Hanover Insurance Company v. Heritagecrest, LLC et al

Filing 38

DEFAULT JUDGMENT in favor of Hanover Insurance Company and against Defendants in the amount of $2,924,574.11. Signed by Clerk of Court, Lance S. Wilson on 9/20/2013. (Copies have been distributed pursuant to the NEF - SLR)

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DAVID R. JOHNSON
[e-mail]
Nevada Bar No. 6696
JARED M. SECHRIST
[e-mail]
Nevada Bar No. 10439
WATT, TIEDER, HOFFAR & FITZGERALD, L.L.P.
6325 South Rainbow Boulevard, Suite 110
Las Vegas, NV 89118
Telephone: [phone]
Facsimile:
702-822-2650
Attorneys for Plaintiff
The Hanover Insurance Company

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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THE HANOVER INSURANCE COMPANY,
a New Hampshire corporation,

CASE NO.: 2:12-cv-00724-APG-NJK

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Plaintiff,
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AMENDED DEFAULT JUDGMENT
AGAINST DEFENDANTS

vs.
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HERITAGECREST, LLC, a Nevada limited
liability company; DFD HOLDINGS, LLC, a
Nevada limited liability company; PIR FOAM
SUPPLY, LLC, a Nevada limited liability
company; BROOKSPARK 291, LLC, a
Nevada limited liability company; WRG
CLAIM, LLC, a Nevada limited liability
company; WORLD MARKET CLAIM, LLC,
a Nevada limited liability company;
CYNTHIA DALEY, Individually and as
Trustee of the CWD NEVADA TRUST;
CWD NEVADA TRUST, DEE DALEY
Individually and as Trustee of the DFD
NEVADA TRUST; DFD NEVADA TRUST,
Defendants.

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The Court, having considered Plaintiff The Hanover Insurance Company’s (“Hanover”)

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Complaint against Defendants Heritagecrest, LLC, DFD Holdings, LLC, PIR Foam Supply, LLC,

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Brookspark 291, LLC, WRG Claim, LLC, World Market Claim, LLC, Cynthia Daley, as trustee

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for the CWD Nevada Trust, CWD Nevada Trust, Dee Daley, individually and as trustee for the

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DFD Nevada Trust, and the DFD Nevada Trust (collectively, “Defendants”), the default entered

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against Defendants, and each of them, for failing to appear or otherwise respond to the Complaint

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despite proper service of same and the summons, and Plaintiff’s Application for Entry of Default

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Judgment against Defendants and Plaintiff’s Supplement thereto, including the accompanying

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Affidavit and Declaration of Michelle Smith Cotto, Esq. (collectively, “Smith Cotto Affidavit”)
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and all exhibits thereto, the supporting Memorandum of Points and Authorities, the argument and

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facts presented at the hearing held on Plaintiff’s Application for Default Judgment before this

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Court on September 4, 2013, and the Court being fully advised of the premises, finds as follows:

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1.

Defendants, and each of them, executed and agreed to be bound by the terms of the

Indemnity Agreement attached to the Smith Cotto Affidavit as Exhibit 1 (“Indemnity
Agreement”).

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2.

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In partial reliance upon the Defendants’ execution of the Indemnity Agreement,

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Plaintiff issued the bonds identified in Exhibits 2 and 3 (the “Bonds”) to the Smith Cotto

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Affidavit on behalf of Mechanical Insulation Specialists in the collective amount of

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$4,697,049.12 (performance bonds + payment bonds) in connection with which Plaintiff has

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received and continues to receive claims.

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3.

Pursuant to the terms of the Indemnity Agreement, Defendants are jointly and

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severally liable to indemnify and hold harmless Plaintiff for losses it incurs for claims on the
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Bonds.
4.

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Further, pursuant to the Indemnity Agreement, Defendants are jointly and

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severally liable to post collateral in the type and amount demanded by Plaintiff that Plaintiff, in its

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sole discretion, deems adequate to protect Plaintiff against anticipated future losses for Bond

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claims.

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5.

Mechanical Insulation Specialists declaration of bankruptcy and abandonment of

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its projects has required Plaintiff to pay a substantial number of claims. In connection with these
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claims, Plaintiff has been and will continue to be sued by Mechanical Insulation Specialists’

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subcontractors and suppliers seeking payment.

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6.

Pursuant to the terms of the Indemnity Agreement, Defendants expressly agreed

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that Plaintiff’s proof of losses related to Bond claims, such as the proof of payments attached to
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the Smith Cotto Affidavit, would be conclusive evidence of the fact and amount of Defendants’
liability for those payments.
7.

Plaintiff has proven to this Court’s satisfaction that as of June 20, 2013 it has

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incurred the total amount of $924,574.11 to investigate and resolve claims on the Bonds, which

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includes consultant and legal expenses for investigating the status of the bonded projects and

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investigating and resolving the claims and related litigation.

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8.

Plaintiff has proven to this Court’s satisfaction that it faces continued exposure for

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losses on the Bonds, including claims, costs, expenses and attorneys’ fees, in the amount of

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$2,000,000.00 for payments to satisfy bonded obligations for which the Defendants are obligated

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to indemnify Plaintiff and post collateral pursuant to the Indemnity Agreement they signed.

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Defendants are expressly, and presently, liable to Plaintiff to post $2,000,000.00 of cash collateral

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with Plaintiff based upon Defendants’ obligation to post collateral with Plaintiff contained in the

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Indemnity Agreement.
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Accordingly, IT IS HEREBY ORDERED THAT:

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1.

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Plaintiff is awarded the following damages against Defendants, jointly and

severally:
a.

$924,574.11 for the amount Plaintiff has already incurred to resolve
bonded obligations as of June 20, 2013; and

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b.

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$2,000,000.00 cash collateral to be posted by Defendants with
Plaintiff as security for Plaintiff’s exposure for anticipated future

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Bond losses;

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c.

Accordingly, Plaintiff is awarded the Judgment against Defendants,

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jointly and severally, in the total amount of $2,924,574.11

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($924,574.11 [payments made and already incurred by Plaintiff] +

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$2,000,000 [anticipated future payments by Plaintiff for Bond

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claims]).

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///

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///

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2.

The total Judgment of $2,924,574.11 against Defendants jointly and

severally and in favor of Plaintiff shall accrue post-judgment interest pursuant to 28 U.S.C. §
1961.

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DATED: September 20, 2013 at 3:12 p.m.

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_________________________________________
UNITED STATES DISTRICT JUDGE

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Judgment Prepared By:
WATT, TIEDER, HOFFAR
& FITZGERALD, L.L.P.

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By

__________________________
DAVID R. JOHNSON
[e-mail]
Nevada Bar No. 6696
JARED M. SECHRIST
[e-mail]
Nevada Bar No. 10439
6325 S. Rainbow Boulevard
Suite 110
Las Vegas, NV 89118
Attorneys for Plaintiff

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