United States District Court, E.D. Tennessee, Greeneville
MEMORANDUM OPINION AND ORDER
RONNIE GREER UNITED STATES DISTRICT JUDGE
matter is before the Court to address plaintiff Westfield
Insurance Company's (“Westfield”) motion for
summary judgment, [Doc. 110]. Defendants Seth Kincaid and
Skin, LLC (“Kincaid defendants”) responded, [Doc.
121], to which Westfield replied, [Doc. 127]. Pro se
defendants Rainey Contracting, LLC and Rainey, LLC failed to
respond to the plaintiff's motion. According to the Local
Rules, “failure to respond to a motion may be deemed a
waiver of any opposition to the relief sought.” E.D.
Tenn. L.R. 7.2. The matter is ripe for review.
is a surety bond company that issued two performance and
payment bonds on behalf of Rainey Contracting, LLC for the
construction of two projects in eastern Tennessee, the Senior
Center and Northeast State Community College
(“NSCC”). In connection to the issuance of the
bonds, the interested parties signed an indemnity agreement
agreeing to indemnify Westfield for losses related to a
breach of the bonds by Rainey Contracting, LLC. On July 24,
2013, defendants Skin, LLC, Rainey Contracting, LLC, and
Rainey, LLC signed the indemnity agreement. Seth Kincaid
signed as managing member of Skin, LLC and on behalf of
Rainey Contracting, LLC. Skin, LLC is a member of Rainey
Contracting, LLC. Defendant Scott Rainey signed as managing
member of Rainey, LLC and on behalf of Rainey Contracting,
LLC. Rainey, LLC is a member of Rainey Contracting, LLC.
indemnity agreement required the defendants to exonerate and
indemnify Westfield against liability and any losses actually
incurred by Westfield because of a breach by Rainey
Contracting, LLC in performance of the construction projects.
The agreement requires the defendants to prevent Westfield
from sustaining any liability from losses in the first place
and to reimburse Westfield for any losses it actually
The Indemnitors shall exonerate and indemnify the Surety from
and against any and all liability for losses and/or expenses
of whatever kind (including, but not limited to, interest,
court costs, and counsel fees) and from and against any and
all such losses and/or expenses which the surety may sustain;
(1) by reason of having executed or procured the execution of
the Bonds; (2) by reason of the failure of the indemnitors to
perform or comply with the covenants and conditions of this
Agreement; or (3) in enforcing any of the covenants and
conditions of this agreement. . . . In the event of any
payment by the Surety, . . . the Surety shall be entitled to
charge for any disbursement made by it regarding the matters
herein contemplated under the belief that it is or was liable
for the sums and amounts so disbursed, or that it was
necessary or expedient to make such disbursements, whether or
not such liability, necessity or expediency existed; and that
the vouchers or other evidence of any such payments made by
the Surety shall be prima facie evidence of the fact and
amount of the liability to the Surety.
Agreement, Doc. 112-1 at 1].
Kincaid defendants do not dispute that they executed the
indemnity agreement or that Westfield made payments to
subcontractors pursuant to the bonds. According to Westfield,
following Rainey Contracting, LLC's failure to perform on
both projects, Westfield retained Landmark Corporation
(“Landmark”) to provide construction-consulting
services and Landmard eventually took possession of and
completed the two projects. [Truman Affidavit, Doc. 113
¶¶ 5-6]. On the two projects that Westfield issued
surety bonds for Rainey Contracting, LLC, Westfield has
sustained actual losses of $1, 539, 201.51 in payments to
subcontractors and vendors in order to complete the two
construction projects on Rainey Contracting, LLC's
behalf. [Id. at ¶ 7]. Westfield further avers
that it sustained additional losses in the amount of $96,
873.67 by reason of having to execute the bonds and enforcing
the bonds. [Id. at ¶ 8]. Westfield submits,
through the affidavit of Kathryn Truman, a total loss of $2,
543, 977.10. [Id. at 9]. An amount of $876, 190.76
was recouped under the two bonds. [Id. at 11].
Westfield expects an additional $100, 244.13 will be recouped
as well. [Id.]. Westfield submits evidence that its
net loss totals $1, 567, 542.21 by reason of having executed
the bonds, the defendants' failure to perform under the
contracts and indemnity agreements, and/or in enforcing the
indemnity agreements. [Id. at 12].
Standard of Review
judgment is proper where the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine issue of material fact and that the
movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). In ruling on a motion for summary
judgment, the Court must view the facts contained in the
record and all inferences that can be drawn from those facts
in the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986); Nat'l Satellite Sports,
Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th
Cir. 2001). The Court cannot weigh the evidence, judge the
credibility of witnesses, or determine the truth of any
matter in dispute. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249 (1986).
moving party bears the initial burden of demonstrating that
no genuine issue of material fact exists. Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986). To refute such a
showing, the non-moving party must present some significant,
probative evidence indicating the necessity of a trial for
resolving a material factual dispute. Id. at 322. A
mere scintilla of evidence is not enough. Anderson,
477 U.S. at 252; McClain v. Ontario, Ltd., 244 F.3d
797, 800 (6th Cir. 2000). This Court's role is
limited to determining whether the case contains sufficient
evidence from which a jury could reasonably find for the
non-moving party. Anderson, 477 U.S. at 248-49;
Nat'l Satellite Sports, 253 F.3d at 907. If the
non-moving party fails to make a sufficient showing on an
essential element of its case with respect to which it has
the burden of proof, the moving party is entitled to summary
judgment. Celotex, 477 U.S. at 323. If this Court
concludes that a fair-minded jury could not return a verdict
in favor of the non-moving party based on the evidence
presented, it may enter a summary judgment.
Anderson, 477 U.S. at 251-52; Lansing Dairy,
Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir.
party opposing a Rule 56 motion may not simply rest on the
mere allegations or denials contained in the party's
pleadings. Anderson, 477 U.S. at 256. Instead, an
opposing party must affirmatively present competent evidence
sufficient to establish a genuine issue of material fact
necessitating the trial of that issue. Id. Merely
alleging that a factual dispute exists cannot defeat a
properly supported motion for summary judgment. Id.
A genuine issue for trial is not established by evidence that
is merely colorable, or by factual disputes that are
irrelevant or unnecessary. Id. at 248-52.
moves this Court for summary judgment in its favor arguing
that there are no material issues of fact relating to the
defendants' breach of the indemnity agreement or the
amounted owed to Westfield to recover under that agreement.
The Kincaid defendants make two arguments in opposition to
summary judgment relating to the indemnity agreements and the
amount Westfield is seeking in damages. First, the Kincaid
defendants argue that a dispute of material fact exists as to
the amount of damages by arguing that one payment made to a
subcontractor was not related to work on either project and
that Westfield failed to mitigate damages. Second, the