Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-1_02-cv-02146/USCOURTS-alnd-1_02-cv-02146-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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Markel claims that the defendants failed to honor the collateralization agreement. 1

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

EASTERN DIVISION

MARKEL INSURANCE COMPANY, )

)

Plaintiff, )

)

v. ) Civil Action No.: CV-02-PT-2146-E

)

STARLIT ROBIN BUSH, )

)

Defendant. )

MEMORANDUM OPINION

This cause comes on to be heard upon Plaintiff Markel Insurance Company’s (“Markel”)

Motion for Summary Judgment filed on August 7, 2006.

FACTS AND PROCEDURAL HISTORY

This cause arises from Markel’s issuance of a series of performance and payment bonds

on behalf of ABF Construction Company, Inc. (“ABF”) for use in projects involving various

political subdivisions. ABF defaulted on three of these performance bonds, and Markel, as

surety, was held liable for the costs of ABF’s default and took steps to discharge its liability. 

Prior to ABF’s default, Markel executed a General Agreement of Indemnity (“GAI”) with ABF,

and with Anthony Bush and Starlit Robin Bush (“Bush”), in which each agreed, separately and

severally, to “exonerate, defend and hold Markel harmless from any loss, cost or expense which

might result from the issuance” of the bonds. ABF and the Bushes also agreed to “collateralize

any reserve established by Markel in anticipation of any loss under any bond issued” on their

behalf. Markel alleges that the defendants, including Bush, did not perform their obligations 1

under the GAI.

FILED

 2006 Oct-20 AM 10:07

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 1:02-cv-02146-RBP Document 40 Filed 10/20/06 Page 1 of 5
In light of the Chapter 11 proceedings, Markel had filed a Notice of Dismissal pursuant to Rule 41(a)(1)(i) 2

of the Federal Rules of Civil Procedure. On August 21, 2003, pursuant to the report and recommendation of a

magistrate judge, this court granted Markel’s Motion for Summary Judgment against ABF.

Although this court’s 2003 order also left Markel the option of petitioning to reinstate this cause as to 3

Anthony Bush, it has not chosen to do so at this time.

 This value was calculated by adding Markel’s actual losses ($752,066.52) and expenses ($345,671.93) 4

while subtracting the amount thus far recovered ($73,764.32).

Markel filed suit on September 3, 2002, seeking relief in the form of exoneration and

specific performance; injunctive relief; a temporary restraining order; and damages. Bush

responded on October 11, 2002, admitting that she had executed the GAI and that the bonds were

issued but denying most other material allegations of the complaint. On January 29, 2003, this

court dismissed the action against Bush, without prejudice, because Bush had filed a petition in

the United States Bankruptcy Court for the Northern District of Alabama - an action that

automatically called for a stay of this action pursuant to 11 U.S.C. § 362. This court further also

dismissed this action, again without prejudice, as to defendant ABF, who at that time was

engaged in Chapter 11 bankruptcy proceedings. This court noted in the order, however, that

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Markel was free to petition to reinstate the action upon the termination of proceedings in the

Bankruptcy Court. Markel so petitioned on February 27, 2006, and this court granted the petition

on March 6, 2006. On August 7, 2006, Markel moved for judgement as a matter of law, seeking 3

relief in the form of $1,023,974.13, “plus all interest permitted by law and all costs of this 4

action.” 

SUMMARY JUDGMENT STANDARD

Summary judgment may be granted based upon facts developed through pleadings,

discovery, and supplemental affidavits, etc., if together, they show that there is no genuine issue

as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). A dispute is

Case 1:02-cv-02146-RBP Document 40 Filed 10/20/06 Page 2 of 5
genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving

party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party moving for

summary judgment bears the initial burden of explaining the basis of his motion. Celotex, 477

U.S. at 323. “It is never enough [for the movant] simply to state that the non-moving party could

not meet their burden at trial.” Mullins v. Crowell, 228 F.3d 1305, 1313 (11th Cir. 2000)

(quotation omitted). The non-moving party then bears the burden of pointing to specific facts

demonstrating that there is a genuine issue of fact for trial. Celotex, 477 U.S. at 324. The nonmoving party “must either point to evidence in the record or present additional evidence

‘sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary

deficiency.’” Hammer v. Slater, 20 F.3d 1137, 1141 (11th Cir. 1994) (quotation omitted). 

Summary judgment is required where the non-moving party merely repeats its conclusory

allegations, unsupported by evidence showing an issue for trial. Comer v. City of Palm Bay, 265

F.3d 1186, 1192 (11th Cir. 2001) (citation omitted). 

