor and Subcontractor's defenses thereto.5 The court directed that its judgment determined all of Subcontractor's claims against Surety and certified the decision for immediate review pursuant to 12 O.S.2001 § 994(A).

¶ 10 Summary judgment proceedings are governed by Rule 13, Rules for District Courts, 12 O.S.2011, Ch. 2, App.1. Summary judgment is appropriate where the record establishes no substantial controversy of material fact and the prevailing party is entitled to judgment as a matter of law. Brown v. Alliance Real Estate Group, 1999 OK 7, 976 P.2d 1043, 1045. Summary judgment is not proper where reasonable minds could draw different inferences or conclusions from the undisputed facts. Id. Further, we must review the evidence in the light most favorable to the party opposing summary judgment. Vance v. Fed. Natl. Mortg. Assn., 1999 OK 73, 988 P.2d 1275.

¶ 11 The parties agree Principal was unable to complete the project after it became insolvent. Subcontractor alleges it stopped work after Principal stopped paying. The only issue presented in this appeal is whether Surety's liability under the bond was exonerated by alterations to the subcontract between Subcontractor and Principal.6

11 C.J.S. Bonds § 7. In this case, Principal is the obligor and the City is the obligee. "A suretyship is the result of a three-party agreement, whereby one party (the surety) becomes liable for the principal's or obligor's debt or duty to the third party obligee, Both the obligor-principal ... and the surety are liable to the obligee ..., and no suretyship exists in the absence of any of the three parties." Balboa Ins. Co. v. U.S. 775 F.2d 1158, 1160 (Fed.Cir.1985).

¶ 12 Surety contends its liability on the bond was exonerated by the conduct of Principal and Subcontractor in changing the subcontract. A surety is exonerated either by the principal performing the obligation, or by conduct of the principal which prejudices the surety.7 As shown in the cases on which Surety relies, exoneration may be found where a principal and obligee change their contract.8

72 C.J.S., Principal and Surety, § 114 (footnotes omitted, emphasis added).

¶ 13 However, in this case, Surety complains of changes to the subcontract between Principal and Subcontractor and bases its claim for exoneration on those changes. Exoneration will be found only where there are material changes to the principal contract or the contract of suretyship. In this case, Surety could claim exoneration only if it showed changes in Principal's contract with Obligee or changes in the bond agreement. Surety has not asserted either of these.

¶ 14 While Surety has cited many cases stating the rule that alteration of the underlying agreement will exonerate a surety, it has not cited authority allowing exoneration based on changes to a contract other than the underlying agreement on which the bond was made. The reason for the rule, to protect a surety from exposure to a different risk than it agreed to, is not implicated here.

¶ 15 The summary judgment record shows the bond was not exonerated by the acts alleged. The record nevertheless shows disputes of material fact as to the liability of the various parties. We therefore REVERSE AND REMAND for further proceedings.

JOPLIN, V.C.J., and GOREE, J., concur.