Great American Insurance Company v. T.R. Driscoll, Inc. et al

Filing 43

ORDER: The court GRANTS the motion to stay the proceedings against James T. Driscoll, Jr. and Judy L. Driscoll 36 and GRANTS plaintiff's motion for summary judgment 39 . The court AWARDS plaintiff judgment in the amount of $1,025,449.64 against T.R. Driscoll, Inc. James T. Driscoll, Jr. and Judy L. Driscoll shall file an update with the court every sixty days concerning their bankruptcy case. Signed by Chief Judge James C. Dever III on 9/25/2012. (Sawyer, D.)

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

SOUTHERN DMSION

No.7:11-CV-167-D

GREAT AMERICAN INSURANCE
COMPANY,
Plaintiff,

v.
T.R. DRISCOLL, INC., ET AL.,
Defendants.

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ORDER

On August 8, 2011, Great American Insurance Company ("plaintiff" or "Great American")
filed this action against T.R. Driscoll, Inc. ("T.R. Driscoll, Inc.',), James T. Driscoll, Jr., Judy L.
Driscoll, Robert L. Driscoll, Paula P. Driscoll, William S. Driscoll, and Sharon S. Driscoll
("individual defendants") (collectively, "defendants") [D.E. 1]. On October 5, 2011, individual
defendants filed an answer [D.E. 21]. On October 6, 2011, T.R. Driscoll, Inc. filed an answer [D.E.
23]. On June 18,2012, James T. Driscoll, Jr. and Judy L. Driscoll moved to stay the action against
them in light of their bankruptcy filing [D.E. 36]. On June 21,2012, plaintiff moved for summary
judgment against T.R. Driscoll, Inc. [D.E. 39]. Defendants did not file responses to plaintiff's
motion for summary judgment As explained below, the court grants both motions.
I.

On January 20, 1988, plaintiff entered into an indemnity agreement with defendants (the
"Agreement"). See Agreement [D.E. 40-1] 2. Pursuant to the Agreement, plaintiffpromised to issue
payment and performance bonds on behalf ofT.R. Driscoll, Inc. in exchange for premium payments
and defendants' promises to indemnify plaintiff against any claims made against the bonds. See id.

2-4. Specifically, the Agreement obligated defendants to
exonerate, indemnify, and keep indemnified [plaintift] from and against any and all
liability for losses and/or expenses ofwhatsoever kind or nature (including, but not
limited to, interest, court costs and counsel fees) and from and against any and all
such losses and/or expenses which [plaintift] may sustain and incur: (1) By reason
of having executed or procured the execution of the Bonds, (2) By reason of the
failure of [defendants] to perfonn or comply with the covenants and conditions of
this Agreement or (3) In enforcing any of the covenants and conditions of this
Agreement.
Id.2.
Plaintiff issued three payment and perfonnance bonds on T.R. Driscoll, Inc.'s behalfthat are
relevant to this action. On October 22, 2009, plaintiff issued a bond to Dellinger, Inc. for T.R.
Driscoll, Inc.'s work on the Johnston County WTP Miex (the "WTP Miex Project"). See Beach

Aff. [D.E. 40-2]

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2(c); Resp. Pl.'s Req. Admis. [D.E. 40-3] 3-4. On January 20,2010, plaintiff

issued a bond to Robeson County for T.R. Driscoll, Inc.' s work on the Robeson County Department
of Social Services Building (the "Robeson County Project"). See Beach Aff.

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2(b); Resp. Pl.'s

Req. Admis. 3-4. On March 18,2010, plaintiff issued a bond to John S. Clark Company, LLC, for
T.R. Driscoll, Inc.' s work on the o'Berry N euro Medical Center (the "O'Berry Project"). See Beach

Aff.

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2(a); Resp. Pl.'s Req. Admis. 3-4.
T .R. Driscoll, Inc. failed to make payments to some subcontractors and suppliers, see Resp.

Pl.'s Req. Admis. 5, and plaintiff received various payment bond claims related to the WTP Miex
Project, the Robeson County Project, and the 0' Berry Project. See Beach Aff. ~~ 4-6, 11-13, 18-20.
T.R. Driscoll, Inc. also failed to fully perfonn on the O'Berry Project, see Resp. Pl.'s Req. Admis.
5, and plaintiff received a perfonnance bond claim from John S. Clark Company, LLC. See Beach
Aff. ~~ 25-27. Plaintiffinfonned T.R. Driscoll, Inc. of the payment and perfonnance bond claims
and ultimately concluded that the claims were valid. See id. ~ 5-7, 12-14, 19-21,25; cf. Resp.

