United States District Court, D. North Dakota
United States of America for the use and benefit of Curtis C. Davis d/b/a Davis Contracting Company, Plaintiff,
Persons Service Company, LLC, Byrd Brothers Emergency Services, LLC, and Travelers Casualty and Surety Company of America, Defendants, Travelers Casualty and Surety Company of America, Third-Party Plaintiff,
Byrd Brothers, Inc., Claude R. Byrd, James K. Byrd, and Donna R. Byrd, Third-Party Defendants.
REPORT AND RECOMMENDATION RE MOTION FOR DEFAULT
Charles S. Miller, Jr., United States Magistrate Judge.
the court is Third-Party Plaintiff Travelers Casualty and
Surety Company of America's (“Travelers”)
Motion for Default Judgment. (Doc. No. 80). In the motion,
Travelers seeks a default judgment against Defendant Byrd
Brother Emergency Services, LLC (“BBES”) and
Third-Party Defendants Byrd Brother, Inc.,
(“BBI”), Claude R. Byrd, James, K. Byrd, and
Donna R. Byrd (“collectively the Byrds”), jointly
and severally, in the amount of $727, 767.85.
action began with the catastrophic flooding that befell
Minot, North Dakota, in the summer of 2011. BBES contracted
with the Army Corp of Engineers to construct a temporary
housing site. At the time, BBES had a Performance Bond with
Travelers (“the bond”). (Doc. No. 1-3). BBES
contracted with Davis Contracting Company
(“Davis”) to provide various first-tier
subcontracting services at the construction site. Persons
Service Company, LLC (“Persons”), another
first-tier subcontractor at the site, also contracted with
Davis to have Davis provide additional second-tier
subcontracting services. Both BBES and Persons allegedly did
not pay Davis for services provided. Davis then filed suit
against BBES and Persons for, amongst other claims, breach of
contract and sought the amounts owing under the contracts.
(Doc. No. 1). Davis also filed a Miller Act claim against
Travelers under the Bond. (Doc. No. 1). This original
component of the action has settled, leaving only
Travelers' claims, as discussed below, remaining. (Doc.
the court's leave, Travelers filed a cross-claim against
BBES and a third-party complaint against BBI and the Byrds.
(Doc. No. 48). In conjunction with the bond, BBI and the
Byrds signed a general agreement of indemnity (“the
indemnity agreement”), under which they agreed to
indemnify Travelers for any losses Travelers incurred under
the bond. (Doc. No. 48-2). Travelers alleged it received and
paid multiple claims under the bond for construction projects
in Texas, Louisiana, and North Carolina, all of which were in
addition to the claims arising from the Minot flood project.
Travelers alleged BBES and the Byrds breached the indemnity
agreement by failing to remit payment to Travelers for
amounts paid out to claimants under the bond. As Travelers
has represented to the court, it has incurred $727, 767.85 in
losses, which includes “bond payments, attorneys'
fees, costs, and expenses . . . .” (Doc. No. 80).
appeared in this action, filing its answer on November 28,
2012. (Doc. No. 11). Pursuant to Fed.R.Civ.P. 5(b)(2)(C),
Travelers served BBES with its cross-claim on July 18, 2014,
by mailing it to BBES's last known address. (Doc. No.
60-1). Thereafter, Travelers moved for default. (Doc. No.
60). The Clerk of Court entered default on September 29,
2014. (Doc. No. 64).
Clerk of Court issued summonses for BBI, James Byrd, Claude
E. Byrd, and Donna Byrd. (Doc. No. 49). This summons was
returned executed as to James K. Byrd on August 8, 2014.
(Doc. No. 53). Travelers represents James K. Byrd is the
President of BBI. (Doc. No. 61-1). This summons was returned
executed as to Donna R. Byrd on September 16, 2014. (Doc. No.
58). This summons was returned executed as to Claude R. Byrd
on December 9, 2016. (Doc. No. 77). None of these parties
have answered or otherwise appeared and, upon motion from
Travelers, the Clerk of Court entered default accordingly.
(Doc. Nos. 63, 64, 79). Travelers now seeks entry of default
judgment against these parties, none of which have responded.
D.N.D. Civ. L. R. 7.1(F).
foregoing, entry of default judgment against the BBES, BBI,
and the Byrds is appropriate. None of the parties are minors,
incompetent, or members of a miliary service. (Doc. No.
