Mid-Continent Casualty Company v. Don Brady Construction Company, Inc. et al
Filing
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Order granting 64 MOTION for Summary Judgment filed by Mid-Continent Casualty Company. Denying 80 MOTION to Strike filed by Don Brady Construction Company, Inc.. Deadline set to 5/14/2012 for plf to inform this court whether it intends to pursue its claims against defendant, Linda Brady. Signed by Judge Callie V. S. Granade on 5/7/2012. copies to parties. (sdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
MID-CONTINENT CASUALTY,
COMPANY,
Plaintiff,
v.
DON BRADY CONSTRUCTION
COMPANY, INC., et al.,
Defendant.
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CIVIL ACTION NO. 11-0088-CG-C
MEMORANDUM OPINION AND ORDER
This matter is before the court on plaintiff’s motion for summary judgment
(Docs. 64, 65), the motion of Don Brady Construction Company, Inc. (“Don Brady
Construction”) to strike the affidavit of Mike Dill (Doc. 80), Don Brady
Construction’s opposition to summary judgment (Doc. 81), and plaintiff’s reply
(Doc. 83). For reasons which will be further explained below, the court finds that
Mike Dill’s affidavit is admissible and may be considered by the court on summary
judgment. The court further finds that plaintiff has sufficiently supported its
claims in its motion for summary judgment and that Don Brady Construction has
failed to raise a genuine issue of material fact. Accordingly, plaintiff’s motion for
summary judgment will be granted.
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FACTS
The defendants in this case each executed a General Application and
Agreement of Indemnity (“GAAI”) in favor of plaintiff in which the defendants
promised to indemnify plaintiff against any and all liability for losses and expenses
which plaintiff may sustain or incur by reason of having issued any bonds on behalf
of Don Brady Construction or for the failure of the defendants to perform or comply
with the conditions of the GAAI, or in enforcing any of the conditions of the GAAI.
(Doc. 65-1, ¶ 3; Doc. 65-2, p. 1, ¶ 1). Plaintiff issued a series of performance and
payment bonds on behalf of Don Brady Construction on various federal construction
projects. (Doc. 65-1, ¶ 2). Pursuant to the terms of the GAAI, the defendants also
agreed to collateralize any reserve established by plaintiff in anticipation of any loss
under any bond issued on behalf of Don Brady Construction. Specifically, the
defendants agreed as follows:
If for any reason the Surety shall deem it necessary to setup or to
increase a reserve to cover any possible liability or loss for which the
Undersigned will be obligated to indemnify the Surety under the terms
of the Agreement, the Undersigned shall deposit with the Surety,
immediately upon demand, a sum of money equal to such reserve and
any increase thereof as collateral security to the Surety for such
liability or loss. The Surety shall have the right to use the deposit, or
any part thereof, in payment or settlement of any liability, loss or
expense for which the Undersigned would be obligated to indemnify
the Surety under the terms of this Agreement. Surety shall have no
obligation to invest, or to provide a return on, the deposit. The
Undersigned shall be entitled to the return of any unused portion of
the deposit upon termination of the liability of the Surety on the Bonds
and the performance by the Undersigned of all obligations to the
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Surety under the terms of this Agreement. The Surety’s demand shall
be sufficient if sent by Registered or Certified Mail to the Undersigned
at the addresses stated herein, or at the addresses of the Undersigned
last known to the Surety, whether or not actually received.
(Doc. 65-2, ¶ 2). The defendants further agreed, upon the occurrence of an event of
default as defined by the GAAI, to assign, transfer and convey to plaintiff all monies
due or to become due to Don Brady Construction under any bonded contract,
including but not limited to progress payments, deferred payments, retained
percentages and compensation for extra work. (Doc. 65-2, ¶ 5).
Plaintiff reports that it has received notice of claims for non-payment from
laborers and material suppliers of Don Brady Construction on the above-referenced
projects. Plaintiff believes that one or more of the claims may be meritorious and
plaintiff intends to discharge any obligations which it may owe to the claimants in
accordance with the requirements of its bonds and applicable law. (Doc. 65-1, ¶ 4).
