Safeco Insurance Co. of America v. Graybar Electric Co.

59 So. 3d 649, 2010 Ala. LEXIS 186, 2010 WL 3835723
CourtSupreme Court of Alabama
DecidedSeptember 30, 2010
Docket1090422
StatusPublished
Cited by14 cases

This text of 59 So. 3d 649 (Safeco Insurance Co. of America v. Graybar Electric Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Safeco Insurance Co. of America v. Graybar Electric Co., 59 So. 3d 649, 2010 Ala. LEXIS 186, 2010 WL 3835723 (Ala. 2010).

Opinions

BOLIN, Justice.

Safeco Insurance Company of America (“Safeco”) and Johnson Controls, Inc. (“JCI”), appeal from a summary judgment entered in favor of Graybar Electric Company, Inc. (“Graybar”).

Facts and Procedural History

In October 2006, JCI entered into a contract with the Birmingham Airport Authority to perform work in connection with upgrades to the closed-circuit television system at the airport. As the general contractor for the project, JCI was required to furnish surety bonds, including a payment bond. JCI procured the bonds from Safeco, as surety on the project.

In performing the work on the project, JCI entered into a subcontract with TDC Systems Integration, Inc. (“TDC”). Gray-bar supplied electrical parts and equipment to TDC on credit pursuant to a contract. TDC failed to pay Graybar for the materials.

On January 10, 2008, Graybar sued TDC and its president, Antonio Dozier, who had signed a personal guaranty on behalf of TDC, in Georgia. Graybar alleged that TDC and its president owed Graybar $255,639.27 under a credit agreement and the personal guaranty. This amount included amounts Graybar alleged TDC owed on the airport project in Birmingham and on a project in New Orleans.

On April 18, 2008, Graybar notified JCI and Safeco by certified mail, pursuant to the payment bond and pursuant to § 39-1-1, Ala.Code 1975, concerning bonds required of persons contracting for public works, that TDC had failed to pay for materials and supplies sold to TDC for work performed on the airport project. The notice also provided that Graybar would seek reasonable attorney fees and interest in accordance with § 39 — 1—1(b). In the notice, Graybar stated that a complete set of Graybar’s invoices and proofs of delivery compiled to date containing approximately 400 pages would be sent to Safeco and JCI and that TDC had already been provided with a copy of those documents. On April 23, 2008, those documents were sent to Safeco, JCI, and the Birmingham Airport Authority. JCI did not respond. On May 28, 2008, Safeco responded to the notice, denying Graybar’s claim on the grounds that Graybar had not complied with the notice requirements of § 39-1-1 and that the invoices and other materials sent by Graybar were insufficient to satisfy Safeco that the materials TDC ordered and allegedly failed to pay for were actually used on the airport project. Safeco contended:

“TDC admits that they ordered the materials/supplies, received the good[s] and did not pay for them. They did not indicate which job the goods were used on or whether they were used at all. They admitted to ordering and receiving only. At no time, in any of the court documents!,] did they indicate that any of the goods were used on the Birmingham job. Thus, the provided court documents fail to shed any light on the subject.”

On October 3, 2008, Graybar filed a verified complaint for money damages against Safeco and JCI (hereinafter collectively referred to as “the defendants”) in the Jef[652]*652ferson Circuit Court. Graybar alleged that TDC failed to pay for materials used in the airport project in the amount of $202,076.22. Attached to the complaint, among other things, was an affidavit from TDC’s president stating that TDC had purchased materials having a total value of $202,076.22 from Graybar for use on the airport project and that TDC had not paid for the materials. Also, there was an affidavit from Graybar’s financial officer attesting to the amount of money spent on attorney fees and costs in trying to obtain satisfaction under the payment bond. On November 26, 2008, the defendants filed an answer denying Graybar’s claims.

On February 26, 2009, Graybar entered into a settlement agreement with TDC and its president in the lawsuit that had been filed in Georgia. The settlement provided as follows:

“This Settlement Agreement is entered into as of this 26th day of February, 2009, between Plaintiff, Graybar Electric Company, Inc., (herein ‘Gray-bar’), and Defendants, TDC Systems Integration, Inc. and Antonio Dozier, jointly and severally (herein ‘Defendants’).
“WHEREAS, Graybar filed a Complaint against Defendants in this court seeking to recover money owed to Gray-bar for materials supplied to TDC Systems Integration, Inc., in connection with two (2) construction projects, namely, Project NOIA SOC-1542 Access Control, Security Network Integration & Electrical Systems, at the New Orleans, Louisiana Airport (the ‘New Orleans Job’) and Closed Circuit Television (CCTV) System Upgrade Project at the Birmingham International Airport, Birmingham, Alabama (the ‘Birmingham Job’); and
“WHEREAS, Defendants desire to settle the above-captioned [Georgia] civil action and reduce or eliminate expenses of litigation; and
“WHEREAS, Defendants acknowledge and agree that the total principal amount due to Graybar is $233,996.79, comprised of the principal amount of $31,920.57 due on the New Orleans Job and the principal amount of $202,076.22 due on the Birmingham Job; and
“WHEREAS, the parties desire to stay the captioned civil action pending payment by Defendants to Graybar of said principal amount plus interest thereon as hereinafter provided.
“NOW THEREFORE, for and in consideration of Graybar’s agreement under the terms of this Settlement Agreement to forbear from the entry, enforcement and collection of the Consent Judgment, a copy of which is attached hereto as Exhibit ‘A,’ and specifically made a part hereof. Defendants agree and consent as follows:
“1.
“Defendants shall consent to a Consent Judgment by and through Defendants’ counsel of record in the above-captioned civil action granting Graybar judgment against Defendants, jointly and severally, for. the principal amount of $233,996.79, plus accrued interest thereon, or so much thereof as may from time to time remain outstanding and unpaid, at the rate hereinafter set forth from May 15, 2009, until said Consent Judgment is entered in the above captioned civil action, and thereafter at the rate provided by law until the unpaid principal amount with all interest accrued thereon is paid in full, together with reasonable attorney’s fees, and costs and expenses incurred in connection with the above referenced civil action. The original of said Consent Judgment shall be surrendered to Graybar or [653]*653its attorney. Graybar or its attorney, as applicable, will hold the Consent Judgment and only have said Judgment presented to the Court for signature and entered in the above captioned civil action if Defendants default in the terms and conditions of this Settlement Agreement.
“2.
“In further consideration of Graybar’s agreement and forbearance as aforesaid, Defendants agree to pay to Graybar the principal amount of $283,996.76 plus accrued interest at the rate hereinafter set forth in accordance with the following terms and conditions:
“Said principal sum, or the amount outstanding and unpaid from time to time, shall bear interest at the rate of five and one-quarter per cent (5 1/4%) per annum from May 15, 2009. Interest shall be computed on a 365-day year simple interest basis and shall be computed on the daily outstanding principal balance.

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Safeco Insurance Co. of America v. Graybar Electric Co.
59 So. 3d 649 (Supreme Court of Alabama, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
59 So. 3d 649, 2010 Ala. LEXIS 186, 2010 WL 3835723, Counsel Stack Legal Research, https://law.counselstack.com/opinion/safeco-insurance-co-of-america-v-graybar-electric-co-ala-2010.