Hudson Insurance Company v. Stice Family Logistics, LLC
1:18-cv-00192
| S.D. Ohio | May 6, 2019Background
- Hudson issued a Broker's Surety Bond (Form BMC-84) in the penal sum of $75,000 for Stice Family Logistics, LLC and its principals on January 27, 2017.
- Nathan and Kendra Stice each executed a written general indemnity agreement in favor of Hudson before the bond was issued, agreeing to indemnify Hudson for losses, costs, and attorneys' fees arising from the bond.
- Multiple motor carriers submitted 53 claims against Hudson under the bond totaling $189,126.75; Hudson paid pro rata until the bond’s $75,000 penal sum was exhausted.
- Hudson demanded collateral and indemnity performance from defendants; defendants refused to pay the requested collateral and did not respond to discovery or Hudson’s summary judgment motion.
- Hudson incurred additional attorneys’ fees and costs related to the claims and this subrogation action, and seeks a total of $87,188.51 (the $75,000 bond payments plus $12,188.51 in fees/expenses).
- The court treats defendants’ admissions (failure to respond to requests for admission) as admitted and applies Ohio contract law to interpret the indemnity agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants must indemnify Hudson for amounts Hudson paid under the bond | The indemnity agreement unambiguously requires defendants to exonerate, hold harmless and indemnify Hudson for all losses, including attorneys’ fees, arising from the bond | No response filed; no contest to contract terms or payments | Court granted summary judgment for Hudson: indemnity agreement requires defendants to reimburse Hudson; breach established |
| Whether Hudson has proven damages and amount owed | Hudson provided affidavit and evidence showing $75,000 paid on bond plus $12,188.51 in fees; indemnity agreement deems Hudson’s payment vouchers prima facie evidence of liability | Defendants did not contest the good faith of bond payments or amount | Court accepted Hudson’s damage calculation and entered judgment for $87,188.51 |
| Whether Hudson performed its obligations and is entitled to relief as a matter of law | Hudson executed the bond and paid claimants; demanded collateral and indemnity per agreement | Defendants failed to perform and did not oppose summary judgment | Court found Hudson performed and defendants breached; summary judgment appropriate |
| Effect of defendants’ failure to respond to discovery and motion | Hudson contends unanswered requests for admission are deemed admitted under Rule 36 and supports summary judgment | Defendants offered no opposition or evidence | Court deemed requests admitted and relied on them in granting summary judgment |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burdens)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (genuine issue for trial standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574 (summary judgment and inferences)
- Savedoff v. Access Group, Inc., 524 F.3d 754 (contract interpretation and plain meaning rule)
- Sunoco, Inc. (R & M) v. Toledo Edison Co., 953 N.E.2d 285 (Ohio rule: contract construed as a matter of law; parties’ intent from contract language)
- Doner v. Snapp, 649 N.E.2d 42 (elements of breach of contract under Ohio law)