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Hartford Fire Insurance Co. v. CMC Construction Co.

July 23, 2007

HARTFORD FIRE INSURANCE COMPANY, PLAINTIFF,
v.
CMC CONSTRUCTION COMPANY, INC., JERRY G. CROWE, AND TARA ASHER, DEFENDANTS.



The opinion of the court was delivered by: Thomas W. Phillips United States District Judge

PHILLIPS

MEMORANDUM AND ORDER

The action before the Court involves a claim for recovery under various indemnity agreements executed by defendants. A defendant shareholder has counter-claimed alleging breach of fiduciary duty and breach of duty of good faith and fair dealing under the indemnity agreements. In response, the plaintiff has filed a motion for summary judgment [Doc. 14] pursuant to Rule 56 of the Federal Rules of Civil Procedure. The defendant has filed her answer in opposition, and the plaintiff has replied. For the reasons stated below, plaintiff's dispositive motion [Docs. 14] is GRANTED, with exception of plaintiff's motion to deny attorneys' fees.*fn1

I. Summary of the Facts

As the law requires, all disputed facts and inferences are resolved most favorably for the non-movant. The Court merely provides an abridged summary of facts for the purposes of this opinion.

Defendant Tara Asher ("Asher") and her ex-husband defendant Jerry Crowe ("Crowe") each owned one-half (1/2 ) of the stock in CMC Construction Company, Inc. ("CMC"). In 2001, CMC bid on new projects, which required the successful bidder to obtain performance bonds. Since CMC already had a relationship with plaintiff Hartford Fire Insurance Company ("Hartford"), CMC approached Hartford regarding performance bonds for 2001 projects. After CMC was awarded the Target project, Hartford issued a bond pursuant to the bid contract, and CMC paid Hartford the applicable fee. CMC then commenced work on the Target project.

Thereafter, in April of 2002, Asher, along with Crowe and CMC, signed an indemnity agreement, which was in addition to previously executed indemnity agreements (collectively referred to as "Indemnity Agreements").*fn2 Pursuant to the Indemnity Agreements, Asher agreed to indemnify Hartford and to hold Hartford harmless for any loss it may sustain or incur by reason of having executed surety bonds on CMC's behalf. More specifically, Article III of the Indemnity Agreements provides:

[Asher] will indemnify and hold [Hartford] harmless from all loss, liability, damages and expenses including, but not limited to, court costs, interests and attorney's fees, which [Hartford] incurs or sustains (1) because of having furnished any Bond or (2) because of the failure of [Asher] to discharge any obligations under this Agreement, or (3) in enforcing any of the provisions of this agreement.

Under the Indemnity Agreements, Asher and the other indemnitors conditionally assigned certain rights relating to CMC. Article VII of the Indemnity Agreements provides, in pertinent part, as follows:

With respect to any Bond issued on behalf of an Indemnitor, all Indemnitors assign, transfer and convey to [Hartford];

A. All rights of the Indemnitors in, arising from, or related to such Bonds or any bonded or unbonded contracts or any extensions, modifications, alterations or additions thereto;

B. All right, title and interest of the Indemnitors in and to (1) the work performed, (2) all supplies, tools, plant, machinery, equipment and materials on or near work sites or elsewhere, and (3) all materials purchased for or chargeable to the contract which may be in the process of manufacture, construction or transportation, or any storage anywhere.

In the event these assignments become operative, [Asher] authorize[s] [Hartford], at its sole discretion and to the extent it deems appropriate, but without any obligation on its part:

(i) To assert and pursue all of the assigned, transferred or conveyed rights, actions, causes of ...


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