Philadelphia Indemnity Insurance v. Manitou Constraction, Inc.

115 F. Supp. 3d 1378, 2015 U.S. Dist. LEXIS 82281, 2015 WL 3904557
CourtDistrict Court, N.D. Georgia
DecidedJune 25, 2015
DocketCivil Action No. 1:14-CV-0401-CC
StatusPublished
Cited by6 cases

This text of 115 F. Supp. 3d 1378 (Philadelphia Indemnity Insurance v. Manitou Constraction, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philadelphia Indemnity Insurance v. Manitou Constraction, Inc., 115 F. Supp. 3d 1378, 2015 U.S. Dist. LEXIS 82281, 2015 WL 3904557 (N.D. Ga. 2015).

Opinion

OPINION AND ORDER

CLARENCE COOPER, Senior District Judge.

This matter is before the Court on Plaintiff Philadelphia Indemnity Insurance Company’s Motion for Summary Judgment [Doc. No. 27]. Defendants Manitou Construction, Inc. and Thomas A. Nort (collectively referred to herein as “Defendants”) have not opposed the Motion for Summary Judgment. For the foregoing reasons, the Court grants the Motion.

I. BACKGROUND

Defendant Thomas A. Nort (“Nort”) formed Defendant Manitou Construction, Inc. (“Manitou”) in 2011 to do work in North Dakota. Manitou entered into five government contracts, and Plaintiff Philadelphia Indemnity Insurance Company (“Philadelphia”) issued five sets of payment and performance bonds.

Nort was the president of Manitou, and Nort and Manitou agreed to indemnify Philadelphia for all of its losses and costs. The General Indemnity Agreement (the “Indemnity Agreement”) provides at paragraph 3 that:

Indemnitors agree to indemnify and hold harmless Surety from and against any Loss sustained or incurred: (a) by reason of having executed or being requested to execute any and all Bonds; (b) by failure of Indemnitors or Principals to perform or comply with any of [1381]*1381the covenants or conditions of this Agreement or any other agreement; and (c) in enforcing any of the covenants or conditions of this Agreement or any other agreement.... In the event of payments by Surety, Indemnitors agree to accept vouchers, a sworn itemization, or other evidence of such payments as prima facie evidence of the fact and extent of the liability of Indemnitors to Surety in any demand, claim or suit by Surety against Indemnitors.

(Indemnity Agreement [Doc. No. 27-8] ¶ 3.)

Manitou failed to pay its subcontractors and suppliers, and the subcontractors and suppliers began making substantial demands on Philadelphia under the payment bonds. Nort, both individually and on behalf of Manitou, admitted that Mani-tou could not pay its subcontractors and suppliers. Nort,' on behalf of Manitou, eventually signed letters stating that the company also did not have the financial resources to complete projects or pay bills.

Philadelphia began receiving claims from subcontractors and suppliers, and Philadelphia contacted Nort to get input from him as to whether those claims were valid. Nort acknowledged during his deposition that Philadelphia had reached out to him when it received claims and had asked for his input and review. However, Nort did not respond with any information about the validity of the claims. Nort testified that he reviewed some of them but eventually realized he did not have any information to state whether any of the claims were legitimate. Philadelphia did its best to investigate the claims and to pay no more than what was owed. Nort, on behalf of Manitou, testified he was not aware of a single claim Philadelphia should not have paid.

The Indemnity Agreement required Nort to deposit collateral to protect Philadelphia from losses. When Philadelphia received these claims and before Philadelphia began paying them, Philadelphia demanded that Nort provide Philadelphia with collateral as required by the Indemnity Agreement. Nort acknowledged that he received the demand for collateral and did not provide any collateral.

Philadelphia reviewed all of the claims and data that it received from Manitou’s subcontractors and suppliers. After reviewing these claims, Philadelphia paid' subcontractors and suppliers $1,253,447,78. Philadelphia had a construction consultant assist in getting new contractors to complete the unfinished projects. Philadelphia hired Robert Hillman of Professional Construction Consulting, Inc. to help arrange for the completion of the projects. Hill-man is a professional engineer who received his degree at the University of North Dakota, and he has significant experience assisting sureties in arranging for completion of projects. Philadelphia also hired John V. Burch of the law firm of Bovis, Kyle, Burch & Medlin, LLC to provide legal advice in connection with claims made and to prosecute this legal action.

Philadelphia has incurred losses for bond claims and costs totaling $1,311,302.82. Most of its losses were for claims paid to subcontractors and suppliers on the payment bonds. However, Philadelphia had to pay contractors to complete three projects, and it ultimately was paid some contract funds. The accounting for these losses and recovery is the following:

[1382]*1382Paid to subcontractors and suppliers $1,253,447.78
Paid to completion contractors $ 587,946.88
Paid for professional consulting $ 25,787.50
Paid for attorney’s fees $48,548.55
Total payments $1,915,730.71
Contract funds paid by owners . $ (604,427.89)
Total loss $1,311,302.82

The declaration of Philadelphia’s bond claim representative, Kenneth B. Huff, sets out an itemization of the amounts paid to each subcontractor, supplier, Philadelphia’s construction consultant and attorney.

Nort admitted, on behalf of Manitou and himself, that he did not know of any facts to support the affirmative defenses raised in defensive pleadings. Indeed, Nort acknowledged that he based some of his defenses on speculation.

II. STANDARD OF REVIEW

Summary judgment must be granted when the record shows “that there is no genuine dispute as- to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.'Civ.P. 56(a). In seeking summary judgment, the moving party bears the initial responsibility to demonstrate that there is no genuine issue as to any material fact and that summary judgment is appropriate. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Allen v. Bd. of Public Educ., 495 F.3d 1306, 1313 (11th Cir.2007). “Only when that burden has been met does the burden shift to the non-moving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991).

When evaluating the merits of a motion for summary judgment, the court must view all evidence and factual inferences raised by the evidence in the light most favorable to the non-moving party and resolve all reasonable doubts concerning the facts in favor of the non-moving party. Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir.1999) (citation omitted). The court is not permitted to make credibility determinations, weigh conflicting evidence to resolve disputed facts, or assess the quality of the evidence. Reese v. Herbert, 527 F.3d 1253, 1271 (11th Cir.2008).

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115 F. Supp. 3d 1378, 2015 U.S. Dist. LEXIS 82281, 2015 WL 3904557, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philadelphia-indemnity-insurance-v-manitou-constraction-inc-gand-2015.