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Continental Casualty Co. v. Texas Bridge, Inc.

United States District Court, W.D. Texas, Austin Division

May 30, 2018

CONTINENTAL CASUALTY CO.
v.
TEXAS BRIDGE, INC., et al.

          THE HONORABLE ROPERT PITMAN UNITED STATES DISTRICT JUDGE

          REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          ANDREW W. AUSTIN UNITED STATES MAGISTRATE JUDGE.

         Before the Court is Plaintiff's Motion for Summary Judgment (Dkt. No. 21). Defendants did not file a response. The District Court referred the motion to the undersigned for report and recommendation pursuant to 28 U.S.C. §636(b)(1)(B), Fed.R.Civ.P. 72, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas.

         I. GENERAL BACKGROUND

         On or about April 30, 2004, Texas Bridge, Inc., TBI Investments, LLC and Spiros Kollias (“Defendants”) executed a General Agreement of Indemnity in favor of Continental Casualty Company (“CCC”) in which CCC agreed to issue certain surety bonds on behalf of Defendants in exchange for Defendants agreeing to indemnify CCC against costs and expenses it would incur as a result of having executed the bonds. At the request of the Defendants, CCC issued a performance bond and a payment bond naming Texas Bridge Partners, LP as principal, and the State of Texas as obligee, on a construction project referred to as Loop 481 South Llano River Bridge in Junction, Kimble County, Texas (the “Project”). After a dispute arose between the State of Texas and Texas Bridge Partners in connection with the Project, the State of Texas declared Texas Bridge Partners in default and made a claim on the Performance Bond issued by CCC in connection with the Project.

         In July 2007, the State of Texas through the Texas Department of Transportation filed a lawsuit against Texas Bridge Partners and CCC seeking recovery of damages allegedly resulting from Texas Bridge Partners' breach of the construction contract for the Project. CCC subsequently settled the Performance Bond Claim made the subject of the lawsuit and paid the State of Texas $1, 525, 000.00. In addition, CCC incurred and paid $73, 654.88 in expenses, including attorneys' fees and expenses related to the investigation of the Performance Bond Claim, as a result of having executed the Performance Bond, procuring a release of liability, and in bringing suit to enforce the Defendants' obligations under the Agreement of Indemnity.

         As a result of the Performance Bond Claim, the lawsuit, and Defendants' failure to satisfy its obligations under the Indemnity Agreement, CCC contends it has suffered losses and expenses through the date of this Motion in the total amount of $1, 598, 654.88. CCC has made a demand upon Defendants to comply with their obligations under the Indemnity Agreement but Defendants have failed to pay CCC. Accordingly, on August 17, 2017, CCC filed this lawsuit to enforce Defendants' obligations under the Indemnity Agreement. CCC's Second Amended Complaint alleges breach of the Indemnity Agreement, common law indemnification and seeks attorneys fees, costs and interest.

         CCC has now filed a motion for summary judgment arguing that it has established as a matter of law that Defendants violated the Indemnity Agreement and that it is entitled to recover $1, 598, 654.88 for the full amount of its loss and expenses to date, plus interest. As noted, Defendants have failed to file a response to the motion.

         II. LEGAL STANDARD

         Summary judgment shall be rendered when the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007). A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Washburn, 504 F.3d at 508. Further, a court “may not make credibility determinations or weigh the evidence” in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.

         Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. Id. The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

         III. ANALYSIS

         CCC moves for summary judgment arguing that it has established as a matter of law that Defendants violated the Indemnity Agreement and that it is entitled to recover $1, 598, 654.88 for the full amount of its loss and expenses to date, plus interest.

         A. Defendant's ...


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