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American Southern Insurance Company v. Peavy Construction Company, Inc.

United States District Court, S.D. Alabama, Southern Division

April 12, 2019

PEAVY CONSTRUCTION COMPANY, INC., JOHN R. PEAVY, AND KATHLEEN PEAVY, Individually, Separately and Severally, Defendants.



         This matter is before the court on Plaintiff's motion for summary judgment and brief in support thereof (Docs. 34 and 35), Defendants' response (Doc. 38), and Plaintiff's reply (Doc. 39). For the reasons explained below, Plaintiff's motion for summary judgment is due to be granted.


         This action arose as a result of payment and performance bonds that were issued by American Southern Insurance Company (“ASIC”) on projects to be performed by Peavy Construction Company, Inc. (Doc. 1; Doc. 55-1).[2] As a condition precedent to ASIC issuing performance and payment bonds on behalf of Peavy Construction Company, Defendants John and Kathleen Peavy (“Defendants”) were required to execute a General Agreement of Indemnity (“GAI”) as Indemnitors in favor of ASIC. (Doc. 35-2). The GAI was executed on March 1, 2013 by John Peavy as the President of Peavy Construction, John Peavy individually, and Kathleen Peavy, individually. (Id.)

Pursuant to the GAI, Defendants agreed to
indemnify and save harmless the Surety from and against any and all liability, loss, costs damages or expenses of whatever nature or kind and arising out of or in any way connected with such bonds, including but not limited to fees of attorneys and other expenses, cost and fees of investigation, adjustment of claims, procuring or attempting to procure the discharge of such bonds and attempting to recover losses or expenses from indemnitors or third parties whether the Surety shall have paid or incurred same, as aforesaid.

(Id. at ¶ 2). Defendants granted ASIC, “the right in its sole discretion to determine whether any suits or claims shall be paid, compromised, defended, prosecuted or appealed and to pay out such sums as it deems necessary to accomplish any of those purposes and its determination as to whether such suit or claim should be settled or defended shall be binding and conclusive on Indemnitors.” (Id. at ¶ 2.A.). Further, the GAI dictated that, “in any claim or suit hereunder, an itemized statement of aforesaid loss and expense, sworn to by an officer or agent of Surety, or the vouchers or other evidence of disbursement by Surety, shall be prima facie evidence of the fact and extent of the liability hereunder of the Indemnitors.” (Id.) Defendants additionally agreed, “if the Surety has cause to enforce the terms of this Indemnity Agreement by filing suit against Indemnitors to recover sums due under this Agreement, it is understood by the Principal and the Indemnitors that the Surety may recover its further expenses of such litigation, accrued interest and including 25% of such sums as attorneys' fees.” (Id. at ¶ 2.B.).

         ASIC received payment bond claims on Peavy Bond numbers 61154, 61894, 61880, 61176, 61168, and 61876. (Doc. 35-1 at 3, 7). The City of Mobile also made a performance bond claim against Performance Bond No. 61880. (Id.) ASIC has incurred losses in the satisfaction of payment and performance bond claims on bonds issued on behalf of Peavy Construction Company in the amount of $266, 716.51 (Doc. 35-1 at 1-53). ASIC has paid attorneys' fees and costs associated with the litigation of this action in amount of $12, 609.97 through November 12, 2018, has been billed for fees in the amount of $2, 679.00 through November 29, 2018; and continues to incur fees while this action is ongoing. (Doc. 35-1 at 54-57).

         Plaintiff filed its Complaint against Defendants on August 21, 2017, asserting causes of action for common law indemnity, statutory indemnity and contractual indemnity and seeking reimbursement, attorney's fees and cost for payments made on performance bonds issued on behalf of Peavy Construction Company. (Doc. 1).[3] On January 2, 2018 and May 3, 2018 respectively, Defendants John Peavy and Kathleen Peavy filed their Answers to the Complaint and Amended Complaint (Doc. 11, 12, 26, and 27). Peavy Construction did not file an Answer and a default judgment was entered against the company on July 11, 2018. (Doc. 25). Thereafter, Plaintiff served Defendant John and Kathleen Peavy with Requests for Admissions to which Defendants did not respond. (Doc. 35 at 2; see also docket sheet, generally). On November 27, 2018, Plaintiff sought to have this Court deemed its unanswered Requests for Admission admitted, which this Court determined was unnecessary. (Docs. 31 and 32).

         On January 24, 2019, Plaintiff filed the subject motion for summary judgment. (Doc. 34). This Court entered an Order setting the response times for Plaintiff's Motion requiring Defendants to respond by February 21, 2019. (Doc. 36). Defendants did not file a response. This Court again entered an Order allowing Defendants to respond to Plaintiff's motion by March 8, 2019. (Doc. 37). On March 8, 2019[4], Defendants hand delivered a letter to this Court that addresses this action but did not address the motion for summary judgment or offer any additional facts. Doc. 38). Plaintiff timely repl(ied on March 22, 2019. (Doc. 39).


         A. Summary Judgment Standard

         Federal Rule of Civil Procedure 56(a) provides that summary judgment shall be granted: “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The trial court's function is not “to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). “The mere existence of some evidence to support the non-moving party is not sufficient for denial of summary judgment; there must be ‘sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.' ” Bailey v. Allgas, Inc., 284 F.3d 1237, 1243 (11th Cir. 2002) (quoting Anderson, 477 U.S. at 249). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, at 249-250. (internal citations omitted).

         The basic issue before the court on a motion for summary judgment is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” See Anderson, 477 U.S. at 251-252. The moving party bears the burden of proving that no genuine issue of material fact exists. O'Ferrell v. United States, 253 F.3d 1257, 1265 (11th Cir. 2001). In evaluating the argument of the moving party, the court must view all evidence in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in its favor. Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir. 1999). “If reasonable minds could differ on the inferences arising from undisputed facts, then a court should ...

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