The Cincinnati Ins. Co. v. GC Works, Inc.

• Decision Date: 25 February 2022
• Docket Number: 21-cv-21159-COOKE/DAMIAN
• Court: U.S. District Court — Southern District of Florida
• Parties: THE CINCINNATI INSURANCE COMPANY, a foreign corporation, Plaintiff, v. GC WORKS INC., a Florida corporation, et al., Defendants.

THE CINCINNATI INSURANCE COMPANY, a foreign corporation, Plaintiff,
v.
GC WORKS INC., a Florida corporation, et al., Defendants.

No. 21-cv-21159-COOKE/DAMIAN

United States District Court, S.D. Florida

February 25, 2022

REPORT AND RECOMMENDATION AS TO PLAINTIFF'S MOTION FOR FINAL DEFAULT JUDGMENT

MELISSA DAMIAN UNITED STATES MAGISTRATE JUDGE

THIS CAUSE is before the Court on Plaintiff, The Cincinnati Insurance Company's (“Plaintiff”), Motion for Final Default Judgment against Defendant, GC Works, Inc., (“Defendant” or “GC Works”) [ECF No. 9] (the “Motion”). This matter was referred to the undersigned for a Report and Recommendation by the Honorable Marcia G. Cooke, United States District Judge. [ECF No. 11]. See 28 U.S.C. § 636.

THIS COURT has considered Plaintiff's Motion and supporting documents, and the pertinent portions of the record, and held an evidentiary hearing on February 25, 2022. The Court observes that GC Works did not file a response to the Motion, and the time to do so has passed. For the following reasons, it is recommended that Plaintiff's Motion for Final Default Judgment [ECF No. 9] be granted in accordance with this Report and Recommendation.

1

I. PROCEDURAL POSTURE

On March 26, 2021, Plaintiff initiated the instant action against GC Works and Lance D. Wayne seeking damages for breach of an indemnity agreement and a demand promissory note executed by GC Works in favor of Plaintiff. [ECF No. 1]. GC Works was served with the Summons and Complaint on March 30, 2021 [ECF No. 6] and failed to respond. After GC Works failed to appear, Plaintiff moved for entry of default against GC Works [ECF No. 7], which the Clerk of Court subsequently entered on April 30, 2021 [ECF No. 8]. Plaintiff now moves for entry of final default judgment solely against GC Works^[1] as to Count III of the Complaint.^[2] [ECF No. 9].

As of the date of this Report, GC Works has not responded to the Complaint, the Motion, nor any other filings in this case. Nor has an attorney made an appearance on its behalf.

II. BACKGROUND

The Indemnity Agreement

As alleged in the Complaint, on November 17, 2017, GC Works and Lance Wayne (collectively, the “Indemnitors”) executed an Agreement of Indemnity (the “Agreement”) in favor of Plaintiff, its affiliates, and its agents. [See ECF No. 1 (“Complaint”) ¶¶ 7-10; see also ECF No. 9-1 (“Fox Aff. in Supp. of Mot.”) ¶ 7]. A copy of the Agreement is attached to the

2

Complaint. [ECF No. 1-1, Ex. “A”]. Pursuant to the Agreement, the Indemnitors agreed, in relevant part, to:

[E]xonerate, indemnify and keep indemnified [Plaintiff] from and against any and all liability for losses and expenses of whatsoever kind or nature, including the fees and disbursements of counsel, and against any and all said losses and expense which [Plaintiff] may sustain or incur: (i) by reason of having executed or procured the execution of any Bond or Bonds; (ii) by reason of the failure of the [Indemnitors] to perform or comply with the covenants and conditions of this Agreement; or (iii) in enforcing any of the covenants and conditions of this Agreement. [Plaintiff] may pay or compromise any claim, demand, suit, judgment or expense arising out of such Bond or Bonds and any such payment or compromise shall be binding upon the [Indemnitors] and included as a liability, loss or expense covered by this Indemnity Agreement

* * *

[Plaintiff] may pay or compromise any claim, demand, suit judgment or expense arising out of any Bond or Bonds and any such payment or compromise shall be binding upon the [Indemnitors] and included as a liability, loss or expense covered by this Indemnity Agreement, provided the same was made by [Plaintiff] in the reasonable belief that it was liable for the amount disbursed, or that such payment or compromise was reasonable under all circumstances.

* * *

Additionally, the Agreement provides:

The [Indemnitors] agree that their liability shall be construed as the liability of a compensated Surety, as broadly as the liability of [Plaintiff] is construed toward its Obligee and Beneficiaries under its Bond or Bonds.

[Compl., ¶¶ 11-14; Ex. “A”].

The Agreement clearly sets forth the Indemnitors' obligations to indemnify and keep Plaintiff, as the surety, indemnified “from and against any and all liability for losses and expenses of whatsoever kind or nature, including the fees and disbursements of counsel, and against any and all said losses and expense which the Surety may sustain or incur” as a result of issuing the payment and performance bonds or because of the Indemnitors' failure to

3

comply with the Agreement. Plaintiff agreed to issue payment and performance bonds naming GC Works as principal at the Indemnitors' request in consideration for GC Works' promise to comply with the terms of the Agreement. [Compl. ¶¶ 15-16; see also Fox Aff. in Supp. of Mot. ¶¶ 7-10].

The Project, Bond, and Litigation

Plaintiff alleges the Florida Department of Transportation (“FDOT”) contracted with GC Works to perform general contracting services on FDOT Financial Project No. 428290-2-72-01 in Miami-Dade County, Florida (the “Project”). At the Indemnitors' request, Plaintiff issued bond number B-2794909 (the “Bond”) for the Project naming GC Works as principal. GC Works subcontracted with A & M Brothers Concrete Corp. (the “Subcontractor”) to perform certain subcontractor services at the Project. Disputes arose between GC Works and the Subcontractor regarding the Project. [Compl. ¶¶ 17-20; Fox Aff. in Supp. of Mot. ¶ 11].

The Complaint further alleges that, consequently, GC Works sued the Subcontractor for the Subcontractor's alleged abandonment of the Project. In response, the Subcontractor countersued naming GC Works and Plaintiff as counter-defendants. In the countersuit, the Subcontractor demanded that Plaintiff pay damages under the Bond for GC Works' failure to fully pay the Subcontractor for labor, services, and materials provided at the Project. Plaintiff tendered its defense to GC Works. [Compl. ¶¶ 21-24].

As set forth in the Complaint, on April 25, 2019, a jury awarded $17, 500.00 in damages to the Subcontractor and against GC Works and Plaintiff. Thereafter, on November 8, 2019, the trial court awarded $207, 637.27 in attorney's fees, costs, and prejudgment interest to the Subcontractor and against GC Works and Plaintiff. On April 17, 2020, the Subcontractor, GC Works, and Plaintiff entered into a Settlement Agreement and Release,

4

wherein Plaintiff agreed to pay the Subcontractor $270, 000.00 (the “Settlement Funds”) in exchange for full and final settlement of the claims against Plaintiff and GC Works. Plaintiff alleges that by paying the Settlement Funds, it incurred losses due to issuing the Bond. [Compl. ¶¶ 25-28; Fox Aff. in Supp. of Mot. ¶¶ 12-14].

The Promissory Note

To reimburse Plaintiff for its losses (including the payment of the Settlement Funds to the Subcontractor), the Indemnitors executed a Demand Promissory Note (the “Note”) in favor of Plaintiff. [Compl. ¶ 29; Fox Aff. in Supp. of Mot. ¶ 15]. A copy of the Note is attached to the Complaint. [ECF No. 1-2, Ex. “B”]. Pursuant to the Note, the...