Fidelity and Deposit Company of Maryland et al v. Benetech, LLC et al

Filing 46

ORDER & REASONS denying 28 Motion for Summary Judgment. Signed by Judge Helen G. Berrigan on 07/02/2012. (kac, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FIDELITY AND DEPOSIT COMPANY
OF MARYLAND and ZURICH AMERICAN
INSURANCE COMPANY

CIVIL ACTION

VERSUS

NO. 11-2722

BENETECH, LLC
WILLIAM J. BENNETT, and
WILLIAM A. BENNETT

SECTION “C” (1)

ORDER AND REASONS1
This matter is before the Court on a Motion for Summary Judgment filed by Plaintiffs,
Fidelity and Deposit Company of Maryland and Zurich American Insurance Company. Rec.
Doc. 28. The motion is opposed by Defendants, Benetech, William J. Bennett, and William A.
Bennett. Rec. Doc. 34. Having reviewed the record, the memoranda of counsel, and the law, the
motion is DENIED.
I. Background
Plaintiffs in this action seek indemnity for payments made to third parties for bonds
issued to Defendants. Rec. Doc. 28-1, 3. These bonds were awarded so that Defendants could

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Jason A. Danowsky, a first year student at the University of Texas School of Law,
assisted in the preparation of this Order & Reasons.
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perform construction work for the US Army Corps of Engineers. Rec. Doc. 34, 2. Plaintiffs have
been reimbursed in part by unidentified third parties. Rec. Doc. 28-1, 2.
The Indemnity Agreement entitles Plaintiffs
to charge for any and all disbursements made by it in good faith and about the
matters herein contemplated by this Agreement under the belief that it is or was
liable for the sums and amounts so disbursed; and that the vouchers or other
evidence of any such payments made by the Surety [Plaintiffs] shall be prima
facie evidence of the fact and amount of the liability to the Surety.
Rec. Doc. 28-2, 11. The Indemnity Agreement also entitles Plaintiffs to all other “losses and/or
expenses of whatsoever kind or nature (including, but not limited to, interests, court costs and
counsel fees)” Id.
II. Standards
Summary judgment is proper when “the record indicates that there is no genuine issue as
to any material fact” and when the party moving for summary judgment is “entitled to judgment
as a matter of law.” FED.R.CIV.P. 56(a). A genuine issue of material fact exists when, based on
the evidence, a reasonable jury could return a verdict for the non-moving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247–248 (1986). When considering a motion for summary
judgment, this Court “will review the facts drawing all inferences most favorable to the party
opposing the motion.” Reid v. State Farm Mut. Auto Ins. Co., 784 F.2d 577, 578 (5th.Cir.1986).
However, “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons,
it cannot present facts essential to justify its opposition, the court may: (1) defer considering the
motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3)
issue any other appropriate order. FED.R.CIV.P. 56(d). “To obtain a continuance of a motion for
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summary judgment in order to obtain further discovery, a party must indicate to the court by
some statement, preferably in writing (but not necessarily in the form of an affidavit), why he
needs additional discovery and how the additional discovery will create a genuine issue of
material fact.” Krim v. BancTexas Grp., Inc., 989 F.2d 1435, 1442 (5th Cir. 1993). The
nonmoving party “may not simply rely on vague assertions that additional discovery will
produce needed, but unspecified facts.” Id (citing Sec. and Exch. Comm’n v. Spence & Green
Chem. Co., 612 F.2d 896, 901 (5th Cir. 1980)).
III. Law and Analysis2
Defendants argue that there is missing information which, if revealed through discovery,
may raise genuine issues of material fact. For example, Plaintiffs admit to having been
indemnified by more than $4 million dollars by “third parties.” Rec. Doc. 28-1, 2. These third
parties have not been identified, nor have the motives or contractual obligations for these
indemnifications been identified. Even if Defendants’ theory that a purported third party
attempted to use Defendants as a “straw man,” (Rec. Doc. 34, 8), is incorrect, the third parties
and their contracts may impact the Defendants’ legal rights.3
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Plaintiffs’ reply does not address the below issues raised by Defendants’ initial
Opposition to Motion for Summary Judgment under the mistaken belief that “this Court did not
grant the Defendants leave to file that opposition.” Rec. Doc. 38-2, 2. Plaintiffs appear to have
misinterpreted this Court’s June 4th Order, which denied the Defendants’ motion to continue
because a responsive opposition was more appropriate. Rec. Doc. 33 (“If the defendants oppose
the plaintiffs’ motion on procedural grounds, they should file an opposition to that effect”).
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Defendants assert elsewhere that various third parties are responsible for Defendants’
receiving the bond (Rec. Doc. 35-2, 2), or are ultimately attributable for Plaintiffs’ claims (Rec.
Doc. 35-2, 3), yet have not offered a legal theory as to how these actions relieve Defendants of
their contractual obligations to Plaintiffs.
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Likewise, the indemnity agreement requires that Plaintiffs’ payments be made in good
faith and that Plaintiffs provide Defendants vouchers or other evidence of those payments. “The
general rules which govern the interpretation of other contracts apply in construing a contract of
indemnity.” Sovereign Ins. Co. v. Texas Pipe Line Co., 488 So.2d 982, 984 (La. 1986). “A
contract is the law between the parties, and is read for its plain meaning.” Chailland Business
Consultants v. Duplantis, 897 So.2d 117, 123 (La.App. 1st Cir., 2004). Defendants note that
Plaintiffs have not provided evidence of the above requirements, and Defendants’ theory
regarding third parties may entail a lack of good faith. Because Defendants have identified
potentially relevant information not yet available to them, discovery could create an issue of
material fact, therefore summary judgment is inappropriate.
Finally, even ignoring the possibility that discovery relating to the above issues could
raise an issue of material fact, a question of fact remains as to damages. Plaintiffs provides a
single spreadsheet listing the damages claimed. Rec. Doc. 28-2, 20. Defendants counter with
evidence indicating that at least some of the indemnified amount has been paid. Rec. Doc. 35-2,
3; Rec. Doc. 35-3, 66-94. Because there is a question of fact as to the amount of damages owed,
summary judgment is inappropriate.4
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The indemnity agreement additionally states“[s]eparate suits may be brought hereunder
as causes of action accrue, and the bringing of suit or the recovery of judgment upon any cause
of action shall not prejudice or bar the bringing of other suits, upon other causes of action,
whether theretofore or thereafter arising.” Rec. Doc. 28-2, 13. This Court is confused by
Defendants’ argument that Plaintiffs claim the right “to additional judgments [presumably
through summary proceedings] for future losses.” Rec. Doc. 34, 11. (bracket parenthetical in the
original) (discussing Plaintiffs’ argument sin Rec. Doc. 28-1, 18). Assuming future causes of
action occur, Plaintiffs certainly have the right to file future suits and, in those suits, future
motions for summary judgment. In any event, any issues raised by this portion of the Indemnity
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IV. Conclusion
Accordingly,
IT IS ORDERED that Plaintiffs’ Motion for Summary Judgment is hereby DENIED.
Rec. Doc. 28.

New Orleans, Louisiana, this 2nd day of July, 2012.

____________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE

Agreement are immaterial to the current motion, assuming those suits arise from separate causes
of action.
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