Merchants Bonding Company v. Siteworx Design Build, LLC et al

Filing 35

MEMORANDUM OPINION & ORDER: 1) the claims asserted against Defendant Siteworx are DISMISSED WITHOUT PREJUDICE; 2) plaintiff's motion for summary judgment #23 is GRANTED as to defendant Kenneth Holland; 3) within 10 days plaintiff shall file a supplemental brief with evidentiary support providing further clarification as to the amount plaintiff claims is owed under the GAI. Review of plaintiff's previous submissions reflects some discrepancies. Signed by Judge William O. Bertelsman on 11/15/2017. (TJZ)cc: COR, Kenneth M. Holland via US Mail Modified text on 11/16/2017 (TJZ).

UNITED STATES DISTRICT COURT  
EASTERN DISTRICT OF KENTUCKY  
NORTHERN DIVISION  
AT COVINGTON  

CIVIL ACTION NO. 2016-127 (WOB-CJS)
PLAINTIFF  

MERCHANTS BONDING CO.

MEMORANDUM OPINION AND ORDER  

VS.

SITEWORX DESIGN BUILD, LLC ET AL.

DEFENDANTS

This matter is before the Court on defendant’s motion for
summary judgment (Doc. 23).

As will be discussed below, plaintiff

has not filed a response to this motion.
Factual and Procedural Background
Plaintiff Merchants Bonding Company filed its complaint against
defendants Siteworx Design Build, LLC and Kenneth M. Holland on July 7,
2016.

(Doc. 1.)

Plaintiff, a company that issued bonds pertaining to

a construction project in Covington, Kentucky, alleges that it was forced
to pay substantial sums pursuant to the bonds when defendants failed to
perform their obligations under the project.

Plaintiff seeks to recover

the amount of the bonds, plus interest, costs, and fees.
The parties’ relationship is governed by a General Application and
Agreement of Indemnity contract (the “GAI”).

(Doc. 23-2.)

The GAI

provides in relevant part:


[defendants] shall unconditionally indemnify and keep
indemnified [plaintiff] against any and all liability,
loss and expense of whatsoever kind or nature,

including, but not limited to, court costs, attorneys’
fees, and interest, which [plaintiff] may sustain or
incur (1) by reason of having executed or produced
execution of any Bond or Bonds, (2) by reason of the
failure of [defendants] to perform or comply with this
Agreement, or (3) to enforce any of the covenants and
conditions of this Agreement.


“[plaintiff] shall have the exclusive right for itself
and for [defendants] to decide and determine whether
any claim, demand, suit, or judgment shall, on the basis
of liability, expediency or otherwise, be paid . . .,
and
[plaintiff’s]
determination
shall
be
final,
conclusive and binding upon [defendants].”



“Vouchers, affidavits or other evidence of payment by
[plaintiff] of any loss, cost or expense shall be prima
facie evidence of their propriety and the liability of
[defendants] to [plaintiff] for such loss, cost or
expense.”



“[Plaintiff] shall be entitled to charge for any and
all disbursements made by it in good faith in and about
the matters contemplated by this Agreement under the
belief that it is or was liable for the sums and amounts
so disbursed, or that it was necessary or expedient to
make such disbursements, whether or not such liability,
necessity or expediency existed.”



“Immediately upon demand, [defendants] will deposit with
[plaintiff], as collateral security, money or other
collateral satisfactory to [plaintiff], equal to (1) the
liability of [plaintiff], if established; (2) the
liability asserted against [plaintiff]; or (3) the
reserve established by [plaintiff], or any increase
thereof, to cover any liability for any loss or expense
for which [defendants] may be obligated to indemnify
[plaintiff] under the terms of this Agreement.”



“[Plaintiff]
shall
be
entitled
to
enforce
the
obligations of this Agreement directly against [Mr.
Holland], or any one of them, without the necessity of
first proceeding against [Siteworx].”

(Doc. 23-2, at 2, 4, 5).
Plaintiff caused the complaint to be personally served on Mr.
Holland, (Doc. 9), who then filed an answer, (Doc. 11), pro se.

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However, plaintiff did not immediately effect service on Siteworx.
Accordingly, the Court sua sponte issued two show cause orders (Docs.
13, 27) requiring plaintiff to provide proof of service on Siteworx or
noting that, pursuant to Federal Rule of Civil Procedure 4(m), the claims
against Siteworx would be dismissed.

On November 7, 2017, plaintiff

filed a notice informing the Court that it was unable to obtain service
on Siteworx through its agent, Kenneth Holland.

(Doc. 34.)

During the pendency of this litigation, plaintiff served discovery
on

defendants,

including

requests

for

admission.

(See

Doc.

18.)

Defendants failed to respond to these requests for admission, and they
were deemed admitted on July 19, 2017.

(See Doc. 20.)

