United States District Court, N.D. Alabama, Eastern Division
ANNEMARIE CARNEY AXON, UNITED STATES DISTRICT JUDGE
matter before the court is plaintiff SureTec Insurance
Company's (SureTec) Application for Preliminary
Injunction. (Doc. 1). The court has carefully considered the
application, the supporting brief, and the arguments
presented at the November 7, 2018 hearing. For the following
reasons, the application for preliminary injunction (doc. 1)
is GRANTED. The specific terms of the
injunctive relief are set forth by separate order.
parties to this action are plaintiff SureTec and defendants
Eternity LLC (“Eternity”), BMP, Inc.
(“BMP”), and Bobby Shane McCarty, an individual.
SureTec is a surety company and is in the business of issuing
payment and performance bonds on behalf of contractors like
Eternity. (See doc. 2 at 2). Eternity is plumbing
contractor, and Mr. McCarty is the sole member of Eternity.
(Doc. 1 at ¶¶ 2, 7; Doc.
1). Eternity was awarded a contract to complete certain
plumbing work on a construction project at Talladega College.
(Doc. 1 at ¶ 7; Doc. 2 at 4; Doc. 18 at 1).
contract required Eternity to guarantee the company's
work with a payment and performance bond. (See doc.
2 at 2; doc. 18 at 1). SureTec issued the payment and
SureTec issued the bond, SureTec required Eternity, BMP, and
Mr. McCarty execute an Indemnity Agreement in favor of
SureTec in the event that Eternity did not perform its
obligations on the Talladega College construction project.
(Doc. 2 at 2). The agreement intended to protect SureTec
against assuming “the sole risk that any failure or
default by Eternity might result in loss to it.” (Doc.
2 at 2). The agreement was executed, and the defendants
became Indemnitors promising to “indemnify and save
[SureTec] harmless” in the event of any failure or
default by Eternity. (Doc. 2-1 at ¶ 2). Specifically,
the Indemnity Agreement provided:
2. The Indemnitors shall indemnify and save the Company
harmless from and against every claim, demand, liability,
cost, loss, charge, suit, judgment, award, fine, penalty, and
expense which the Company may pay, suffer, or incur in
consequence of having executed, delivered, or procured the
execution of such bonds . . . and the expense of determining
liability, or procuring, or attempting to procure, release
from liability, or in bringing suit or claim to interpret or
enforce . . . any of the obligations under the Bonds or of
the Indemnitors under this Agreement. (Doc. 2-1, ¶ 2).
Agreement goes onto provide:
3. Payment of loss or deposit of cash, cash collateral, or
other collateral security acceptable to the Company shall be
made to the Company by the Indemnitors as soon as liability
exists or is asserted against the Company, whether or not the
Company shall have made any payment or established any
reserve therefor . . . The Indemnitors stipulate and agree
that the Company will not have an adequate remedy at law
should Indemnitors fail to perform the Collateral Requirement
and further agree as a result that the Company is entitled to
specific performance of the Collateral Requirement. (Doc.
2-1, ¶ 3).
beginning construction on the Talladega project, Eternity
allegedly failed to complete its work under the contract.
(See Doc. 18 at 1). Eternity was terminated, and the
developer of the Talladega College project submitted a claim
to SureTec against the bond for payment of costs associated
with completion of the contract. (Doc. 2 at 5). Upon
receiving the claim, SureTec sent a demand letter to the
defendants. (Doc. 2 at 5). The letter informed the
Indemnitors of their obligations and demanded collateral in
the amount of $135, 000.00 as security for SureTec's
projected loss under the claim. (Doc. 2 at 5). After
investigating the claim, SureTec issued a $105, 000.00
payment to the project developer for a full and final
settlement of the claim. (Doc. 2 at 5).
undisputed that defendants have not deposited any collateral
with SureTec. SureTec seeks a preliminary injunction ordering
defendants to deposit collateral with SureTec in the amount
of $135, 000.00.
Standard of Review
preliminary injunction “is an extraordinary
remedy.” Bloedorn v. Grube,631 F.3d 1218,
1229 (11th Cir. 2011). “The purpose of the preliminary
injunction is to preserve the positions of the parties as
best we can until a trial on the merits may be held.”
Id. “A party seeking a preliminary injunction
bears the burden of establishing its entitlement to
relief.” Scott v. Roberts,612 F.3d 1279, 1290
(11th Cir. 2010). To prevail on an application for a
preliminary injunction, SureTec must establish: (1) “a
substantial likelihood of success on the merits; (2)
irreparable injury will be suffered unless the injunction
issues; (3) the threatened injury to [SureTec] ...