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Great American Insurance Co v. Brewer

United States District Court, M.D. Florida, Orlando Division

August 17, 2017



          Roy B. Dalton Jr. United States District Judge.

         This matter is before the Court on the following: (1) Plaintiff's Motion for Summary Judgment (Dispositive Motion) and Memorandum of Law in Support (Doc. 62); (2) Defendants' Response to Plaintiff's Motion for Summary Judgment (Dispositive Motion) and Memorandum of Law in Support (Doc. 69); and (3) Plaintiff's Reply in Support of Motion for Summary Judgment Against the Defendants (Doc. 70).


         Plaintiff Great American Insurance Company initiated this action against Defendants Brewer Paving and Development, Inc. (“BPDI”), Billy J. Brewer and Deborah Brewer to enforce its rights under an agreement of indemnity. (See Doc. 14; Doc. 15-1, pp. 1-9 (“Indemnity Agreement”).) Although Defendants admit that they entered into the Indemnity Agreement (Doc. 19, ¶ 8), and they “have failed and refused to indemnify [Plaintiff] or to deposit collateral security as required under the Indemnity Agreement” (id. ¶ 21), they also allege that Plaintiff's claims are “barred by the Doctrine of Bad Faith” (“Bad Faith Defense”) (id. ¶¶ 30-33, 44-47, 53-56). Plaintiff now moves for summary judgment in its favor on its claims for breach of contact (Count II) and specific performance (Count I). (Doc. 62 (“Motion”).) Defendants responded to the Motion (Doc. 69 (“Response”)), and Plaintiff replied (Doc. 70 (“Reply”)).

         Legal Standards

         Under the Federal Rules of Civil Procedure, “[a] party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought.” Fed.R.Civ.P. 56(a). The movant has the initial burden of establishing that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id.; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Penley v. Eslinger, 605 F.3d 843, 848-49 (11th Cir. 2010). To meet this burden, the movant must: (1) cite “to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials; or” (2) show “that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence” of a genuine dispute. Fed. R. Civ P. 56(c)(1).

         If the movant meets its initial burden, then the Court must enter summary judgment unless the non-movant shows that a genuine issue of material fact remains for trial. See Divine Motel Grp., LLC v. Rockhill Ins. Co., 655 F. App'x 779, 781 (11th Cir. 2016)(quoting Scott v. Harris, 550 U.S. 372, 380 (2007)). What facts are “material” depends on the substantive law applicable to the case.[1] See id.; Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir. 2004). An issue of fact is “genuine” if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party. Hickson, 357 F.3d at 1260. “An issue is not ‘genuine' if it is unsupported by the evidence or is created by evidence that is ‘merely colorable' or ‘not significantly probative.'” Baloco v. Drummond Co., Inc., 767 F.3d 1229, 1246 (11th Cir. 2014).

         In resolving motions for summary judgment, courts must not make credibility assessments or weigh conflicting evidence. See Hairston v. Gainesville Sun Pub. Co., 9 F.3d 913, 919 (11th Cir. 1993). Rather, courts must: (1) view the record evidence in the light most favorable to the non-moving party; and (2) draw all reasonable inferences in favor of the non-moving party. See White v. Pauly, 137 S.Ct. 548, 550 (2017); see infra n.2. If a reasonable fact finder could draw more than one inference from the facts and that inference creates an issue of material fact, a court must not grant summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         The Facts[2]

         I. The Indemnity Agreement

         Under the terms of the Indemnity Agreement, Defendants agreed to be liable for losses and expenses incurred by Plaintiff because of its issuance of construction bonds to Defendants or the Defendants' breach of the Indemnity Agreement:[3]

The [Defendants] jointly, severally and/or collectively shall exonerate, indemnify, hold harmless, and keep [Plaintiff] indemnified from and against any and all liability for losses, costs, and/or expenses of whatsoever kind or nature (including, but not limited to, interest, court costs, consultant or expert fees, and counsel fees) and from any against any and all such losses and/or expenses which the [Plaintiff] may sustain and incur:
(1) By reason of having executed or procured the execution of Bonds on behalf of any of the [Defendants;]
(2) By reason of the failure of the [Defendants] to perform or comply with any of the covenants and conditions of this [Indemnity] Agreement[;] or
(3) In enforcing any of the terms, covenants, obligations, or conditions of this [Indemnity] Agreement.

