Court Opinion

ID: 4101073
Source: CourtListenerOpinion
Date Created: 2016-11-22 17:01:47.080515+00
Date Added: 2024-06-11T14:15:35.234732
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

 HARTFORD FIRE INSURANCE CO.,

         Plaintiff,
                 v.                                          Civil Action No. 16-285 (JDB)
 VISTA CONTRACTING, INC., et al.

         Defendants.

                                 MEMORANDUM OPINION

       Plaintiff Hartford Fire Insurance Co. (Hartford) files this motion for default judgment under

Federal Rule of Civil Procedure 55(b)(2) against Vista Contracting, Inc., in this breach of contract

case. After Vista Contracting failed to appear or in any way respond to plaintiff’s complaint, the

clerk entered default under Federal Rule of Civil Procedure 55(a). Given that Vista has not

appeared or given any indication that it intends to defend against this suit, the Court will grant

plaintiff’s motion and award damages in the amount of $131,233.06.

                                        BACKGROUND

       The following facts are according to Hartford’s complaint, and are taken as true for the

purposes of liability. See Thomson v. Wooster, 114 U.S. 104, 111 (1885) (plaintiff’s claims taken

as true after entry of default); City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137

(2d Cir. 2011) (same). Hartford is an insurance company that underwrote surety bonds for Vista,

a general contractor. Compl. [ECF No. 1] ¶ 4. Vista and its owner, Stjepan Sostaric, and his then-

spouse, Nancy Sostaric, each entered into General Indemnity Agreements with Hartford in

exchange for the surety bonds.      Id. ¶¶ 6–7.       The Indemnity Agreements required that the

indemnitors (that is, Vista, Stjepan, and Nancy) “indemnify, exonerate and hold Hartford harmless

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from and against all Loss, claims, demands, liabilities, suits and causes of action which are in any

way related to any Underwriting activities, Bonds or this Agreement.” Gen. Indem. Agreement

[ECF No. 1-1] ¶ 5; Compl. ¶ 13. The Agreement defines “Loss” as

        all manner of losses, costs, expenses or fees of any kind . . . which are paid . . . by Hartford
        as a result of or in any way relating to the entering into and enforcement of this Agreement
        or the Underwriting of any Bonds. Loss shall include, without limitation, any and all
        expenditure relating to Hartford’s financial investigations, claim investigations, claim
        payments, payments to discharge liability and Bond related litigation of any nature[.]

Gen. Indem. Agreement ¶ 1(e). The Agreement also states that all indemnitors are jointly and

severally liable. Id. ¶ 14.

        Hartford is incorporated in Connecticut, with its principal place of business there as well.

Compl. ¶ 4. Vista is incorporated in the District of Columbia, with its principal place of business

in Virginia. Id. ¶ 5. Stjepan is a resident of Virginia. Id. ¶ 6. Nancy is a resident of the District

of Columbia. Id. ¶ 7.

        Vista was awarded one construction contract with the Bureau of Engraving and Printing

and another with Virginia Railway Express. Id. ¶¶ 19, 21. Hartford furnished Vista with

performance bonds for both of these contracts. Id. At the time the complaint was first filed in

February 2016, Hartford had incurred $111,389 in losses related to the bonds on those projects,

and estimated it would incur another $76,979. Id. ¶¶ 58, 59. Hartford failed in its attempts to

collect this amount from the indemnitors, and therefore initiated this action. Id. ¶¶ 48–53.

        This complaint was filed and properly served on the defendants in February 2016. Stjepan

timely answered the complaint and continues to defend against these claims. See Stjepan’s Ans.

[ECF No. 5]. Nancy filed an answer and informed the Court and plaintiff of her ongoing

bankruptcy proceedings. See Nancy’s Ans. [ECF No. 10]. Vista, however, did not answer the

complaint or otherwise communicate with plaintiff or the Court. Hartford then moved for entry

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of default by the clerk under Rule 55(a) and entry of default judgment by the court under 55(b)(2).

See Default Mot. [ECF No. 9]. The clerk entered default on April 5, 2016. See Entry of Default

[ECF No. 11].

       In August 2016, Hartford filed a supplemental brief in support of its motion for default

judgment, updating Vista’s liability amount: Hartford states that Vista is liable for $131,233.06

plus interest and attorney’s fees. See Supp. to Default Mot. [ECF No. 15] ¶ 13. Hartford states

that it has “paid $343,109.63 to resolve various claims made on the payment bonds” issued for the

two construction projects. Id. ¶ 12(b). It recovered $250,701.34 in contract payment to offset that

amount. Id. ¶ 12(c). Hartford asserts that it further incurred $7,321.12 in legal expenses regarding

a suit from another company on one of Vista’s projects, and $31,503.66 in legal expenses pursuing

recovery from the indemnitors, as of July 31, 2016. Id. ¶ 12(d), (e). Thus, according to Hartford,

Vista is liable for $131,233.06 plus interest and attorney’s fees since that date. Id. ¶ 13.

