Opinion ID: 2981122
Heading Depth: 3
Heading Rank: 1

Heading: Properly Due & Owing

Text: Contrary to Appellants’ suggestion, the Agreement does not require Travelers to show that it paid claims that were “properly due and owing” in order to trigger indemnification coverage. Rather, the Agreement provides that “[a]n itemized, sworn statement by an employee of [Travelers], or other evidence of payment” will suffice as “prima facie evidence of the propriety, amount and existence of [JOA’s and Akinwusi’s] liability.” (Agreement ¶ 3.) The “properly due and owing” language cited by Appellants refers to one of many grounds for a default of the Agreement, which triggers additional remedies like the reassignment of contracts and the ability to order contract owners to stop payment. (See id. ¶¶ 1, 6.) Importantly, however, Travelers did not allege default or invoke its default remedies in this litigation until it responded to Appellants’ Rule 60 motion for post-judgment relief. (See generally Compl.; Appellants’ Br. at 34 (noting that Travelers did not assert default in their motion); Travelers’ Br. at 2 (noting that the default remedies “had nothing to - 10 - No. 09-1610 Travelers Cas. & Surety Co. of Am. v. J.O.A. Constr. Co. et al. do with either Travelers’ claims in the Complaint, or its subsequent Motion for Summary Judgment”).) The “properly due and owing” default standard thus had no bearing on the district court’s entry of summary judgment. See Travelers I, 2009 WL 928848, at –4. Still, Appellants contend that the Agreement’s use of the word “propriety” in the indemnification clause imparts a separate, affirmative obligation for Travelers to show that it paid claims that were “properly due and owing.” We reject this interpretation because it overlooks the fact that the indemnification provision unambiguously accepts Travelers’ sworn statement of losses as “prima facie evidence of the propriety, amount and existence of [JOA’s and Akinwusi’s] liability.” (Agreement ¶ 3 (emphasis added).)