Fireman's Fund Ins. Co. v. Nizdil, Civil No. 88-1426-RE

• Decision Date: 30 March 1989
• Docket Number: Civil No. 88-1426-RE,88-1456-RE.
• Citation: 709 F. Supp. 975
• Parties: FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Plaintiff, v. Paul E. NIZDIL, Defendant. TRANSAMERICA INSURANCE COMPANY, a California corporation, Plaintiff, v. Paul E. NIZDIL, Defendant.
• Court: U.S. District Court — District of Oregon

709 F. Supp. 975

FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Plaintiff, v. Paul E. NIZDIL, Defendant.

TRANSAMERICA INSURANCE COMPANY, a California corporation, Plaintiff, v. Paul E. NIZDIL, Defendant.

Civil Nos. 88-1426-RE, 88-1456-RE.

United States District Court, D. Oregon.

March 30, 1989.

Joseph A. Yazbeck, Jr., Robert L. O'Halloran, Allen, Kilmer, Schrader, Yazbeck & Chenoweth, P.C., Portland, Or., for plaintiff Fireman's Fund Ins. Co.

David R. Trachtenberg, Howard W. Carsman, Stafford Frey Cooper & Stewart, Portland, Or., for plaintiff Transamerica Ins. Co.

Douglas M. Fellows, Fellows, McCarthy & Odman, Portland, Or., for defendant.

OPINION

REDDEN, District Judge:

BACKGROUND

Defendant Nizdil executed an indemnity agreement with plaintiffs Fireman's Fund Insurance Company (Fireman's Fund) and Transamerica Insurance Company (Transamerica). In consideration for signing the indemnity agreements, plaintiffs posted a Public Official Fidelity Bond, as sureties. On August 2, 1988 and September 14, 1988, Multnomah County made demands on Fireman's Fund and Transamerica respectively for payment on those bonds. Defendant stole funds from the estates of the wards for whom he was appointed Guardian and Conservator. Defendant was subsequently convicted of first degree theft and misconduct by a public official and ordered to pay $160,000 in restitution.

Plaintiffs investigated Multnomah County's claims in an effort to uncover any defenses. The defendant did not cooperate with plaintiffs and offered no assistance in defending the claims. Plaintiffs determined the claims were valid and paid $39,110,50 (Transamerica) and $90,384.39 (Fireman's Fund) to Multnomah County. Fireman's Fund claims an additional $1500 in expenses incurred in investigating and settling the claims.

Despite demands, defendant has refused to provide collateral security or otherwise repay plaintiffs for their losses.

STANDARDS

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ. P. 56(c). The materiality of a fact is determined by the substantive law on the issue. T.W. Electrical Service v. Pacific Electrical Contractors Ass'n., 809 F.2d 626, 630 (9th Cir.1987). The authenticity of a dispute is determined by whether the evidence is such that a reasonable party could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If the moving party shows the absence of a genuine issue of material fact, then the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324, 106 S.Ct. at 2553.

Special rules of construction apply to evaluating summary judgment motions: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Electrical, 809 F.2d at 630.

DISCUSSION

Plaintiffs argue that the defendant expressly agreed to indemnify them in consideration for plaintiffs acting as sureties on bonds. A loss in the amount of $39,110.50 has been incurred by Transamerica and a loss in the amount of $90,384.39 plus costs of investigation of $711.00 has been incurred by Fireman's Fund. Despite repeated demands, defendant has failed to hold plaintiffs harmless.

Defendant argues that plaintiffs overpaid the claim and that he is entitled to a jury decision as to how much he should pay for the remaining damages. Defendant states that plaintiffs have accepted the state circuit court's conclusions that, because defendant personally benefited from some of the checks, all of the checks were improper.

The written Indemnity Agreements signed by defendant supercedes any common law right to indemnity. Union Pacific Railway Co. v. Bridal Veil Lumber Co., 219 F.2d 825, 832 (9th Cir.1955), cert. denied, 350 U.S. 981, 76 S.Ct. 466, 100 L.Ed. 849 (1956); Southern Pacific Co. v. Morrison-Knudsen Co., 216 Or. 398, 338 P.2d 665 (1959). Any claim asserted against the surety, regardless if it is valid or outside the scope of the bond triggers the obligation to indemnify the surety. United Pacific Insurance Co. v....