                                           DISCUSSION

   A. Liability

       Federal Rule of Civil Procedure 55(a) provides that a clerk of the court must enter default

when “a party against whom judgment for affirmative relief is sought has failed to plead or

otherwise defend, and that failure is shown by affidavit or otherwise.” Fed. R. Civ. P. 55(a). After

the clerk has entered default, the court may enter a default judgment under Rule 55(b)(2).

Although default judgments are disfavored, they are appropriate when a party has entirely failed

to defend against a complaint. See Jackson v. Beech, 636 F.2d 831, 835–36 (D.C. Cir. 1980).

“The determination of whether default judgment is appropriate is committed to the discretion of

the trial court.” Int’l Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531
F. Supp. 2d 56, 57 (D.D.C. 2008) (citing Jackson, 636 F.2d at 836). Once default is entered by the

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clerk, the court assumes that all allegations in the well-pleaded complaint are true for the purpose

of determining whether to enter default judgment. See Thomson, 114 U.S. at 111; Mickalis Pawn

Shop, LLC, 645 F.3d at 137.

   Here, Vista has been entirely unresponsive to the complaint. It has not filed any answer in

court, nor has it informally reached out to the plaintiff.          Cf. H.F. Livermore Corp. v.

Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970) (per curiam) (discussing

the additional notice requirements that might be applicable to a defendant who does not respond

to a complaint but who does communicate with the plaintiff indicating an intent to defend against

the suit). Moreover, the allegations of the complaint, if taken as true, are sufficient to establish

Vista’s liability. Hartford alleges that Vista was contractually obligated to indemnify Hartford

against any claims on the bonds, and that Vista failed to do so after Hartford made a proper request.

See generally Compl. Hence, default judgment is proper. See H.F. Livermore Corp., 432 F.2d at

691; Serv. Emps. Int’l Union Nat’l Pension Fund v. Glenn’s Bldg. Servs., Inc., CA No. 14-1942

(JDB), 2016 WL 1452328, at *1 (D.D.C. Apr. 13, 2016).

                                             B. Damages

       Entering default judgment establishes Vista’s liability, but it does not address the proper

amount of damages. The Court has an obligation to assess damages independently. See SEC v.

Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir. 1975); Serv. Emps. Int’l Union v. Glenn’s Bldg.

Servs., Inc., CA No. 14-1942 (JDB), 2016 WL 4132192, at *1 (D.D.C. Aug. 3, 2016). The Court

may rely on affidavits or documentary evidence, and need not hold a hearing to determine the

proper amount. Serv. Emps. Int’l Union, 2016 WL 4132192, at *1; see also Transatlantic Marine

Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997). Furthermore, the

Court may enter default judgment against one defendant and not others, as long as the nature of

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the claim is not such that “as a matter of law, no one defendant may be liable unless all defendants

are liable.” Carter v. District of Columbia, 795 F.2d 116, 137 (D.C. Cir. 1986) (quoting 6 J. Moore,

Moore's Federal Practice ¶ 55.06, at 55–38 to 55–39 (2d ed. 1985)); see also Frow v. De La Vega,

82 U.S. (15 Wall) 552 (1872) (declining to enter default judgment against one defendant in joint

conspiracy suit).

       Here, Hartford has presented a declaration from the manager of its Bond Claims

Department attesting to the amount it paid on each of the Vista bonds. See Thomas Decl. [ECF

No. 15-1]. It also presents a copy of the projects’ accounting documents reflecting those same

payments. See Virginia Railway Express Account [ECF No. 15-2, Ex. 2]; Bureau of Engraving

and Printing Account [ECF No. 15-2, Ex. 3]. In addition, Hartford provides numerous other bank

records, affidavits, and settlement agreements supporting each element of the claimed amount.

See Supp. to Default Mot., Exhibits [ECF No. 15-2, Exs. 4–19]. Finally, it presents invoices for

the legal expenses it incurred litigating other claims on the bonds and this claim against the

indemnitors. See Supp. to Default Mot. Exhibits [ECF No. 15-2, Exs. 15–24]. This evidence is

sufficient to support a determination that Vista is liable for the $131,233.06 (as of July 31, 2016)

that Hartford requests. See Flynn v. Jocanz, Inc., 480 F. Supp. 2d 218, 220 (D.D.C. 2007).

                                           CONCLUSION

       For these reasons, Hartford’s motion for entry of default judgment against defendant Vista

Contracting will be granted and defendant Vista Contracting will be ordered to pay damages in the

amount of $131,233.06. A separate order has been issued on this date.

                                                                                /s/
                                                                            JOHN D. BATES
                                                                       United States District Judge
Dated: November 22, 2016

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