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Ohio Farmers Insurance Co. v. Charlie's Electric Service, Inc.

United States District Court, W.D. Kentucky, Bowling Green Division

April 14, 2017




         This matter is before the Court on Plaintiff's Motion for Summary Judgment (DN 9). The Court previously directed Defendants to the respond to the motion by April 3, 2017, but Defendants failed to do so. (Order, DN 13). For the reasons outlined below, the motion is GRANTED.


         Plaintiff Ohio Farmers Insurance Company (“OFIC”) is an Ohio corporation authorized to do business in the Commonwealth of Kentucky. (Compl. ¶ 1, DN 1). On April 3, 2013, Defendants Charlie's Electric Service, Inc. (“Charlie's Electric”), Charles McCutchen, and Katherine McCutchen entered into an indemnity agreement (“Agreement”) with OFIC. (Compl. ¶ 9; Agreement of Indemnity 8-9, DN 1-2). Based on Defendants' execution of the Agreement, OFIC issued a Subcontractor Performance Bond No. 6087987 (“Performance Bond”) and a Subcontractor Labor and Material Payment Bond No. 6087987 (“Payment “Bond”) for electrical work that Charlie's Electric had contracted to perform for Yager Materials, LLC (“Yager Materials”) in the Commonwealth of Kentucky (“Bonded Subcontract”). (Compl. Ex. 2, DN 1-3; Smith Aff. ¶ 3, DN 10; Smith Aff. Ex. 2, DN 10-2).

         In a letter dated May 22, 2015, Yager Materials notified OFIC and Charlie's Electric that Yager Materials was contemplating declaring Charlie's Electric in default of the Bonded Subcontract due to its failure to timely complete the work on the project. (Smith Aff. ¶ 4; Smith Aff. Ex. 3, DN 10-3). Yager Materials requested a meeting with OFIC and Charlie's Electric to discuss the status of the project, which was held on May 28, 2015. (Smith Aff. ¶ 4; Smith Aff. Ex. 3). On or about June 15, 2015, Charlie's Electric notified OFIC that it could no longer perform the work under the Bonded Subcontract and had abandoned the project. (Smith Aff. ¶ 4). By letter dated June 15, 2015, Yager Materials declared Charlie's Electric in default and demanded that OFIC assume responsibility for performance and completion of work under the Bonded Subcontract, including assuming responsibility for payment of the work. (Smith Aff. ¶ 4; Smith Aff. Ex. 4, DN 10-4).

         On June 16, 2015, OFIC sent a letter to Defendants notifying them that they had breached the Agreement, demanding indemnification, and requesting that they deposit the sum of $150, 000 as collateral security. (Compl. ¶ 20; Compl. Ex. 5, DN 1-6). Defendants did not respond to the letter, and they did not deposit any collateral. (Compl. ¶ 21; Smith Aff. ¶ 4).

         As part of its investigation, OFIC received a bid in the amount of $397, 204.25 to remediate and complete the work under the Bonded Subcontract. (Smith Aff. ¶ 4). OFIC then proceeded to reach an agreement with Yager Materials under which OFIC would pay Yager Materials the sum of $397, 000 to be held in trust to apply to the completion of the work required by the Bonded Subcontract. (Smith Aff. ¶ 4; Smith Aff. Ex. 5, DN 10-5). After the work was completed and Yager Material paid the replacement subcontractor the sum of $201, 650.19 for the work, OFIC was able to recoup $195, 349.81 of the original $397, 000 it paid under the Performance Bond. (Smith Aff. ¶ 4). After Rexel, Inc., a supplier of Charlie's Electric, made a claim on the Payment Bond, OFIC settled the claim by paying the sum of $22, 000 from the Payment Bond. (Smith Aff. ¶ 5; Smith Aff. Ex. 6, DN 10-6). OFIC also maintains that it has additional losses or expenses totaling $9, 363. (Smith Aff. ¶ 6).

         OFIC filed this action against Defendants seeking specific performance of the Agreement and breach of contract. (Compl. ¶¶ 29-43). In addition, OFIC alleged that it is entitled to equitable indemnity, reimbursement, and exoneration against Charlie's Electric, and that it is entitled to relief under the equitable remedy of quia timet. (Compl. ¶¶ 44-48). As noted above, Defendants have not responded to OFIC's motion.


         This Court has subject-matter jurisdiction of this matter based upon diversity of citizenship. See 28 U.S.C. § 1332(a)(1).


         In ruling on a motion for summary judgment, the Court must determine whether there is any genuine issue of material fact that would preclude entry of judgment for the moving party as a matter of law. See Fed. R. Civ. P. 56(a). The moving party bears the initial burden of stating the basis for the motion and identifying evidence in the record that demonstrates an absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the moving party satisfies its burden, the non-moving party must then produce specific evidence proving the existence of a genuine issue of fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         While the Court must view the evidence in the light most favorable to the non-moving party, the non-moving party must do more than merely show the existence of some “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citation omitted). Rather, the non-moving party must present specific facts proving that a genuine factual issue exists by “citing to particular parts of the materials in the record” or by “showing that the materials cited do not establish the absence . . . of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). “The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson, 477 U.S. at 252.

         IV. ...

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