Great American Insurance Company v. Brewer et al

Filing 40

ORDER granting 26 Motion to Strike ; adopting 31 Report and Recommendations. Signed by Judge Roy B. Dalton, Jr. on 7/8/2016. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
GREAT AMERICAN INSURANCE
COMPANY,
Plaintiff,
v.

Case No. 6:16-cv-63-Orl-37KRS

BILLY J. BREWER; DEBORAH
BREWER; and BREWER PAVING &
DEVELOPMENT, INC.,
Defendants.
ORDER
This cause is before the Court on the following matters:
(1)

Great American Insurance Company’s Motion to Strike in Part Affirmative
Defenses Asserted by Defendants (Doc. 26), filed April 29, 2016;

(2)

Memorandum in Opposition to Plaintiff’s Motion to Strike in Part Affirmative
Defenses Asserted by Defendants (Doc. 29), filed May 10, 2016;

(3)

Report and Recommendation (Doc. 31), filed May 23, 2016;

(4)

Defendants’

Objections

to

Magistrate

Judge’s

Report

and

Recommendations (Doc. 35), filed Jun 3, 2016; and
(5)

Great American Insurance Company’s Response to Defendants’ Objections
to Magistrate Judge’s Report and Recommendations (Doc. 39), filed
June 15, 2016.
BACKGROUND

On May 23, 2016, U.S. Magistrate Judge Karla R. Spaulding (“Judge Spaulding”)
entered a Report and Recommendation (see Doc. 31 (“Report”)) advising the Court to

strike two affirmative defenses asserted by Defendants Brewer Paving & Development,
Inc. (“BPD”), and Billy and Deborah Brewer (“Defendants”)—the “Thirty-Fifth Defense”
and “Forty-Eighth Defense” (Doc. 19, ¶¶ 35, 48 (“Defenses”)). (See Doc. 26 (“Motion to
Strike”).) The Defenses are that that specific performance and breach of contract claims
(Doc. 14, ¶¶ 22–28 (“Performance Claim”); id. ¶¶ 29–35 (“Breach Claim”)) asserted by
Plaintiff Great American Insurance Company (“Plaintiff”) are “barred by virtue of the
provisions of § 725.06, Fla. Stat” (“Florida Statute”) (see Doc. 19, ¶¶ 35, 48). Defendants
filed objections to the Report (Doc. 35 (“Objections”)), Plaintiff responded (Doc. 39), and
the matter is ripe for adjudication.
STANDARDS
Federal district court judges may designate magistrate judges to hear dispositive
matters pending in a civil action for the purpose of submitting “proposed findings of fact
and recommendations for the disposition” of such matters (“Reports”). See Fed. R.
Civ. P. 72(b)(1). District court judges must review de novo “those portions” of Reports to
which specific objection is made. See Fed. R. Civ. P. 72(b)(3). Upon review, district court
judges may choose to further develop the evidentiary record, “return the matter to the
magistrate judge with instructions,” or “accept, reject, or modify” such Reports. See
28 U.S.C. § 636(b)(1)(C); see also Stephens v. Tolbert, 471 F.3d 1173, 1176
(11th Cir. 2006).
DISCUSSION
Defendants object to Judge Spaulding’s Report on two grounds: (1) first, because
BPD “is a member of the class protected by” the Florida Statute, Judge Spaulding
incorrectly determined that the Florida Statute is inapplicable to the Agreement (see