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Pl.'s Req. Admis. 5. Plaintiff paid $49,472.23 to settle the WTP Miex Project payment bond
claims, $397,922.72 to settle the Robeson County Project payment bond claims, $303,628.94 to
settle the O'Berry Project payment bond claims, and $216,540.72 to settle the O'Berry Project
perfonnance bond claim. See Beach Aft:

W 10,

17, 24, 27. In addition, plaintiff expended

$33,896.18 in attorney's fees, $5,886.96 in investigation expenses, and $18,101.89 in consultant
fees because ofT.R. Driscoll, Inc.' s failure to defend, indemnify, and exonerate plaintiff ofthe bond
claims. See id.

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28. In total, plaintiff expended $1,025,449.64 because of T.R. Driscoll, Inc/s

failure to comply with the tenns of the Agreement. Id. ~ 30.
On August 8,2011, plaintiff filed this suit against defendants asserting, inter alia, the claim
of contractual indemnity. See Compl. On June 18,2012, defendants James T. Driscoll, Jr., and
Judy L. Driscoll moved to stay the action against them because of their pending bankruptcy
proceedings. See Mot. Stay 1. On June 21,2012, plaintiff moved for summary judgment against
T.R. Driscoll, Inc. on the contractual indemnity claim. See Mot. Summ. J. 1. T.R. Driscoll, Inc. did
not file a response to the motion.

n.
First, James T. Driscoll, Jr., and Judy L. Driscoll move the court to stay the action as to them.
See Mot. Stay 1. In the motion, James T. Driscoll, Jr., and Judy L. Driscoll state that they initiated
proceedings in the United States Bankruptcy Court for the Eastern District of North Carolina
pursuant to Chapter 11 of the Title 11 of United States Code. Id.; see [D.E. 6], In re Driscoll, No.
12-04011-8-JRL (Bankr. E.D.N.C. May 30,2012). Accordingly, the court stays the action against
James T. Driscoll, Jr., and Judy L. Driscoll. See 11 U.S.C. § 362(a)(1).
Second, plaintiff seeks summary judgment on its contractual indemnity claim against T.R.
Driscoll, Inc. See Mot. Summ. J. 1-2. Summary judgment is proper when ''the movant shows that
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there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter
oflaw." Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v.
Liberty Lobby. Inc., 477 U.S. 242, 247-48 (1986). The moving party bears the initial burden of
demonstrating the absence of a genuine issue ofmaterial fact. Celotex, 477 U. S. at 325. After the
moving party has met this burden, the nonmoving party "must come forward with specific facts
showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986) (emphasis and quotation omitted). A genuine dispute about a material fact
exists "ifthe evidence is such that a reasonable jury could return a verdict for the nonmoving party."
Anderson, 477 U.S. at 248. The court views the evidence and the inferences drawn therefrom in the
light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).
Plaintiff contends that there is no genuine issue of material fact regarding the contractual
indemnity claim against T.R. Driscoll, Inc. and that plaintiff is entitled to judgment as a matter of
law on the basis of the Agreement. See Mem. Supp. Mot. Summ. J. [D.E. 40] 5-7. "Indemnity
contracts are entered into to save one party harmless from some loss or obligation which it has
incurred or may incur to a third party." Kirkpatrick & Assocs .. Inc. v. Wickes Corp., 53 N.C. App.
306,308,280 S.E.2d 632, 634 (1981); see Dixie Container Corp. v. Dale, 273 N.C. 624, 627-28,
160 S.E.2d 708, 711 (1968). An indemnity contract "will be construed to cover all losses, damages,
and liabilities which reasonably appear to have been within the contemplation of the parties[.]"
Kirkpatrick & Assocs., 53 N.C. App. at 308,280 S.E.2d at 634; see Dixie Container Corp., 273 N.C.
at 627, 160 S.E.2d at 711. The Agreement expressly obligates T.R. Driscoll, Inc. to indemnify
plaintiff against any expenses plaintiff might incur for having issued the payment and performance
bonds. See Agreement 2; see also Kirkpatrick & Assocs., 53 N.C. App. at 308, 280 S.E.2d at 634.
Plaintiff expended a total of $1,025,449.64 because ofthe bonds issued on behalf ofT.R. Driscoll,
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Inc. See Beach Aff.

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30. Accordingly, plaintiff is entitled to judgment as a matter of law on the

contractual indemnity claim against T.R. Driscoll, Inc.

m.
The court GRANTS the motion to stay the proceedings against James T. Driscoll, Jr., and
Judy L. Driscoll [D.E. 36] and GRANTS plaintiff's motion for summary judgment [D.E. 39]. The
court AWARDS plaintiff judgment in the amount of $1,025,449.64 against T.R. Driscoll, Inc.
James T. Driscoll, Jr., and Judy L. Driscoll shall file an update with the court every sixty days
concerning their bankruptcy case.
SO ORDERED. This:J..l day of September 2012.

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