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The Guarantee Company of North America Usa v. Sbn Enterprises

July 27, 2011


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



Before the Court is Plaintiff The Guarantee Company of North America USA's ("GCNA") motion for partial summary judgment against Defendants SBN Enterprises, Inc. ("SBN"), Christakis Karamanos and Christallo Karamanos (collectively, the "Indemnitors"), and The Karamanos Irrevocable Family Trust (the "Trust"). The motion is unopposed. For the following reasons, the Court will grant the motion.


SBN is a construction contracting business that performs work in connection with public and private construction projects. In 2001, to obtain surety bonds from GCNA on behalf of SBN, as principal, the Indemnitors executed an Agreement of Indemnity (the "Indemnity Agreement") in favor of GCNA, as indemnitee.*fn1 Pursuant to the Indemnity Agreement, the Indemnitors agreed to indemnify GCNA from losses and expenses incurred as a result of the issuance of the surety bonds on behalf of SBN. SBN breached several of its bonded obligations for which GNCA was the surety. As a result, GCNA incurred losses and expenses consistent with its bonded obligations, including satisfaction of claims on the bonds, as well as consultants' and attorneys' fees. The Indemnitors, however, failed to reimburse GCNA for its losses and expenses.

The Indemnity Agreement also provided that Indemnitors must deposit with GCNA, as collateral security, an amount equal to any reserve established by GCNA related to the surety bonds issued on behalf of SBN. GCNA demanded such a deposit, but Indemnitors failed to make the deposit. In addition, Indemnitors conveyed real property located at 1235 Jasam Court, Toms River, New Jersey (the "Property") to the Trust for one dollar, after one of the Indemnitors was put on notice by GCNA of some of the claims asserted under the SBN surety bonds. The market value of the Property was appraised at $725,000.

On October 23, 2009, GCNA commenced this action by filing its Complaint with the Court in which GCNA seeks, among other things, the deposit of collateral and reimbursement of losses and expenses from Indemnitors as set forth in the Indemnity Agreement, as well as a judgment voiding the conveyance of the Property from Indemnitors to the Trust. By May 14, 2010, it appeared that the matter had been settled by the parties and the Court dismissed the action without prejudice. Settlement, however, was not consummated and the Court reopened the case on July 13, 2010, following an unopposed motion to reopen filed by GCNA. On December 7, 2010, GCNA filed the instant motion for partial summary judgment. The motion is unopposed.


To prevail on a motion for summary judgment, the moving party must establish "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The district court must determine whether disputed issues of material fact exist, but the court cannot resolve factual disputes in a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

In determining whether a genuine issue of material fact exists, the court must view the facts in the light most favorable to the non-moving party and extend all reasonable inferences to that party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Stephens v. Kerrigan, 122 F.3d 171, 176-77 (3d Cir. 1997). The moving party always bears the initial burden of demonstrating the absence of a genuine issue of material fact, regardless of which party ultimately would have the burden of persuasion at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Once the moving party has met its opening burden, the non-moving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. at 324. Thus, the non-moving party may not rest upon the mere allegations or denials of its pleadings. Id. "[T]he plain language of Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.

Once the moving party has demonstrated to the court the absence of a material fact at issue, the Supreme Court has stated that the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts...." Matsushita, 475 U.S. at 586-87 (citations omitted). In other words, "[i]f the evidence [submitted by the non-moving party] is merely colorable ... or is not significantly probative ... summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).

The Supreme Court has specifically recognized that "[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupportable claims or defenses, and [ ] that [the rule] should be interpreted in a way that allows it to accomplish this purpose." Celotex, 477 U.S. at 323-24. Thus, "[w]hen the record is such that it would not support a rational finding that an essential element of the non-moving party's claim or defense exists, summary judgment must be entered for the moving party." Turner v. Schering-Plough Corp., 901 F.2d 335, 341 (3d Cir. 1990).


Agreements to indemnify are "interpreted in accordance with general principles of contract law." IFC Interconsult, AG v. Safeguard Int'l Partners, LLC, 438 F.3d 298, 317 (3d Cir. 2006); Englert v. The Home Depot, 911 A.2d 72, 77 (N.J. Super. Ct. App. Div. 2006). Under New Jersey law, "where the terms of a contract are clear . . . the court must enforce it as written." Cnty. of Morris v. Fauver, 707 A.2d 958, 969 (N.J. 1998). On motions for summary judgment, the courts have routinely enforced indemnity agreements that are similar to the Indemnity Agreement at issue in this case. See, e.g., U.S. Fidelity & Guar. Co. v. Feibus, 15 F. Supp. 2d 579 (M.D. Pa. 1998), aff'd, 185 F.3d 864 (3d Cir. 1999); ...

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