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Great American Insurance Co. v. Nelson, Inc.

United States District Court, W.D. Tennessee, Western Division

April 20, 2017

GREAT AMERICAN INSURANCE COMPANY, Plaintiff,
v.
NELSON, INC., WILLIE NELSON, SR., and HATTIE NELSON, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          JON P. McCALLA UNITED STATES DISTRICT COURT JUDGE.

         Before the Court is Plaintiff Great American Insurance Company (“GAIC”)'s Motion for Summary Judgment, filed December 23, 2016. (ECF No. 25.) Defendants Nelson, Inc., Willie Nelson, Sr., and Hattie Nelson filed a response in opposition on January 20, 2017. (ECF No. 26.) Plaintiff filed a reply on February 3, 2017 (ECF No. 30), and amended that reply with leave of Court on March 21, 2017 (ECF No. 34.) For the reasons stated below, the Court GRANTS in part and DENIES in part Plaintiff's Motion for Summary Judgment (ECF No. 25). Specifically, the Court GRANTS summary judgment in favor of Plaintiff on the issue of Defendant Nelson, Inc.'s breach of the Indemnity Agreement; DENIES summary judgment in favor of Plaintiff on the issue of Defendant Nelson, Inc.'s breach of the Settlement Agreement; GRANTS Plaintiff's request for specific performance under the Indemnity Agreement; and GRANTS Plaintiff's request for attorneys' fees and costs under the Indemnity Agreement. This Order does not address claims against Defendants Willie Nelson, Sr. and Hattie Nelson pursuant to an automatic stay under 11 U.S.C. § 362.

         I.BACKGROUND

         On November 6, 2006, Plaintiff GAIC and Defendants executed an Indemnity Agreement. (ECF No. 1-5; ECF No. 25-2 ¶ 8.) The Indemnity Agreement provided that the Defendants would indemnify GAIC in return for GAIC issuing performance and payment bonds necessary for Defendant Nelson, Inc. to secure construction contracts with various public and private clients. (ECF No. 1-5; ECF No. 25-2 ¶ 7.) The Indemnity Agreement also contained other provisions, such as a requirement that any funds associated with the secured construction contracts received by Defendants would be deposited into a separate trust account, and that GAIC would be entitled to attorneys' fees or costs for suits relating to the Indemnity Agreement. (ECF No. 1-5; ECF No. 25-2 ¶ 26.)

         In July 2009, Nelson, Inc. secured a contract with the United States Army Corps of Engineers (“USACE”) for construction of stone dikes (hereinafter the “Stone Dike Contract”). (ECF No. 25-2 ¶ 5.) GAIC then issued performance and payment bonds on behalf of Nelson, Inc. for the Stone Dike Contract. (Id. ¶ 6.)

         On February 9, 2010, the USACE terminated Nelson Inc.'s right to proceed with further work on the Stone Dike Contract. (Id. ¶ 10.) Subcontractors and suppliers of the Defendants then sought payment from GAIC. (See id. ¶ 11.) GAIC made these payments after April 27, 2010. (Id.) Defendants did not reimburse GAIC, and thus GAIC brought suit against Defendants in September 2010. (ECF No. 25-2 ¶ 12; ECF No. 26-3 ¶ 1.)

         In February 2012, GAIC and Defendants Willie Nelson, Sr. and Hattie Nelson entered into a settlement agreement (hereinafter the “Settlement Agreement”). (ECF No. 25-2 ¶ 17.) The Settlement Agreement required, among other things, that Willie Nelson, Sr. and Hattie Nelson make several payments to GAIC as well as assist GAIC in collecting remaining contract funds, such as for those fund associated with the Stone Dike Contract. (Id.) Both Willie Nelson, Sr. and Hattie Nelson failed to make full payments to GAIC as set out in the Settlement Agreement. (See id. ¶ 24; see also ECF No. 26-2 ¶¶ 24, 29.)

         On December 16, 2015, the Armed Services Board of Contract Appeals found that USACE improperly terminated Nelson, Inc.'s Stone Dike Contract, which resulted in Nelson, Inc. receiving a monetary settlement between USACE and Nelson, Inc. (ECF No. 25-2 ¶ 23.) In February 2016, Nelson, Inc. received a payment of $222, 108.00 from USACE for the Stone Dike Contract. (Id. ¶ 27.)

         On April 27, 2016, GAIC filed the instant action for breach of the Settlement and Indemnity Agreements, and seeking injunctive relief. (ECF No. 1.) Defendants filed an Answer on June 7, 2016. (ECF No. 15.)

         On December 23, 2016, GAIC filed a Motion for Summary Judgment. (ECF No. 25.) Defendants Nelson, Inc., Willie Nelson, Sr., and Hattie Nelson filed a response in opposition on January 20, 2017. (ECF No. 26.) On January 20, 2017, Defendants Willie Nelson, Sr. and Hattie Nelson filed a Notice of Bankruptcy. (ECF Nos. 27-28.) Plaintiff filed a reply to Defendant's response the Motion for Summary Judgment on February 3, 2017 (ECF No. 30), and amended that reply with leave of Court on March 21, 2017 (ECF No. 34.)