According to an affidavit sworn to by Mike Dill as Assistant Vice President for
plaintiff, as of January 9, 2012, plaintiff has incurred losses in the amount of
$523,683.82 in the performance of its obligations under the aforementioned bonds
and has incurred legal, consulting and traveling expenses in the amount of
$308,482.31. (Doc. 65-1, ¶ 5). Thus, plaintiff has reportedly suffered a total loss of
$832,166.13. Additionally, Mr. Dill, declares that based upon its investigation,
plaintiff has established a remaining loss and expenses reserve in the amount of
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$872,499.33 in anticipation of further losses under the aforesaid bonds. (Doc. 65-1,
¶ 5).
Mr. Dill also reports that, in accordance with the provisions of the GAAI, it
has previously requested that Don Brady Construction deposit collateral, money, or
other security in the amount of its loss reserve pending final disposition of the
claims and the Don Brady Construction has failed to honor this request and has
otherwise refused to perform its obligations under the GAAI. (Doc. 65-1, ¶ 7).
DISCUSSION
A. Motion to Strike
Don Brady Construction moves to strike the affidavit of Mike Dill which was
submitted by plaintiff in support of its motion for summary judgment. Don Brady
Construction contends that Mr. Dill’s attestation to the amounts of losses and
anticipated losses are conclusory statements without any supporting documentation
and of which he has no personal knowledge. As such, Don Brady Construction
argues that the affidavit is inadmissible. However, as plaintiff points out, Mr. Dill’s
affidavit states that he has personal knowledge of the matters and explains that he
has been “primarily responsible for the administration of various claims which have
arisen under bonds issued by Mid-Continent on behalf of Don Brady Construction
Company, Inc.” (Doc. 65-1, ¶ 1). The amounts attested do not appear to be
speculative or conjectural as Don Brady Construction contends, but are reportedly
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based on Mr. Dill’s administration of the claims made against the performance
bonds issued pursuant to the GAAI. The court notes that Don Brady Construction
has not attacked Mr. Dill’s qualifications or submitted any evidence or reason for
the court to questioned his veracity. There is no allegation that the affidavit is a
fraud.
Moreover, “[a]s a matter of law, ‘[P]ersonal knowledge can come from review
of the contents of [business] files and records.’” In re Trafford Distributing Center,
Inc., 414 B.R. 858, 862 (Bkrtcy. S.D.Fla. 2009) (citing Washington Central Railroad
Co., Inc. v. National Mediation Board, 830 F.Supp. 1343, 1353 (E.D.Wash. 1993)
and Londrigan v. Federal Bureau of Investigation, 670 F.2d 1164, 1174–1175 (D.C.
Cir. 1981).
Pursuant to Federal Rule of Evidence 803(6), business records are
admissible and employees who have knowledge of the procedures
governing the creation and maintenance of such records can testify as
to their contents. To interpret Rule 803(6) as requiring that affiants be
permitted to testify only to those bits of information to which they,
personally, have borne witness would be to turn Rule 803(6) on its
head and would create numerous substantive proof problems,
especially for large enterprises. Allowing evidence from employees who
have reviewed business records is what keeps corporate entities from
having to track down former employees every time a subpoena is
served regarding some menial aspect of their respective prior work;
more broadly, review of records is what keeps major national entities
from having to locate and produce the employee who personally put a
subject bill or document in the mail to a customer.
Id. Evidence similar to Mr. Dill’s affidavit is commonly held to be sufficient support
for the amount owed under a contract. See e.g. Vision Bank v. Garrett Investments,
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LLC, 2012 WL 628915, *2 (S.D.Ala. Feb. 27, 2012) (finding affidavit from Vice–
President for Operations, attesting that the Note is in default, that demand has
been made and setting forth the outstanding balance, was sufficient support for
summary judgment) (citing Griffin v. American Bank, 628 So.2d 540, 543 n. 4 (Ala.
1993). Accordingly, the court finds that Mr. Dill’s affidavit is admissible evidence
that may be considered by the court on summary judgment.
B. Summary Judgment Standard
Federal Rule of Civil Procedure 56(c) provides that summary judgment shall
be granted: “if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party 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).
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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 deny summary
judgment.” Miranda v. B&B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th
Cir. 1992) (citing Mercantile Bank & Trust v. Fidelity & Deposit Co., 750 F.2d 838,
841 (11th Cir. 1985)).
