The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
BE&K BUILDING GROUP, LLC, ) Case No. 1:20-cv-0638
)
Plaintiff/Counterclaim ) Judge J. Philip Calabrese
Defendant, )
) Magistrate Judge Thomas M. Parker
v. )
)
EVERGREEN NATIONAL )
INDEMNITY CO., )
)
Defendant/Third-Party )
Plaintiff, )
)
v. )
)
COCOA BEACH PLUMBING, INC., )
et al., )
)
Third-Party Defendants. )
)
OPINION AND ORDER
Third-Party Plaintiff Evergreen National Indemnity Co. moves for summary
judgment against Third-Party Defendants Douglas and Sheryl Green and for default
judgment for damages against Third-Party Defendants Cocoa Beach Plumbing, Inc.,
Advanced Beach Holding Company, LLC, Leaning Pines Campground, LLC, and
OFC Services, LLC (collectively, the “Third-Party Entities”). (ECF No. 56.) For the
reasons that follow, the Court GRANTS Evergreen’s motion.
BACKGROUND
This lawsuit arises from the construction of a hotel in South Carolina. (ECF
No. 1, ¶ 1, PageID #1.) Plaintiff BE&K Building Group, LLC served as the
construction manager and hired Third-Party Defendant Cocoa Beach Plumbing as a
subcontractor to install the hotel’s plumbing. (Id.) Douglas and Sheryl Green own
Cocoa Beach Plumbing. To ensure the plumbing work was properly and timely
completed, Cocoa Beach Plumbing obtained both a payment bond and a performance
bond from Evergreen National Indemnity (Id., ¶ 2; ECF No. 1-2; ECF No. 1-3.) As
consideration for those bonds, Cocoa Beach Plumbing entered into a general
indemnity agreement with Evergreen, which Mr. and Mrs. Green signed as individual
indemnitors and Advanced Beach Holding Company and Leaning Pines Campground
(which Mr. and Mrs. Green also own) signed as corporate/partnership indemnitors.
(ECF No. 56-1, PageID #675–76.)
Cocoa Beach Plumbing ultimately failed to fulfill its obligations under the
subcontract, and BE&K terminated the subcontract for cause. (ECF No. 1, ¶ 4,
PageID #2.) As a result, several of Cocoa Beach Plumbing’s vendors and suppliers
asserted claims against Evergreen under the payment bond, which Evergreen paid.
(ECF No. 56, PageID #624–25.) BE&K likewise submitted a claim to Evergreen
under the performance bond for $1.64 million. (ECF No. 1, ¶ 58 & 59, PageID #10.)
BE&K and Evergreen initially disputed whether BE&K was entitled to recover $1.64
million under the performance bond, and in March 2020 BE&K sued Evergreen. (Id.)
Evergreen counterclaimed against BE&K and sued Mr. and Mrs. Green and the
Third-Party Entities. (ECF No. 8.) BE&K and Evergreen eventually settled and
dismissed their respective claims and counterclaims, effectively terminating BE&K
from the lawsuit and leaving only the third-party claims. (ECF No. 54.)
Notably, for present purposes, after Evergreen filed its third-party complaint,
it timely served each Third-Party Defendant. (ECF No. 53.) But only Mr. and Mrs.
Green timely answered. The Court struck the Third-Party Entities’ pleadings for
failure to plead through counsel (ECF No. 45), and on November 16, 2020, the clerk
entered default against Cocoa Beach Plumbing, Advanced Beach Holding Company,
Leaning Pines Campground, and OFC Services. (ECF No. 47.) On Evergreen’s
motion, the Court ordered default judgment against the Third-Party Entities, finding
them liable to indemnify Evergreen. (ECF No. 53.) The Court did not enter a default
judgment regarding damages.
Evergreen now moves for summary judgement against Mr. and Mrs. Green
arguing that they are liable as indemnitors under the general indemnity agreement
for $1,701,168.52—$401,168.52 for the amount it paid to Cocoa Beach Plumbing’s
vendors and suppliers under the payment bond; and the $1,300,000 it paid to BE&K
pursuant to the performance bond. (ECF No. 56, PageID #624–25.) Evergreen also
seeks an award of damages against the Third-Party Entities for the same amount
given that they are owned by the Greens. (ECF No. 56.) The motion is unopposed.
ANALYSIS
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is
appropriate “if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
On a motion for summary judgment, the Court must view evidence in the light most
favorable to the non-moving party. Kirilenko-Ison v. Board of Educ. of Danville
Indep. Schs., 974 F.3d 652, 660 (6th Cir. 2020) (citing Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986)). To determine whether a genuine
dispute exists, it is not the Court’s duty to search the record; instead, the parties must
bring those facts to the Court’s attention. See Betkerur v. Aultman Hosp. Ass’n, 78
F.3d 1079, 1087 (6th Cir. 1996).
The moving party has the initial burden of establishing that there are no
genuine issues of material fact as to an essential element of the claim or defense at
issue. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479–80 & n.12 (6th Cir. 1989);
Chappell v. City of Cleveland, 584 F. Supp. 2d 974, 988 (N.D. Ohio 2008). To defeat
summary judgment, the nonmoving party must “set forth specific facts showing there
is a genuine issue for trial.” Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
250 (1986)). The nonmovant “must do more than simply show there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., 475 U.S.
at 586.
If a genuine dispute exists, meaning “the evidence is such that a reasonable
jury could return a verdict for the nonmoving party,” summary judgment is not
appropriate. Tokmenko, 488 F. Supp. 3d at 576 (citing Anderson, 477 U.S. at 250).
