Travelers Casualty and Surety Company of America v. S&J Construction Company Inc

• Court: District Court, E.D. Arkansas
• Decided: January 24, 2024
• Docket: 4:23-cv-00309
• Status: Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS CENTRAL DIVISION TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA PLAINTIFF

V. No. 4:23-cv-309-DPM S&J CONSTRUCTION COMPANY, INC.; JCA LLC; FOREST OAKS DEVELOPMENT, LLC; ACJ RENTAL COMPANY, LLC; and LUTRICIA K. SMITH DEFENDANTS

ORDER 1. Travelers Casualty and Surety Company of America issued bonds backing S&J Construction Company in construction projects for several cities in Texas and Louisiana. The bonds guaranteed performance and payment of various companies. Travelers paid $3,196,213.95 on the bonds. Travelers now seeks indemnity from S&J Construction, plus from three other entities and an individual: JCA LLC, Forest Oaks Development, LLC, ACJ Rental Company, LLC, and Lutricia Smith. There’s nothing yet of record about service on Smith issue addressed below. The three entities move to dismiss. They say that Travelers should have sued them in a companion case long pending in state court because both lawsuits involve the same cause of action. They also argue that they aren't parties to the indemnity agreements.

In 2021, Travelers sued the Jerry A. Smith Family Trust and four individuals in Pulaski County Circuit Court. There Travelers alleges that Jerry Smith was one of S&J Construction’s indemnitors, and his trust became an indemnitor after his death. Travelers seeks a determination of whether the trust is an indemnitor under the agreements and whether Jerry Smith’s transfer of assets to the trust is voidable. 2. Travelers is correct that Arkansas law applies on the claim-splitting issue. Austin v. Super Valu Stores, Inc., 31 F.3d 615, 617 (8th Cir. 1994). But Arkansas has not adopted a rule against claim-splitting. Baptist Health v. Murphy, 2010 Ark. 358, at 32-33, 373 S.W.3d 269, 290 (Greathouse, J., concurring). A party can file parallel state and federal cases on the same claim or related claims. Mountain Pure, LLC v. Turner Holdings, LLC, 439 F.3d 920, 924 (8th Cir. 2006). This may raise abstention issues, but none are presented here. And preclusion issues will abide a final judgment in one case or the other. The three entities’ motion to dismiss is well-founded nonetheless. The Court takes the pleaded facts as true. Sparkman Learning Center v. Arkansas Department of Human Services, 775 F.3d 993, 997 (8th Cir. 2014). JCA, Forest Oaks, and ACJ Rental aren’t parties to any of the indemnity agreements. The indemnitors are S&J Construction itself, Jerry A. Smith (individually), Lutricia K. Smith

(individually), Grabold Construction Company, L.L.C., Cheyenne Smith (individually), and Privcon, Inc. Travelers has not sued Grabold Construction, Cheyenne Smith, or Privcon. Travelers argues that JCA, Forest Oaks, and AC] Rental are indemnitors, too, because Jerry Smith had actual or apparent authority to act on their behalf. Doc. 1 at 10. These allegations are conclusory. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). No facts showing authority, or these entities’ relationships to the bonded projects, are pleaded. And whatever Jerry Smith’s authority (actual or apparent) to bind one or more of these three entities, no facts are alleged indicating that he actually did so here. Travelers has failed to state a claim against JCA, Forest Oaks, or ACJ Rental. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). 3. Travelers filed suit in March 2023. The docket shows no service on Lutricia Smith. The Court will dismiss the claims against her without prejudice unless Travelers shows timely service or seeks some other relief by 9 February 2024. 4. The Clerk’s Office referred Travelers’s motion for entry of default to chambers. Travelers served S&J Construction’s agent for service in April 2023. Doc. 7-1 at 6. No answer or Rule 12(b) motion has been filed. Travelers is therefore entitled to a Clerk’s default against S&J Construction. Fed. R. Civ. P. 55(a).

ime

* * * Motion to dismiss, Doc. 11, granted without prejudice. Any curative amended complaint due by 23 February 2024. Motion for default, Doc. 25, granted. The Court directs the Clerk to enter a default against S&J Construction. Clarification on Lutricia Smith service due by 9 February 2024. So Ordered.

AM GF D.P. Marshall Jr. United States District Judge at Phrwony R24 J

sles