United States District Court, District of Columbia
P. Mehta United States District Judge
Argonaut Insurance Company filed this action against
Lynchburg Steel & Specialty Company, Anderson
Enterprises, LLC, Douglas B. Anderson, and Geraldine K.
Anderson (collectively, “Defendants”), seeking
recovery of losses and attorneys' fees and costs incurred
as a result of Defendants' alleged breach of an indemnity
properly served, Defendants failed to respond to the
Complaint, and the Clerk of the Court entered default on
December 1, 2017. Plaintiff then moved for default judgment,
seeking the relief requested in the Complaint. For the
reasons discussed below, the court grants Plaintiff's
Motion for Default Judgment.
action arises from a General Indemnity Agreement that
Defendants Douglas Anderson and Geraldine Anderson executed
on November 15, 2010, for the benefit of Argonaut, in their
individual capacities and official capacities as President
and CEO of Lynchburg Steel & Specialty Company and as
members of Anderson Enterprises, LLC. Compl., ECF No. 1
¶¶ 9-19; Compl., Ex. A, ECF No. 1-6 [hereinafter
Indemnity Agreement]. Under the terms of the Indemnity
Agreement, Defendants are jointly and severally obligated to
indemnify Argonaut “from and against any and all
Losses, as well as any other reasonable expense that
[Argonaut] may incur or sustain as a result of or in
connection with the furnishing, execution, renewal,
continuation, or substitution of any Bond(s).”
Indemnity Agreement ¶ 2. “Losses” are
defined in the Indemnity Agreement to mean:
any and all (a.) sums paid by Surety to claimants under the
Bonds, (b.) sums required to be paid to claimants by Surety
but not yet, in fact, paid by Surety, by reason of execution
of such Bonds, (c.) all costs and expenses incurred in
connection with investigating, paying or litigating any claim
under the Bonds, including but not limited to legal fees and
expenses, technical and expert witness fees and expenses,
(d.) all costs and expenses incurred in connection with
enforcing the obligations of the Indemnitors under this
[Indemnity] Agreement, including, but not limited to
interest, legal fees and expenses . . . .
Agreement at 1. “Expenses” are defined to
“include, but are not limited to”:
(a) the cost incurred by reason of making an independent
investigation in connection with any Bond(s) or this
[Indemnity] Agreement; (b) the cost of procuring or
attempting to procure the Surety's release from liability
or settlement under any Bond(s) upon or in anticipation of
Losses, including the defense of any action brought in
connection therewith; and (c) the cost incurred in bringing
suit to enforce this [Indemnity] Agreement against any of the
Id.. The Indemnity Agreement further provides that
the contract “shall be interpreted under the
substantive law of the State of Texas.” Id.
reliance on the Indemnity Agreement, Argonaut-as
surety-issued a Performance Bond and Payment Bond on July 9,
2015, naming Lynchburg Steel & Specialty Company as
principal in connection with a construction project known as
“MCN Job No. 01-014012-00; Rocketship DC Washington
DC.” Compl. ¶¶ 20-21; Compl., Ex. B, ECF No.
1-7 [hereinafter Bonds]. By letter dated June 6, 2017,
Williams Steel Erection Co., Inc., a subcontractor to
Lynchburg Steel in connection with the construction project,
asserted a claim against the Payment Bond, demanding payment
from Argonaut in the amount of $82, 248.00 for labor and
materials that Williams Steel had supplied but were not paid
by Lynchburg Steel. Compl. ¶ 22. When Argonaut notified
Defendants of the claim and inquired about the propriety of
the claim, Lynchburg Steel and Mr. Anderson advised Argonaut
that they were unable to pay Williams Steel the amount
demanded due to cash flow problems. Id. ¶¶
23-24. Argonaut thereafter paid Williams Steel $82, 248.00 on
June 8, 2017. Id. ¶ 25. On that same date,
Argonaut wrote to Lynchburg Steel memorializing its full
payment of the bond claim to Williams Steel and proposing a
six-month payment plan for reimbursement. Id. ¶
26. Lynchburg Steel and Mr. Anderson informed Argonaut that
the proposed payment plan was acceptable via letter dated
June 12, 2017, but failed to execute the proposed promissory
note. Id. ¶¶ 27-28.
filed this action on September 6, 2017. See Compl.
Defendants were each timely served with a summons and
complaint on October 6, 2017. See Affs. of Service,
ECF Nos. 5-8. Plaintiff filed the executed Summonses with
this court on November 28, 2017. Id. Defendants'
responses to the Complaint were due on October 27, 2017, but
Defendants failed to respond. See Fed. R. Civ. P.
12(a)(1)(A)(i). Upon Argonaut's filing of an Affidavit
for Default, the Clerk of the Court entered default against
Defendants on December 1, 2017. Entry of Default, ECF No. 11.
Plaintiff thereafter filed the instant motion. Mot. for
Default J., ECF No. 12. Defendants have yet to answer or
respond to the Complaint or respond to the Motion.
seeks a total of $92, 694.50, which includes $82, 248.00 in
damages, $8, 714.50 in attorneys' fees and costs incurred
and paid by Argonaut as of November 2017, and $1, 732.00 in
attorneys' fees and costs incurred by Argonaut and due
and owing as of November 2017.