(Doc. 62-1, p. 1; see id. at 6 (“By executing this [Indemnity] Agreement [Defendants] are bound jointly, severally, and/or collectively to the [Plaintiff] with respect to all Bonds . . . to be executed, provided or procured by [Plaintiff] at any time in behalf of any of the [Defendants], and with respect to all undertakings of this [Indemnity] Agreement.”).)

         The Indemnity Agreement also required that Defendants pay for losses, costs, and expense incurred by Plaintiff after taking over Defendants' obligations under any agreement covered by a bond issued by Plaintiff:

In the event of any breach, delay or default asserted [against Defendants] in connection with any Bond or any contract covered by the Bond . . . the [Plaintiff] shall have the right, but not the obligation, at its option and in its sole discretion, and is hereby authorized with or without exercising any other right or option conferred upon it by law or in the terms of this [Indemnity] Agreement, to take possession of any part or all of the work under any contract or contracts covered by any Bonds, and at the expense of the [Defendants] to complete or arrange for the completion of the same, and the [Defendants] shall promptly upon demand pay to the [Plaintiff] all losses, costs, and expenses so incurred.

(Id. at 3 (emphasis added).) Defendants' payments to Plaintiff under the Indemnity Agreement were to be made upon demand:

Payment . . . shall be made to the [Plaintiff] by the [Defendants] upon the demand by [Plaintiff] as soon as liability exists or is asserted against [Plaintiff], whether or not the [Plaintiff] shall have made any payment therefor. . . .
The [Plaintiff's] demand shall be sufficient if sent by registered or certified mail, by facsimile transmission, or by personal service to the [Defendants] . . . .

(Id. (emphasis added).)

         Finally, the Indemnity Agreement afforded Plaintiff the right to settle claims on any bonds issued by Plaintiff for Defendants:

The [Plaintiff] shall have the right to adjust, settle or compromise any claim, demand, suit, arbitration proceeding or judgment upon the Bonds. The liability of the [Defendants] to the [Plaintiff] under this Agreement shall extend to and include all amounts paid by the [Plaintiff] under the belief that:
(1) the [Plaintiff] was or might be liable therefore; or
(2) such payments were necessary or advisable to protect any of the [Plaintiff's] rights or to avoid or lessen [Plaintiff's] liability or alleged liability.

(Id. at 4.)

         II. The Performance Bond

         As contemplated by the Indemnity Agreement, Plaintiff-as “Surety”-issued “Subcontract Performance Bond, number 211-69-64, ” which named BPDI as “Principal” and GLF Construction Corporation (“GLF”) as “Obligee.”[4] (See Doc. 69-1, p. 7 (“Performance Bond”); see also Doc. 19, ¶ 13; Doc. 62-2, pp. 1-12 (“Tabor Aff.”).) Incorporating by reference the terms of a “written agreement” titled “Contract Number CN1-8-10-12-014A; Package 1, Upland and Minor Marine Works in connection with Canaveral Harbor 44 Foot Channel Project, ” (“Subcontract”), [5] the Performance Bond guaranteed BPDI's performance under the Subcontract:

         Whenever Principal shall be, and be declared by Obligee to be in default under the [Subcontract, ] the Obligee having performed Obligee's obligations thereunder:

(1) Surety may promptly remedy the default subject to the provisions of paragraph 3 herein; or
(2) Obligee after reasonable notice to Surety may, or Surety upon demand of Obligee, may arrange for the performance of Principal's obligation under the [S]ubcontract subject to the provisions of paragraph 3 herein;
(3) The balance of the [S]ubcontract price . . ., shall be credited against the reasonable cost of completing performance of the [S]ubcontract. . . [But] in no event shall the aggregate liability of the Surety exceed the amount of this [Performance Bond-$3, 563, 741.76]. . . .

(Doc. 69-1, p. 7; see Doc. 19, ¶ 12 (admitting that BPDI “entered into a subcontract agreement with [GLF], whereby [BPDI] agreed to perform certain work and/or supply materials” for a maritime construction project ...

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