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Merchants Bonding Co. v. Siteworx Design Build, LLC

United States District Court, E.D. Kentucky, Northern Division, Covington

November 15, 2017

MERCHANTS BONDING CO. PLAINTIFF
v.
SITEWORX DESIGN BUILD, LLC ET AL. DEFENDANTS

          ORDER

          William O. Bertelsman, United States District Judge

         This matter is before the Court on defendant's motion for summary judgment (Doc. 23). As will be discussed below, plaintiff has not filed a response to this motion.

         Factual and Procedural Background

         Plaintiff Merchants Bonding Company filed its complaint against defendants Siteworx Design Build, LLC and Kenneth M. Holland on July 7, 2016. (Doc. 1.) Plaintiff, a company that issued bonds pertaining to a construction project in Covington, Kentucky, alleges that it was forced to pay substantial sums pursuant to the bonds when defendants failed to perform their obligations under the project. Plaintiff seeks to recover the amount of the bonds, plus interest, costs, and fees.

         The parties' relationship is governed by a General Application and Agreement of Indemnity contract (the “GAI”). (Doc. 23-2.) The GAI provides in relevant part:

. [defendants] shall unconditionally indemnify and keep indemnified [plaintiff] against any and all liability, loss and expense of whatsoever kind or nature, including, but not limited to, court costs, attorneys' fees, and interest, which [plaintiff] may sustain or incur (1) by reason of having executed or produced execution of any Bond or Bonds, (2) by reason of the failure of [defendants] to perform or comply with this Agreement, or (3) to enforce any of the covenants and conditions of this Agreement.
. “[plaintiff] shall have the exclusive right for itself and for [defendants] to decide and determine whether any claim, demand, suit, or judgment shall, on the basis of liability, expediency or otherwise, be paid . . ., and [plaintiff's] determination shall be final, conclusive and binding upon [defendants].”
. “Vouchers, affidavits or other evidence of payment by [plaintiff] of any loss, cost or expense shall be prima facie evidence of their propriety and the liability of [defendants] to [plaintiff] for such loss, cost or expense.”
. “[Plaintiff] shall be entitled to charge for any and all disbursements made by it in good faith in and about the matters contemplated by this Agreement under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not such liability, necessity or expediency existed.”
. “Immediately upon demand, [defendants] will deposit with [plaintiff], as collateral security, money or other collateral satisfactory to [plaintiff], equal to (1) the liability of [plaintiff], if established; (2) the liability asserted against [plaintiff]; or (3) the reserve established by [plaintiff], or any increase thereof, to cover any liability for any loss or expense for which [defendants] may be obligated to indemnify [plaintiff] under the terms of this Agreement.”
. “[Plaintiff] shall be entitled to enforce the obligations of this Agreement directly against [Mr. Holland], or any one of them, without the necessity of first proceeding against [Siteworx].”

(Doc. 23-2, at 2, 4, 5).

         Plaintiff caused the complaint to be personally served on Mr. Holland, (Doc. 9), who then filed an answer, (Doc. 11), pro se.

         However, plaintiff did not immediately effect service on Siteworx. Accordingly, the Court sua sponte issued two show cause orders (Docs. 13, 27) requiring plaintiff to provide proof of service on Siteworx or noting that, pursuant to Federal Rule of Civil Procedure 4(m), the claims against Siteworx would be dismissed. On November 7, 2017, plaintiff filed a notice ...


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