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Hartford Fire Insurance Co. v. Richter-Taylor Construction Specialists

May 21, 2007


The opinion of the court was delivered by: Reagan, District Judge


Defendants, Richter-Taylor Construction Specialists, Inc., Brian Taylor, Belinda Richmond Taylor, Brad Taylor, Jean A. Taylor, Linda L. Richter and Ronald R. Richter, move the Court, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, to dismiss this cause of action for lack of subject matter jurisdiction (Doc. 6).

I. Background

On February 16, 2007, Hartford Fire Insurance Company ("Hartford") filed a complaint for contractual indemnity, alleging breach of contract and common law reimbursement.*fn1 The following background is based on the complaint.

The Board of Education for the Neoga School District contracted with Defendant Richter-Taylor to provide labor and materials on a project to build a new school. In accordance with the Illinois Public Construction Bond Act (30 ILCS 550/1 et seq.), Richter-Taylor obtained payment and performance surety bonds for the school project to guarantee its performance obligations under the contracts and to ensure its payment obligations to subcontractors and suppliers. Hartford issued the payment and performance bonds on behalf of Richter-Taylor. To discharge its obligations under the bonds, Hartford paid claims totaling $112,125.15 from allegedly unpaid subcontractors, suppliers and the Neoga School District. Richter-Taylor has not indemnified Hartford for these claims, as required by the General Indemnity Agreement, and has not paid costs and expenses related to the bonds issued on its behalf.

II. Applicable Legal Standard

Generally, in reviewing a motion to dismiss, the Court "construe[s] the complaint in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from those allegations in his or her favor . . . . Dismissal is proper "only if it 'appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" McCready v. EBay, Inc., 453 F.3d 882, 887 (7th Cir. 2006) (internal citation omitted). Indeed, the law of this Circuit recognizes that, "a party need not plead much to survive a motion to dismiss" - not specific facts, not legal theories, and not anything in anticipation of a possible defense. Massey, 464 F.3d at 650 (citing Xechem, Inc. v. Bristol-Myers Squibb Co., 372 F.3d 899, 901-02 (7th Cir. 2004)).The gist of this Court's inquiry is "whether the complaint gives the defendant fair notice of what the suit is about and the grounds on which it rests." Mosely v. Board of Educ. of City of Chicago, 434 F.3d 527, 533 (7th Cir. 2006).See also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 (2002) (complaints need not allege facts; they need only present a claim for relief).

Defendants' 12(b)(1) motion challenges subject matter jurisdiction. The party invoking federal jurisdiction -- here, Hartford -- bears the burden of demonstrating that all jurisdictional requirements have been met. Chase v. Shop 'N Save Warehouse Foods, Inc., 110 F.3d 424, 427 (7th Cir. 1997). In reviewing a motion to dismiss under Rule 12(b)(1), a court may "look behind the plaintiff's allegations and make factual findings for purposes of assessing its subject matter jurisdiction."Palay v. United States, 349 F.3d 418, 424-25 (7th Cir. 2003). However, consideration of this evidence does not convert Defendants' motion regarding federal jurisdiction to a motion for summary judgment. Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir.1993).

III. Analysis

Hartford premised federal jurisdiction on diversity of citizenship and the existence of a controversy in the requisite amount. See 28 U.S.C. § 1332(a). Because the amount in controversy is met, and it is Hartford's citizenship that is at issue here, the Court makes no attempt to differentiate among the various Defendants, all of whom are alleged to be citizens of Illinois or Missouri.

28 U.S.C. § 1332(c) provides that a corporation shall be deemed a citizen of the state where it is incorporated and the state where it has its principal place of business. Defendants assert that Hartford's principal place of business is in Aurora, Illinois, as is evidenced by the performance bond entered into by Hartford for the transaction forming the subject matter of the complaint. Defendants' Exhibit A.

The surety is listed on the first page of the bond as follows:

SURETY (Name and Principal Place of Business)

Hartford Fire Insurance Company 4845 Meridian Parkway Aurora, IL 60504 Id. However, the copy of the performance bond submitted by Defendants is incomplete and does not include the power of attorney that authorized the signer of the bond to sign on behalf of ...

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