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RLI Insurance Co. v. Roberts

United States District Court, S.D. Texas, Houston Division

May 3, 2019

RLI INSURANCE COMPANY, Plaintiff,
v.
STEPHEN GLYNN ROBERTS, Defendant.

          MEMORANDUM OPINION AND ORDER

          Kenneth M. Hoyt United States District Judge.

         I. INTRODUCTION

         Before the Court is the plaintiff's, RLI Insurance Company (the “plaintiff”) motion for summary judgment (Dkt. No. 36), the defendant's, Stephen Glynn Roberts (the “defendant”) response to the plaintiff's motion (Dkt. No. 41), and the plaintiff's reply in support of its motion (Dkt. No. 44), the defendant's motion for summary judgment (Dkt. No. 38), the plaintiff's memorandum opposing the defendant's motion for summary judgment (Dkt. No. 43), the defendant's motion to dismiss (Dkt. No. 37) and the plaintiff's memorandum opposing the defendant's motion to dismiss (Dkt. No. 42). The plaintiff's motion for summary judgment is GRANTED. The defendant's motion for summary judgment is DENIED and his motion to dismiss is deemed moot.

         II. FACTUAL BACKGROUND

         The plaintiff is a corporation that provides surety bonds. Its principal place of business is Peoria, Illinois. Around January 12, 2012, the defendant a citizen of Texas along with the Northstar Offshore Group, LLC (Northstar) entered into an indemnity agreement with the plaintiff in exchange for the issuance of bonds. Pursuant to the terms of the indemnity agreement, the plaintiff is entitled to receive premium payments, demand collateral security, and obtain indemnity against losses and expenses related to any bonds that it issues. In reliance upon its rights under the indemnity agreement, the plaintiff issued nine bonds on behalf Northstar.

         On August 12, 2016, a petition for involuntary bankruptcy was filed against Northstar. The bankruptcy case remains pending and Northstar remains subject to the automatic stay. By letters dated February 14, February 20 and March 7, 2017, the plaintiff made demands on the defendant for the unpaid premiums. In the indemnity agreement, the defendant, president of Northstar, is identified as personal indemnitor. After not receiving payment, by letter dated April 3, 2017, the plaintiff demanded that the defendant deliver evidence of the complete discharge of all nine bonds and pay the plaintiff $169, 433, for the defendant's outstanding premiums. The defendant failed to pay.

         Subsequently, on April 20, 2017, the plaintiff filed suit against the defendant for damages, specific performance, equitable, and other relief. On November 16, 2017, the Louisiana Department of Natural Resources, Office of Conservation made a claim on the Creole Bond (one of the nine bonds) and demanded the plaintiff remit full penal sum in the amount of $1, 250, 000. On February 27, 2019, the plaintiff filed a motion for summary judgement. On March 19, 2019, the defendant filed a response to the plaintiff's motion. On March 26, 2019, the plaintiff filed a reply in support of its motion.

         III.LAW APPLICABLE TO CASE

         Summary Judgment Standard

         Rule 56 of the Federal Rules of Civil Procedure authorizes summary judgment against a party who fails to make a sufficient showing of the existence of an element essential to the party's case and on which that party bears the burden at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). The movant bears the initial burden of “informing the district court of the basis for its motion” and identifying those portions of the record “which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323; see also Martinez v. Schlumber, Ltd., 338 F.3d 407, 411 (5th Cir. 2003). Summary judgment is appropriate where “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c).

         If the movant meets its burden, the burden then shifts to the nonmovant to “go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial.” Stults v. Conoco, Inc., 76 F.3d 651, 656 (5th Cir. 1996) (citing Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995); Little, 37 F.3d at 1075). “To meet this burden, the nonmovant must ‘identify specific evidence in the record and articulate the ‘precise manner' in which that evidence support[s] [its] claim[s].'” Stults, 76 F.3d at 656 (citing Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994)). It may not satisfy its burden “with some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.” Little, 37 F.3d at 1075 (internal quotation marks and citations omitted). Instead, it “must set forth specific facts showing the existence of a ‘genuine' issue concerning every essential component of its case.” Am. Eagle Airlines, Inc. v. Air Line Pilots Ass'n, Intern., 343 F.3d 401, 405 (5th Cir. 2003) (citing Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998)).

         “A fact is material only if its resolution would affect the outcome of the action, . . . and an issue is genuine only ‘if the evidence is sufficient for a reasonable jury to return a verdict for the [nonmovant].'” Wiley v. State Farm Fire and Cas. Co., 585 F.3d 206, 210 (5th Cir. 2009) (internal citations omitted). When determining whether a genuine issue of material fact has been established, a reviewing court is required to construe “all facts and inferences . . . in the light most favorable to the [nonmovant].” Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005) (citing Armstrong v. Am. Home Shield Corp., 333 F.3d 566, 568 (5th Cir. 2003)). Likewise, all “factual controversies [are to be resolved] in favor of the [nonmovant], but only where there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.” Boudreaux, 402 F.3d at 540 (citing Little, 37 F.3d at 1075 (emphasis omitted)). Nonetheless, a reviewing court is not permitted to “weigh the evidence or evaluate the credibility of witnesses.” Boudreaux, 402 F.3d at 540 (quoting Morris, 144 F.3d at 380). Thus, “[t]he appropriate inquiry [on summary judgment] is ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'” Septimus v. Univ. of Hous., 399 F.3d 601, 609 (5th Cir. 2005) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 - 52 (1986)).

         IV. PARTIES CONTENTIONS

         A. ...


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