Once the movant satisfies his initial burden under Rule 56(c), the non-moving
party "must make a sufficient showing to establish the existence of each essential
element to that party's case, and on which that party will bear the burden of proof at
trial." Howard v. BP Oil Company, 32 F.3d 520, 524 (11th Cir. 1994)(citing Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Otherwise stated, the non-movant must
“demonstrate that there is indeed a material issue of fact that precludes summary
judgment.” See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The
non-moving party “may not rest on the mere allegations or denials of the [non-moving]
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party’s pleading, but .... must set forth specific facts showing that there is a genuine
issue for trial.” Fed. R. Civ. P. 56(e) “A mere ‘scintilla’ of evidence supporting the
[non-moving] party’s position will not suffice; there must be enough of a showing that
the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577
(11th Cir. 1990) (citation omitted). “[T]he nonmoving party may avail itself of all facts
and justifiable inferences in the record taken as a whole.” Tipton v. Bergrohr GMBHSiegen, 965 F.2d 994, 998 (11th Cir. 1992). “Where the record taken as a whole could
not lead a rational trier of fact to find for the non-moving party, there is no genuine
issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574
at 587 (1986) (internal quotation and citation omitted).
C. Merits of Motion for Summary Judgment
Don Brady Construction’s sole basis for opposing summary judgment is its
contention that plaintiff has failed to support its motion with admissible evidence
regarding the amount due under the GAAI. Don Brady Construction disputes the
admissibility of Mr. Dill’s affidavit and argues that facts should be construed in its
favor and that a factual dispute is genuine if a reasonable jury could return a verdict
for the non-moving party. However, the court found above that Mr. Dill’s affidavit
was admissible and could be considered on summary judgment. A copy of the GAAI
was also submitted as support for plaintiff’s summary judgment motion. The affidavit
from an officer of the plaintiff company attests to the existence of the GAAI, to the
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relevant terms, to Don Brady Construction’s failure to perform its obligations and to
the amounts owed under the GAAI. Don Brady Construction has submitted nothing
to undermine those assertions, and the court is aware of no independent reason to
doubt the veracity of Mr. Dill’s sworn statements. Don Brady Construction has
completely failed to provide “specific facts showing that there is a genuine issue for
trial.” Hoffman v. Allied Corp., 912 F.2d 1379, 1383 (11th Cir. 1990). Don Brady
Construction has not even suggested an alternative amount due. Don Brady
Construction had ample opportunity during discovery to investigate the amounts owed
and to question plaintiff’s representatives. Discovery is now closed (Doc 47), and there
is no evidence on the record to support facts different from those alleged by plaintiff in
its motion for summary judgment.
Don Brady Construction does not contend that it did not enter into the GAAI, or
that it is not in breach of the GAAI, nor has it alleged that the amounts due and
owing, set forth in the affidavit and alleged in the motion for summary judgment, are
incorrect. Put another way, there is no evidence (admissible or otherwise) tending to
show that the amount due is anything other than the amount specified in plaintiff’s
motion for summary judgment and supported by Mr. Dill’s affidavit. Don Brady
Construction’s opposition does not demonstrate fraud or show why any of the alleged
facts are false or inaccurate. Accordingly, the court finds that summary judgment is
due to be granted in favor of plaintiff.
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CONCLUSION
For the reasons stated above, the motion of Don Brady Construction Company,
Inc. to strike the affidavit of Mike Dill (Doc. 80), is DENIED and the motion of MidContinent Casualty Company for summary judgment (Doc. 64), is GRANTED.
The court notes that the summary judgment motion is directed at Don Brady
Construction Company, Inc. only and that claims remain against the other named
defendants in this case. However, the case is stayed as to four of the individual
defendants, Elizabeth Brady Lindley, Robert Lindley, Donald Brady and John Collins
who have all filed bankruptcy. (Docs. 22, 23, 25, 40, 41). There is one individual
defendant, Linda Brady, against whom claims remain active. However, Linda Brady
appeared pro se and notices from this court to Linda Brady have been returned as
undeliverable. (Docs. 73, 74, 79, 85, 95).
The court finds that there is no just reason for delay in entering judgment
against Don Brady Construction, Inc. and accordingly, the court will enter judgment
against Don Brady Construction, Inc. by separate order.
However, this case is currently set for pretrial on May 14, 2012, and for trial in
June 2012 and active claims remain against Linda Brady. Plaintiff is hereby
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ORDERED to inform this court, on or before May 14, 2012, whether it intends to
pursue its claims against defendant, Linda Brady.
DONE and ORDERED this 7th day of May, 2012.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE
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