If, however, “the evidence is merely colorable or is not significantly probative,”
summary judgment for the movant is proper. Id. The “mere existence of some factual
dispute between the parties will not defeat an otherwise properly supported motion
for summary judgment.” Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Anderson,
477 U.S. at 247–48).
I. Summary Judgment Against Mr. and Mrs. Green.
Evergreen has shown that there are no genuine issues of fact as to any of the
essential elements of its indemnity claim against Mr. and Mrs. Green. Mr. and Mrs.
Green each signed the general indemnity agreement as individual indemnitors. And
under that agreement, Mr. and Mrs. Green agreed to:
[E]xonerate, save harmless, indemnify, and keep indemnified the Surety
from and against ANY AND ALL LOSS WHATSOEVER, including but
not limited to all demands, claims, liabilities, costs, charges, fees,
expenses, suits, orders, judgments, adjudications, and any other Losses
of whatever nature or kind, which the Surety pays or incurs or for which
the Surety becomes liable . . . for any reason whatsoever, including but
not limited to . . . 1) The completion or fulfillment by the Surety of any
obligations imposed on the Principal by any Bond or bonded contract;
. . . [or] 3) The procurement of or attempt to procure a discharge or
release from any Bond.
(ECF No. 56-1 PageID #672 (emphasis in original).) Further, the general indemnity
agreement provides that—in any lawsuit or accounting between Evergreen and the
indemnitors—“an itemized statement of Losses sworn to by an officer of the Surety
shall be prima facie evidence of the fact and extent of the liability hereunder of the
Indemnitors to the Surety.” (Id.)
Here, Evergreen’s Chief Underwriting Officer, Aaron Ort, attests in his
affidavit to each of the losses that Evergreen incurred under the payment and
performance bonds, totaling $1,701,168.52. Evergreen has met its burden, and the
Greens have foregone their opportunity to show that a genuine issue of material fact
exists. The Court sees nothing in the record that would otherwise defeat Evergreen’s
motion. Therefore, the Court GRANTS Evergreen’s motion for summary judgment
and finds that Mr. and Mrs. are liable to Evergreen for $1,701,168.52.
II. Default Judgment for Damages Against the Third-Party Entities
Rule 55 of the Federal Rules of Civil Procedure governs the entry of default
judgments. “When a party against whom a judgment for affirmative relief is sought
has faulted to plead or otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a).
After default has been entered, the party seeking relief may apply for a default
judgment under Rule 55(b). “An allegation—other than one relating to the amount
of damages—is admitted if a responsive pleading is required and the allegation is not
denied.” Fed. R. Civ. P. 8(b)(6). In other words, a default upon well-pleaded
allegations establishes defendant’s liability, but plaintiff bears the burden of
establishing damages. Flynn v. People’s Choice Home Loan, Inc., 440 F. App’x 452,
457 (6th Cir. 2011) (citing Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir.
1995)). “Where damages are unliquidated a default admits only the defendant’s
liability and the amount of damages must be proved.” Antione, 66 F.3d at 110.
Because the Court already entered default judgment against the Third-Party
Entities as to their liability, it deals only with the issue of damages. Where a plaintiff
alleges damages, the Court must discern whether the alleged damages are
reasonable. Rule 55(b)(2) “allows but does not require the district court to conduct an
evidentiary hearing” regarding damages. Vesligaj v. Peterson, 331 F. App’x 351, 354–
55 (6th Cir. 2009). An evidentiary hearing is not required if the Court can determine
the amount of damages by computation from the record before it. HICA Educ. Loan
Corp. v. Jones, No. 4:12 CV 962, 2012 WL 3579690, at *1 (N.D. Ohio Aug. 16, 2012).
In either instance, the moving party must present some evidence to support of his
claim, whether an affidavit or other documentary evidence. Id.
The Court determines that an evidentiary hearing is unnecessary. The record
contains an affidavit from Aaron Ort, attesting to Evergreen’s losses under the
payment and performance bonds and due under the general indemnity agreement.
(ECF No. 56-1.)
The record reflects that Evergreen is entitled to $401,168.52 for payments it
made under the payment bond to four of Cocoa Beach Plumbing’s suppliers or vendors
(id., ¶ 11, PageID #636–37) and $1,300,000 paid to BE&K in a settlement agreement
negotiated pursuant to the performance bond (id., ¶ 14, PageID #637). These figures
also track those that BE&K listed in the supplement of incomplete work that it issued
to Cocoa Beach Plumbing in 2018. (Id., PageID #690.)
The Court also finds that these damages are reasonable. The amount is less
than the subcontract’s original $2,168,197.00 value, and Ort’s affidavit attests that
each claim was duly investigated and/or mediated before Evergreen made any
payment. (Id., ¶¶ 11 & 14, PageID #636–37.) Accordingly, the Court determines that
Evergreen is entitled to $1,701,168.52 in damages from the Third-Party Entities.
CONCLUSION
For the foregoing reasons, the Court GRANTS Evergreen’ motion for
(1) summary judgment against Mr. and Mrs. Green, and (2) default judgment against
the Third-Party Entities. The Court AWARDS Evergreen $1,701.168.52 for which
the Third-Party Entities and Douglas and Sheryl Green are jointly and severally
liable.
SO ORDERED.
Dated: April 5, 2022
J. Philip Calabrese
United States District Judge
Northern District of Ohio