Plaintiff filed

its dispositive motion on August 25, 2017. (Doc. 23.) Neither defendant
filed a response, even when this Court ordered a response by October 2,
2017.

(Doc. 26.)

Analysis
A.

Defendant Siteworx
Pursuant to Federal Rule of Civil Procedure 4(m), Defendant

Siteworx must be dismissed.

Rule 4(m) provides that a plaintiff

must serve a defendant within 90 days after the complaint was filed
or the court “must dismiss the action without prejudice against
that defendant” or order service be made by a specified time.

The

record reveals that, although Mr. Holland was served, Siteworx was
not.

Mr. Holland was served with a summons identifying only Mr.

Holland as a defendant. (Doc. 9.)

Even assuming that Mr. Holland

is the proper agent for service of Siteworx, service on him
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individually does not effect service on Siteworx.

See Gottlieb v.

Sandia Am. Corp., 452 F.2d 510, 514-15 (3d Cir. 1971)(rejecting
the plaintiff’s argument that service on the individual defendant
constituted

service

on

the

corporation,

recognizing

that

a

business entity “enjoys an identity separate and apart from its
stockholders, directors, and officers”); Kentucky Bonding Co. v.
Commonwealth, 199 S.W. 807, 808 (Ky. 1918)(finding that service
had not been effected as to a business entity when an individual
defendant

was

served

with

a

summons

to

him

in

his

official

capacity, concluding that “[i]n order to make its service effective
as to the [business entity], the summons must have been issued
against it in its corporate name”).
Defendant Siteworx has never been served with a summons in
its name, along with a copy of the complaint, and plaintiff’s most
recent notice indicates that service cannot occur, as it has no
address for Siteworx or its agent.

Therefore, Siteworx must be

dismissed.
B.

Plaintiff’s
Holland

Motion

for

Summary

Judgment

as

to

Defendant

Despite the various extensions and warnings by the Court about
his failure to respond to plaintiff’s motion for summary judgment,
Mr. Holland has still failed to file any response.
cause for the Court to grant the motion.

This alone is

See Joint Local Rule

7.1(c) (“Failure to timely respond to a motion may be grounds for
4

granting the motion.”).

The fact that plaintiff does not have

counsel does not excuse this failure.

See Fleet Engineers, Inc.

v. Mudguard Tech., LLC, No. 1:12-cv-1143, 2014 WL 12465464, at *1
(W.D. Mich. July 11, 2014) (entering default against defendant who
had been granted several extensions to find new counsel); Ward v.
Wal-Mart Stores, Inc., Civil No. 3:05-0777, 2006 WL 3098800, at *2
(M.D. Tenn. Oct. 30, 2006) (granting motion to dismiss case where
plaintiff was unrepresented; plaintiff had been given extension of
time to find a new attorney and warned that he must file a response
to the motion to dismiss).
Moreover, plaintiff’s motion to dismiss should be granted on
the merits. The Court need not expend judicial resources reviewing
these issues at length, as plaintiff’s motion thoroughly sets forth
the law and the record evidence that warrants dismissal.
In summary, the evidence in the records shows that plaintiff
is entitled to summary judgment.

The governing document, the GAI,

sets forth the terms under which plaintiff shall be paid—any time
plaintiff incurs loss or expense as a result of: (1) executing a
bond, (2) defendants’ failure to perform or comply with the GAI,
or (3) enforcing the GAI.

(See Doc. 23-2).

There can be no

dispute from the record evidence that the parties executed the
GAI, (id.); plaintiff executed bonds on defendants’ behalf, (doc.
23-4,

Affidavit

of

Michael

C.

Fisk

and

exhibits,

at

6-11);

plaintiff paid a claim pursuant to those bonds, (id. at 24);
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plaintiff

demanded

payment

and

collateral,

which

defendants

refused to provide, (id. at 2, 26, 29); and plaintiff has incurred
costs pursuing recovery of the amount owed, (id. at 2).
In sum, Mr. Holland has failed to oppose plaintiff’s motion
for summary judgment, and the Court’s own independent review of
the record yields the conclusion that plaintiff is entitled to
judgment as a matter of law.
Therefore, having reviewed this matter, and the Court being
sufficiently advised, IT IS ORDERED that
(1) the claims asserted against Defendant Siteworx be, and
are hereby, DISMISSED WITHOUT PREJUDICE;
(2) plaintiff’s motion for summary judgment (Doc. 23) be, and
is hereby, GRANTED as to Defendant Kenneth Holland; and
(3) within 10 days from entry of this order, plaintiff shall
file

a

supplemental

brief

with

evidentiary

support

providing

further clarification as to the amount plaintiff claims is owed
under the GAI. Review of plaintiff’s previous submissions reflects
some discrepancies.
This 15th day of November, 2017.

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