Summary judgment will not be granted until a reasonable time has been allowed for

discovery. Comer, 265 F.3d at 1192. Moreover, “[w]hen deciding whether summary judgment

is appropriate, all evidence and reasonable factual inferences drawn therefrom are reviewed in a

light most favorable to the non-moving party.” Korman v. HBC Florida, Inc., 182 F.3d 1291,

1293 (11th Cir. 1999). Finally, the trial court must resolve all reasonable doubts in favor of the

non-moving party, although it need not resolve all doubts in a similar fashion. Earley v.

Champion Int’l Corp., 907 F.2d 1077, 1080 (11th Cir. 1990).

Case 1:02-cv-02146-RBP Document 40 Filed 10/20/06 Page 3 of 5
 As Bush did not respond to this court’s order to file a responsive brief, this section solely presents the 5

arguments Markel advanced in favor of its motion. The court notes that Bush was initially ordered to respond by

August 21, 2006. Bush did not respond by that date, and after a pretrial conference on August 25, 2006, the court

ordered Bush on August 30 to respond by October 1, 2006.

 Markel specifically notes the following from the GAI: 6

[Bush agrees that she] ... will pay and save [Markel] harmless from and against

every claim, demand, liability, cost, charge, suit, judgment and

expense which [Markel] may pay or incur (a) in consequence of

having executed, or procured the execution of, such bonds, or any

renewals or continuations thereof or substitutes thereof, including

fees of attorneys...b) in procuring, or attempting to procure, release

from liability; c) in bringing suit to enforce the obligation of any of

the Indemnitors or defending any action under this Agreement...In

the event of payment by [Markel], the Indemnitors agree to accept

the voucher or other evidence of such payment of prima facie

evidence of the propriety thereof, and of the Indemnitors’ liability

therefor to [Markel]. The Indemnitors will immediately pay over,

reimburse and make good to [Markel] all sums and amounts of

money which [Markel] shall pay or cause to be paid or become

liable to pay under the bonds, whether or not [Markel] shall have

paid out any part or all of such sums, or as charges and expenses of

whatever kind or nature including counsel, special counsel, and

consultant fees, by reason of the execution of said bond(s) or in

connection with any litigation, investigation or other matters

connected therewith.

The three bonds in question involved projects undertaken for Overstreet Electric Company, Inc. (penal 7

sum of $403,400); the Cleburne County Board of Education (penal sum of $1,871,500); and the Cleburne County

Hospital Board (penal sum of $2,397,500).

4

ARGUMENTS5

Markel contends that the express terms of the GAI entitle it to a finding of summary 6

judgment. As supporting evidence, Markel submits the affidavit of Jane Clifton, its Surety

Claims Manager who oversaw the bonds that Markel issued on ABF’s behalf. Clifton’s affidavit

states that ABF was found to be in default in the performance of three of the bonds Markel

7

issued, and that Markel, pursuant to the surety agreement, “was called upon to complete those

projects and discharge all remaining obligations owed by ABF.” Bush signed a GAI with Markel

in which she agreed to “exonerate, defend, and hold Markel harmless from any loss, cost or

Case 1:02-cv-02146-RBP Document 40 Filed 10/20/06 Page 4 of 5
Markel contends that indemnity agreements regarding losses by sureties similar to the one at issue in the 8

instant case “have been uniformly upheld and enforced in accordance with their terms in other jurisdictions.” To

buttress this contention, Markel cites the following cases from outside the jurisdiction: Fidelity & Deposit Co. of Md.

v. Bristol Steel & Iron Works, Inc., 722 F.2d 1160, 1163 (4th Cir. 1983); American Ins. Co. v. Gilbert, 319 F.Supp.

1315 (E.D. Mo. 1970); Elmore v, Morrison Assurance Co., 502 So. 2d 378 (Ala. 1987). Markel also cites the

former Fifth Circuit case of American Sur. Co. of N.Y. v. Inmon, 187 F.2d 784 (5th Cir. 1951).

5

expense, including attorneys’ fees, which might result from the issuance of the aforesaid bonds.” 

(Clifton Affidavit at 3.) Markel cites Frontier Ins. Co. v. Internat’l, Inc., 124 F.Supp.2d 1211

(N.D. Ala. 2000), as well as caselaw from other jurisdictions, for the proposition that “under a 8

valid indemnity agreement, a surety is entitled to reimbursement from a principal for claims

made pursuant to the agreement.” Id. at 1213. Markel argues that the GAI is just such a valid

indemnity agreement, leaving no genuine issue of material fact and thus entitling it to judgment

as a matter of law.

CONCLUSIONS OF THE COURT

In a recorded phone conference on October 20, 2006, Defendant-Bush acknowledged that

she has no response to Plaintiff-Markel’s Motion for Summary Judgment. It will be granted.

This the 20 day of October, 2006. th

 

 ROBERT B. PROPST

 SENIOR UNITED STATES DISTRICT JUDGE

Case 1:02-cv-02146-RBP Document 40 Filed 10/20/06 Page 5 of 5