80-1). Years have lapsed since many of the parties were
summoned in this action, with the least dilatory having been
served nearly ten months ago. Accordingly, the undersigned
recommends default judgment be entered against BBES, BBI, and
the Byrds under Fed.R.Civ.P. 55.
the appropriate amount for this judgment, the undersigned has
reservations about Travelers' request for $727, 767.85.
The Eighth Circuit has observed:
“It is a familiar practice and an exercise of judicial
power for a court upon default, by taking evidence when
necessary or by computation from facts of record, to fix the
amount which the plaintiff is lawfully entitled to recover
and to give judgment accordingly.” Pope v. United
States, 323 U.S. 1, 12, 65 S.Ct. 16, 89 L.Ed. 3 (1944).
“The court may conduct hearings or make referrals ...
when, to enter or effectuate judgment, it needs to ...
determine the amount of damages.” Fed.R.Civ.P.
55(b)(2)(B). See also Am. Red Cross v. Cmty. Blood
Ctr., 257 F.3d 859, 864 (8th Cir.2001) (“When a
default judgment is entered on a claim for an indefinite or
uncertain amount of damages, facts alleged in the complaint
are taken as true, except facts relating to the amount of
damages, which must be proved in a supplemental hearing or
proceeding.” (quoting Everyday Learning Corp. v.
Larson, 242 F.3d 815, 818 (8th Cir.2001) (internal
quotation marks omitted))). Once the amount of damages has
been established, the court may enter judgment pursuant to
Stephenson v. El-Batrawi, 524 F.3d 907, 915-16 (8th
Cir. 2008). In support of the claimed $727, 767.85, Travelers
has submitted spreadsheets and an affidavit sworn to by a
Travelers' bond executive, (Doc. Nos. 80-2, 80-3), which,
according to it, establish the amount owing under the prima
facie evidence clause found in the implicated indemnity
agreement. The undersigned has two concerns about the
propriety of the amount requested for entry of default
first problem pertains to how Travelers presented its claim
for $727, 767.85. The spreadsheets submitted by Travelers are
little more than check stubs detailing amounts paid, to whom,
and when made. The spreadsheets do not provide any
information as to the purposes of such payments, leaving the
court to guess as to what amounts represent payments made for
claims against the bond, what amounts are attorneys'
fees, what amounts are investigative expenses, etc. Though
not warranting denial of the requested amount, this lacking
makes it difficult to evaluate the reasonableness and
appropriateness of the claim amounts and parlays into a more
not at all clear what state law should govern this action.
Despite having a North Dakota forum, this action concerns a
bond and an indemnity agreement not executed in North Dakota
by parties not domiciled in North Dakota, both of which
concern various construction projects in North Dakota, Texas,
Louisiana, and North Carolina. Sitting in diversity, this
court must apply North Dakota choice of law principles, under
which the court is to employ a two-prong test evaluating all
relevant contacts along with Leflar's choice-influencing
considerations. Am. Fire and Casualty Co. v. Hegel,
847 F.3d 956, 959 (8th Cir. 2017). Given that this action
concerns multiple out of state parties performing under a
contract in multiple states, the law of multiple states could
arguably apply. Compounding this uncertainty, the indemnity
agreement contains a jurisdictional provision that could
arguably dictate the law of the forum in which Travelers
sought to adjudicate claims under the indemnity agreement is
to apply. (Doc. No. 48-2 pp. 2-3) (stating “[i]n any
legal proceeding brought by or against Company that in any
way relates to this Agreement, each Indemnitor, for itself
and its property, irrevocably and unconditionally submits to
the exclusive jurisdiction, at the sole and exclusive option
of Company, of the courts in any state in which any
Indemnitor resides, has property, or in which any Contract is
preformed.”). What law is to apply could have profound
consequences on the amount Travelers may be entitled to
noted above, the total amount requested by Travelers
“include[s] bond payments, attorneys' fees, costs,
and expenses . . . .” (Doc. No. 80-1 p. 7). If North
Dakota law was to apply, Travelers may not be able to collect
a good deal of its request amounts. In a recent order
involving a surety attempting to enforce an indemnity
agreement containing an attorneys' fees provision, which
was executed as a condition for issuance of a surety bond,
the undersigned recognized:
In North Dakota, attorneys' fees are generally available
to a prevailing party only when specifically allowed for by
contract. N.D.C.C. § 28-26-01(1). A contractual
allowance for collection of attorneys' fees