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Doc. 35, ¶ 1); and (2) second, Judge Spaulding insufficiently addressed both “the issues
of fact which remain to be established outside those contained in [the pleadings, and] the
lack of prejudice to Plaintiff in permitting Defendants to proceed with [the Defenses]” (see
id. ¶ 2). Plaintiff counters that: (1) absent any plausible allegation or inference that Plaintiff
is an “owner of real property,” or “an architect, engineer, general contractor,
subcontractor, sub-subcontractor, or materialman,” it is irrelevant that BPD is a contractor;
(2) the pleadings permit no plausible inference that Plaintiff is anything other than a surety,
and Defendants have identified no other possible fact that might undermine Judge
Spaulding’s analysis; and (3) prejudice to Plaintiff need not be shown to strike a patently
frivolous affirmative defense. (See Doc. 39, pp. 3–4.) Upon de novo review, the Court
finds that: (1) Judge Spaulding’s analysis is based on a correct view of the pleadings and
a proper application of Florida law; and (2) prejudice need not be established to strike a
patently frivolous affirmative defense. See Fed. R. Civ. P. 12(f)(2); see also BE & K, Inc.
v. Seminole Kraft Corp., 583 So. 2d 361, 365 (Fla. 1st DCA 1991).
In pertinent part, the Florida Statute renders contracts void and unenforceable
under the following circumstances: (1) the contract concerns or guarantees “any
construction, alteration, repair, or demolition of a building, structure, appurtenance, or
appliance, including moving and excavating associated therewith” (“Construction
Contract”); (2) the parties to the Construction Contract include “an owner of real property
and an architect, engineer, general contractor, subcontractor, sub-subcontractor, or
materialman or any combination thereof” (“Contracting Party Requirement”); (3) one of
the parties to the Construction Contract promises “to indemnify or hold harmless” the
other party “for damages to persons or property caused in whole or in part by any act,

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omission, or default of the indemnitee arising from” the Construction Contract or
performance of the Construction Contract; and (4) the Construction Contract does not
contain “a monetary limitation on the extent of the indemnification that bears a reasonable
commercial relationship to the contract and is part of the project specifications or bid
documents, if any.” See Fla. Stat. Ann. § 725.06(1) (emphasis added); see also Kone,
Inc. v. Robinson, 937 So. 2d 238, (Fla. 1st DCA 2006) (finding the Florida Statute was
inapplicable because the Contracting Party Requirement was not met).
Here, the Defenses concern the validity of an “Agreement of Indemnity”
(“Agreement”), which was attached as Exhibit A to Plaintiff’s initial Complaint. (See
Doc. 19, ¶¶ 35, 48; see also Doc. 1-1, pp. 1–9; Doc. 14, ¶¶ 8–11, 15–16, 20–35.) Based
on the face of the Agreement and the allegations and admissions of the parties, the
following facts are undisputed: (1) Plaintiff and Defendants are the parties to the
Agreement; (2) as “a commercial surety” in Florida, Plaintiff executed the Agreement and
issued a “Subcontract Performance Bond”, which guaranteed BPD’s work on a
construction project in Florida; and (3) under the Agreement, Plaintiff is not an owner of
real

property,

or

an

architect,

engineer,

general

contractor,

subcontractor,

sub-subcontractor, or materialman. (See Doc. 1-1, pp. 1, 4–6; Doc. 14, ¶¶ 1–4, 12, 13;
Doc. 19, ¶¶ 1–4, 12, 13.) Based on these undisputed facts, Judge Spaulding correctly
determined that the Contracting Party Requirement of the Florida Statute is not met and
the Defenses should be stricken as “patently frivolous.” (Doc. 31, p. 3.)
CONCLUSIONS
Accordingly, it is hereby ORDERED AND ADJUDGED that:

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(1)

Defendants’

Objections

to

Magistrate

Judge’s

Report

and

Recommendations (Doc. 35) are REJECTED and OVERRULED.
(2)

The Report and Recommendation (Doc. 31) is APPROVED and
ADOPTED.

(3)

Great American Insurance Company’s Motion to Strike in Part Affirmative
Defenses Asserted by Defendants (Doc. 26) is GRANTED.

(4)

The “Thirty-Fifth Defense” and “Forty-Eighth Defense” asserted by
Defendants (Doc. 19, ¶¶ 35 & 48) are STRICKEN.

DONE AND ORDERED in Chambers in Orlando, Florida, on July 8, 2016.

Copies:
Counsel of Record

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