United States District Court, M.D. Alabama, Northern Division
MEMORANDUM OPINION AND ORDER
C. MARKS, CHIEF UNITED STATES DISTRICT JUDGE.
March 14, 2019, American Southern Insurance Company
(“Plaintiff”) filed suit against KHDM
Construction, LLC (“Defendant”) and Matthew L.
McCartyfor breach of an Indemnity Agreement
between the parties. (Doc. 1). The Plaintiff alleges that on
August 5, 2011, it entered into the Indemnity Agreement with
the Defendant “[a]s a condition of [the
Plaintiff's] issuance of surety bonds on behalf of the
[the Defendant.]” (Id. at 2). Moreover, the
Plaintiff contends that it has made payments under the
Defendant's bonds and incurred attorneys' fees in
connection with the same. (Id. at 6-7).
Defendant failed to file an Answer or otherwise appear in
this lawsuit within the time limits set forth in the Federal
Rules of Civil Procedure. Accordingly, on July 18, 2019, the
Clerk entered a default against the Defendant. (Doc. 12). On
August 26, 2019, the Plaintiff filed a Motion for Default
Judgment (doc. 16), requesting that judgment be entered in
its favor against the Defendant in the amount of $863,
649.83, which figure represents the losses, costs, and
expenses sustained by the Plaintiff as a result of issuing
surety bonds on behalf of the Defendant and enforcing the
indemnity agreement. (Doc. 17 at 10) (Doc. 18 at 3). The
Defendant did not file a response to the Plaintiff's
Default Judgment Motion, although it had an opportunity to do
so. (Doc. 23). For the reasons that follow, the
Plaintiff's Motion for Default Judgment is due to be
granted on the issues of liability and damages.
JURISDICTION and VENUE
Court possesses subject matter jurisdiction over this case
pursuant to 28 U.S.C. § 1332(a) because the amount in
controversy exceeds $75, 000, exclusive of interests and
costs, and complete diversity exists between the parties.
Personal jurisdiction and venue are uncontested.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 55(a), the Clerk of Court
must enter default when “a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend, and that failure is shown by affidavit
or otherwise . . ..” Further, “[i]f the
plaintiff's claim is for a sum certain . . . the clerk -
on the plaintiff's request, with an affidavit showing the
amount due - must enter judgment for that amount and costs
against a defendant who has been defaulted for not appearing
. . ..” FED.R.CIV.P. 55(b)(1).
default has been entered, “[t]he defendant, by his
default, admits the plaintiff's well-pleaded allegations
of fact, is concluded on those facts by the judgment, and is
barred from contesting on appeal the facts thus
established.” Nishimatsu v. Const. Co., Ltd. V.
Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
A district court need not hold a hearing to determine damages
when “all essential evidence is already of
record.” S.E.C. v. Smyth, 420 F.3d 1225,
1231-32 & n.13 (11th Cir. 2005).
Liability for Breach of the Indemnity Agreement
support of its Motion for Default Judgment, the Plaintiff
submits an affidavit of John Northrop, its Assistant Vice
President of Surety Claims for National Claims Services.
(Doc. 18). In his affidavit, Mr. Northrop attests to the
execution of the subject Indemnity Agreement, the issuance of
surety bonds, payments made under the Bonds, and
attorneys' fees incurred. The Plaintiff also submits an
affidavit from its attorney, Adrienne Fazio, attesting to the
attorneys' fees and costs incurred “arising out of
and connected to surety bonds executed on behalf of KHDM
Construction, LLC . . ..” (Doc. 19 at 1).
Plaintiff's allegations concerning the breach of the
Indemnity Agreement and supporting evidence provide a
sufficient basis for the Court to enter default judgment
against the Defendant as to liability.
establish breach of contract under Georgia law, a Plaintiff
must prove three elements: (1) subject matter of the
contract; (2) consideration; and (3) mutual assent by all
parties to all contract terms. Broughton v. Johnson,
247 Ga.App. 819, 819, 545 S.E.2d 370, 371
(2001). Moreover, Georgia courts routinely uphold
“the validity and enforceability of indemnification
agreements executed in connection with the issuance of surety
bonds.” Anderson v. U.S. Fid. & Guar. Co.,
267 Ga.App. 624, 627, 600 S.E.2d 712, 715 (2004). “When
interpreting [indemnity] agreements, [Georgia courts] apply
the ordinary rules of contract construction.”
Id. Importantly, “[n]o ...