U S Specialty Insurance Company v. Garison Constructors of Arkansas LLC et al
ORDER granting Plaintiff's 12 motion for default judgment. Signed by Judge Susan Webber Wright on 09/22/2014. (rhm)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
U.S. Specialty Insurance Company
Garison Constructors of Arkansas LLC
NO: 4:13CV00445 SWW
Plaintiff U.S. Specialty Insurance Company (“U.S. Specialty”) brings this contract
dispute pursuant to the Court’s diversity jurisdiction against Garison Constructors of Arkansas
LLC (“Garison”).1 By previous order, the Court directed the Clerk to enter default against
Garison for failure to answer the complaint or make an appearance. However, the Court held
U.S. Specialty’s motion for default judgment (ECF No. 12) in abeyance pending further proof of
damages.2 U.S. Specialty has now supplemented its proof of damages (ECF Nos. 22, 23), and
Garison has failed to respond. After careful consideration, and for reasons that follow, the
motion for default judgment is granted.
The following facts, alleged in the complaint, are deemed admitted. U.S. Specialty
Plaintiff also named Andrew Garison and Kay Garison as defendants, but the Court
administratively terminated claims against these individual defendants pursuant to a bankruptcy
Federal Rule of Civil Procedure 55(b)(1) provides that after a default has been entered
for failure to appear, the clerk may enter a judgment by default when the claim is for “a sum
certain or for a sum which can by computation be made certain.” Fed. R. Civ. P. 55(b)(1). If the
judgment sought is not for a sum certain, Rule 55(b)(2) provides that “the court may conduct
such hearings or order such references as it deems necessary and proper” in order to “enable the
court to enter judgment.” Fed. R. Civ. P. 55(b)(2).
issued performance and payment bonds (“Bonds”) on behalf of Garison in connection with
several construction projects (“Construction Projects”), and Garison executed an indemnification
agreement (“Indemnification Agreement”) that indemnifies U.S. Specialty against losses under
the Bonds. Subsequently, Garison failed to pay a number of subcontractors and suppliers who
supplied services or material for the Construction Projects. Many of the subcontractors and
suppliers who were not paid asserted claims against the Bonds, which caused U.S. Specialty to
incur losses. Garison Constructors refused to fulfill its obligations under the Indemnification
Agreement and all conditions precedent to U.S. Specialty’s right to indemnification have been
satisfied. By way of relief, U.S. Specialty seeks payment of all losses, including attorney’s fees,
costs, and expenses.
The Indemnity Agreement provides that in the event of payment by the surety under the
Bonds, an itemized statement of the amount of payment, sworn to by any officer or authorized
representative of the surety, shall be prima facie evidence of the amount of such payment and the
extent of liability of the indemnitor. See ECF No. 1, Ex. #1. In support of its motion for default
judgment, U.S. Specialty presents two affidavits by Patrick F. Laverty, a senior bond claims
attorney for HCC Surety Group, of which U.S. Specialty is a member. See ECF Nos. 12-3, 22.
Laverty testifies that he investigated the subcontractor/supplier claims made against the Bonds
and remitted payments for valid claims. Laverty presents a itemized payment statement that
includes, among other things, the name of each payee and the amount of each payment related to
specific construction projects. The statement shows that U.S. Specialty paid a total $320,571.87
In addition to making payments made to subcontractors and suppliers, U.S. Specialty
incurred the cost of fees and expenses to investigate and resolve claims and pursue
reimbursement from Garison. Laverty testifies that U.S. Specialty incurred attorney’s fees,
costs, and expenses totaling $39,852.25, and he provides an itemized statement documenting the
same. U.S. Specialty also provides the affidavit of attorney Gregory M. Weinstein, who testifies
that the fees, expenses, and costs requested are reasonable.
According to the evidence presented, U.S. Specialty’s total loss under the Bonds is
$360,424.14. Garison has failed to respond to U.S. Specialty’s claim for damages, and the Court
finds that U.S. Specialty has established that it is entitled to total damages in the amount to
IT IS THEREFORE ORDERED that Plaintiff’s motion for default judgment (ECF No.
12) is granted. Judgment awarding damages in the amount of $360,424.14, plus post-judgment
interest provided by law, shall be entered together with this order.
IT IS SO ORDERED THIS 22ND DAY OF SEPTEMBER, 2014.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
Although Garison failed to make an appearance in this case after receiving service of the
complaint and summons, the Court has repeatedly attempted to provide the company notice of
U.S. Specialty’s claim and an opportunity to respond. However, the Court’s orders, mailed by
regular mail and certified mail, return receipt requested, have been returned to the Court as
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