CONTINENTAL CASUALTY COMPANY v. CONSTRUCT SOLUTIONS, INC.
1:15-cv-01848
S.D. Ind.May 19, 2017Background
- CSI (Construct Solutions, Inc.) obtained surety bonds from Plaintiffs (Continental Casualty Co. and Western Surety Co.) and CSI and its principal, Joshua D.M. Glassburn, executed a General Agreement of Indemnity requiring indemnification, posting collateral on demand, and access to books and records.
- Plaintiffs paid $1,738,275.09 on bonded claims, recovered $247,422.73, and thus claim a net loss of $1,490,852.36 plus $132,058 in attorney/consultant fees; they estimate contingent future liability of $724,398.
- Plaintiffs demanded indemnification and collateral; Defendants did not comply. Plaintiffs sued for breach of contract, specific performance (collateral and records access), indemnity, exoneration, and successor liability; Defendants did not respond to the summary judgment motion.
- Glassburn formed CS Roofs, Inc., a separate entity he solely owned; CS Roofs operated at the same location, used overlapping management/trade names, and assumed CSI’s trade name after CSI ceased operations.
- Glassburn’s personal bankruptcy stay applies to him individually; summary judgment proceeded against CSI and CS Roofs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of Indemnity Agreement | Plaintiffs argue they paid bond claims and performed conditions; indemnitors breached by not indemnifying. | Defendants did not respond. | Court: Summary judgment for Plaintiffs; breach established. |
| Damages amount | Plaintiffs seek net losses ($1,490,852.36) plus fees ($132,058) = $1,622,910.36. | No dispute. | Court: Awards $1,622,910.36 in damages. |
| Specific performance — post collateral | Plaintiffs seek order to post collateral for estimated future liability ($724,398). | No disputed response. | Court: Orders Defendants to post $724,398 collateral. |
| Specific performance — access to books/records | Plaintiffs seek court order enforcing contractual access to records. | Defendants refused access; no defense offered. | Court: Orders Defendants to provide access per the Indemnity Agreement. |
| Successor liability (CS Roofs liable for CSI’s obligations) | Plaintiffs argue CS Roofs is a de facto merger/continuation of CSI and thus successor liable. | No response contesting factual assertions. | Court: Finds factors satisfied (ownership, management, location, continuity) and holds CS Roofs successor liable. |
Key Cases Cited
- Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487 (7th Cir. 2007) (summary-judgment standard and burden on nonmoving party)
- Zerante v. DeLuca, 555 F.3d 582 (7th Cir. 2009) (inferences drawn for nonmoving party at summary judgment)
- Dorsey v. Morgan Stanley, 507 F.3d 624 (7th Cir. 2007) (speculation/conjecture insufficient to defeat summary judgment)
- Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391 (7th Cir. 1997) (metaphysical doubt insufficient to avoid summary judgment)
- Ritchie v. Glidden Co., 242 F.3d 713 (7th Cir. 2001) (court not required to scour record or conduct a paper trial)
- Laborers’ Int’l Union v. Caruso, 197 F.3d 1195 (7th Cir. 1999) (issues not raised in response to summary judgment are waived)
- Allstate Ins. Co. v. Menards, Inc., 285 F.2d 630 (7th Cir. 2001) (apply forum state substantive law in diversity cases)
- Sorenson v. Allied Prod. Corp., 706 N.E.2d 1097 (Ind. Ct. App. 1999) (factors sustaining successor liability by de facto merger or mere continuation)