         II. LEGAL STANDARD: Summary Judgment

         A party is entitled to summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A fact is ‘material' for purposes of summary judgment if proof of that fact would establish or refute an essential element of the cause of action or defense.” Bruederle v. Louisville Metro Gov't, 687 F.3d 771, 776 (6th Cir. 2012).

         “In considering a motion for summary judgment, [the] court construes all reasonable inferences in favor of the nonmoving party.” Robertson v. Lucas, 753 F.3d 606, 614 (6th Cir. 2014) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). “The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact.” Mosholder v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2012) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

         “Once the moving party satisfies its initial burden, the burden shifts to the nonmoving party to set forth specific facts showing a triable issue of material fact.” Mosholder, 679 F.3d at 448-49; see also Fed.R.Civ.P. 56(e); Matsushita, 475 U.S. at 587. “When the non-moving party fails to make a sufficient showing of an essential element of his case on which he bears the burden of proof, the moving parties are entitled to judgment as a matter of law and summary judgment is proper.” Martinez v. Cracker Barrel Old Country Store, Inc., 703 F.3d 911, 914 (6th Cir. 2013) (quoting Chapman v. UAW Local 1005, 670 F.3d 677, 680 (6th Cir. 2012) (en banc)); see also Kalich v. AT & T Mobility, LLC, 679 F.3d 464, 469 (6th Cir. 2012).

         In order to “show that a fact is, or is not, genuinely disputed, ” both parties must do so by “citing to particular parts of materials in the record, ” “showing that the materials cited do not establish the absence or presence of a genuine dispute, ” or showing “that an adverse party cannot produce admissible evidence to support the fact.” Bruederle, 687 F.3d at 776 (alterations in original) (quoting Fed.R.Civ.P. 56(c)(1)); see also Mosholder, 679 F.3d at 448 (“To support its motion, the moving party may show ‘that there is an absence of evidence to support the nonmoving party's case'” (quoting Celotex Corp., 477 U.S. at 325)). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge[.]” Martinez, 703 F.3d at 914 (alteration in original) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

         “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3). “[T]he district court has no ‘duty to search the entire record to establish that it is bereft of a genuine issue of material fact.'” Pharos Capital Partners, L.P. v. Deloitte & Touche, 535 F.App'x 522, 523 (6th Cir. 2013) (per curiam) (quoting Tucker v. Tennessee, 539 F.3d 526, 531 (6th Cir. 2008), abrogation recognized by Anderson v. City of Blue Ash, 798 F.3d 338 (6th Cir. 2015)). “‘[J]udges are not like pigs, hunting for truffles' that might be buried in the record.” Emerson v. Novartis Pharm. Corp., 446 F.App'x 733, 736 (6th Cir. 2011) (alteration in original) (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)).

         The decisive “question 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.'” Johnson v. Memphis Light Gas & Water Div., 777 F.3d 838, 843 (6th Cir. 2015) (quoting Anderson, 477 U.S. at 251-52). Summary judgment “‘shall be entered' against the nonmoving party unless affidavits or other evidence ‘set forth specific facts showing that there is a genuine issue for trial.'” Rachells v. Cingular Wireless Employee Services, LLC, No. 1:08CV02815, 2012 WL 3648835, at *2 (N.D. Ohio Aug. 23, 2012) (quoting Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888889, 110 S.Ct. 3177, 111 L.Ed.2d 695). “[A] mere ‘scintilla' of evidence in support of the non-moving party's position is insufficient to defeat summary judgment; rather, the non-moving party must present evidence upon which a reasonable jury could find in her favor.” Tingle v. Arbors at Hilliard, 692 F.3d 523, 529 (6th Cir. 2012) (quoting Anderson, 477 U.S. at 251). “[I]n order to withstand a motion for summary judgment, the party opposing the motion must present “affirmative evidence” to support his/her position.” Mitchell v. Toledo Hosp., 964 F.2d 577, 584 (6th Cir. 1992) (citing Anderson v. Liberty Lobby, 106 S.Ct. 2505, 2510, 2514 (1986); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir. 1989)). “[C]onclusory assertions, unsupported by specific facts made in affidavits opposing a motion for summary judgment, are not sufficient to defeat a motion for summary judgment.” Rachells, 2012 WL 3648835, at *2 (quoting Thomas v. Christ Hosp. and Med. Ctr., 328 F.3d 890, 894 (7th Cir.2003)). Statements contained in an affidavit that are “nothing more than rumors, conclusory allegations and subjective beliefs” are insufficient. Mitchell, 964 F.2d at 584-85.

         III. ...


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