United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JEFFREY T. GILBERT, Magistrate Judge.
This matter is before the Court on Plaintiff Developers Surety and Indemnity Company's Motion for Summary Judgment [Dkt.#63]. Plaintiff Developers Surety and Indemnity Company ("Developers Surety") filed this lawsuit against Defendants Kipling Homes, L.L.C. ("Kipling Homes") and Edward Mattox ("Mattox"), individually, for breach of an indemnity agreement (the "Indemnity Agreement") dated March 20, 2002. Developers Surety seeks to hold Defendants liable for losses, including unpaid premiums, claims paid, costs, expenses and attorneys' fees, it has incurred as a result of issuing the Lake Forrest of Shorewood and Kipling Development Corporation bonds. Developers Surety seeks a judgment against both Defendants, but only Mattox filed a response opposing Developer Surety's Motion for Summary Judgment. Mattox disputes his individual liability under the Indemnity Agreement. For all of the reasons discussed herein, Developers Surety's Motion for Summary Judgment is granted.
Developers Surety is an Iowa corporation with its principal place of business in Irvine, California and is a surety licensed to conduct business in Illinois. Mattox Resp. to LR 56.1 Statement [Dkt.#71], at ¶1. Kipling Homes LLC, an Illinois limited liability company that primarily was engaged in real estate development, was dissolved in 2011. Id. at ¶2. During the relevant time period involved in this action, Developers Surety was in the business of providing surety bonds to, among others, companies that develop real estate subdivisions to guarantee the completion of the development projects. Id. at ¶4. Kipling Homes requested surety bonds that it needed for its real estate development business from Developers Surety though Scheer's Inc., which acted as the broker between Developers Surety and Kipling Homes. Id. at ¶¶5, 7.
Before Developers Surety issued any bonds requested by Kipling Homes and/or its affiliated companies, Developers Surety required that Kipling Homes and Edward Mattox enter into an Indemnity Agreement in which Kipling Homes and Mattox promised, among other things, to indemnify Developers Surety for any losses that Developers Surety incurred as a result of issuing subdivisions bonds on behalf of Kipling Homes. Mattox Resp. to LR 56.1 Statement [Dkt.#71], at ¶8. The Indemnity Agreement was executed on March 20, 2002, by the following entities and/or individuals: Kipling Homes as Principal, through Mattox and Peter Cinquegrani as its managing members; Inland Electric Corporation ("Inland Electric") as an Indemnitor, though Mattox as its president and Pasquale Salvaggio as is vice president; and Mattox, individually, as an Indemnitor. Id. at ¶12.
In a letter dated April 15, 2002, on Kipling Development Corporation letterhead, Inland Electric, through Mattox and Cinquegrani, authorized Developers Surety to amend the Indemnity Agreement to add the following annotation to the definition of "Kipling Homes, LLC" as principal under the Indemnity Agreement: "any of its present or future majority owned or controlled subsidiaries or affiliates, whether alone or in joint venture with others; or any corporation, partnership or person, upon the written request of the undersigned." Id. at ¶12; see also Developers Surety LR 56.1 Statement of Facts [Dkt.#65-4], Ex. 2. Mattox does not dispute that the definition of Kipling Homes LLC as Principal was amended to include "any of its present or future majority owned or controlled subsidiaries or affiliates, whether alone or in joint venture with others; or any corporation, partnership or person, upon the written request of the undersigned." Id. at ¶13.
Lake Forrest of Shorewood was a majority owned or controlled subsidiary of Kipling Homes. Mattox Resp. to LR 56.1 Statement [Dkt.#71], at ¶14. On June 20, 2005, Developers Surety issued Bonds No. 716703S and 716704S, in the respective amounts of $616, 315.09 and $2, 676, 765.56, on behalf of Lake Forrest of Shorewood as principal in favor of the Village of Shorewood, Illinois for development of the Kipling Estates Unit 8, Phases 1 and 2 subdivisions. Id. at ¶15.
Kipling Development Corporation was an affiliated company of Kipling Homes. Mattox Resp. to LR 56.1 Statement [Dkt.#71], at ¶17. On October 22, 2002, Developers Surety issued Bond No. 887745S in the amount of $1, 263, 452.00 on behalf of Kipling Development Corporation as principal in favor of the City of Joliet, Illinois for development of the Timber Oaks subdivision. Id. at ¶22.
Both the Village of Shorewood and the City of Joliet made demands on the bonds issued by Developers Surety in the amount of $1, 853, 919.00. Mattox Resp. to LR 56.1 Statement [Dkt.#71], at ¶24. On May 6, 2011, Developers Surety sent a letter to Kipling Homes and Mattox notifying them of the claims under the bonds and requesting that they post $1, 878, 919.00 in collateral with Developers Surety under the terms of the Indemnity Agreement for the claims made and anticipated costs. Id. at ¶25. Neither deposited the requested collateral. Id. at ¶26. Developers Surety has not been reimbursed for any of its losses or related costs incurred as a result of issuing Bond Nos. 716703S, 716704S, and 887745S. Id. at ¶28.
Summary judgment is proper when "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). In determining whether a genuine issue of material fact exists, the Court must view the evidence and draw all reasonable inferences in favor of the party opposing the motion. See Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, the Court will limit its analysis of the facts to that evidence that is supported by the parties' Local Rule 56.1 statements properly before the Court. Bordelon v. Chicago Sch. Reform Bd. of Tr., 233 F.3d 524, 529 (7th Cir. 2000). When a proposed statement of fact is supported by the record and not adequately rebutted, the Court will accept that statement as true in the context of summary judgment motion. An adequate rebuttal requires a citation to specific support in the record; an unsubstantiated denial is not adequate. See Albiero v. City of Kankakee, 246 F.3d 927, 933 (7th Cir. 2001); Drake v. Minnesota Mining & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) ("Rule 56 demands something more specific than the bald assertion of the general truth of a particular matter[;] rather it requires affidavits that cite specific concrete facts establishing the existence of the truth of the matter asserted."); Evergreen Nat. Indem. Co. v. R & W Clark Const., Inc./Continental Const., 2011 WL 5122697, at *4 (N.D. Ill. 2011).
The central dispute in this case is whether Defendants are obligated to indemnify Developers Surety for unpaid premiums, claims made and other expenses under the Lake Forrest of Shorewood and Kipling Development Corporation bonds. Developers Surety argues that Lake Forrest of Shorewood and Kipling Development Corporation are principals under the Indemnity Agreement because they are majority owned or controlled subsidiaries or affiliates of Kipling Homes, and therefore, Defendants are liable under the Indemnity Agreement. Kipling Homes has not filed any response to Developers Surety's Motion, but Mattox disputes that he is obligated as an Indemnitor under the Indemnity Agreement to indemnify Developers Surety for the losses it has incurred.
In Illinois, indemnity agreements are construed - like any other contract - to give effect to the intention of the parties. See Hanover Ins. Co. v. Smith, 182 Ill.App.3d 793, 796, 538 N.E.2d 710 (Ill.App. 1st Dist. 1989). In order to discern the intent of the parties, a court will look to the language in the contract. United States Fidelity Guaranty Co. v. Klein Corp., 190 Ill.App.3d 250, 254, 558 N.E.2d 1047 (Ill.App. 1st Dist. 1990). The language is to be given its plain and ordinary ...