United States District Court, D. North Dakota
The Cincinnati Insurance Company, an Ohio Corporation, Plaintiff,
B & B Paving, Inc. d/b/a B & B Dirtworks, Michael Baumgartner, Nancy Baumgartner, Defendants.
ORDER DENYING REQUEST FOR CERTIFICATION OF
Charles S. Miller, Jr., Magistrate Judge.
the court is The Cincinnati Insurance Company
(“Cincinnati”)'s Motion to Certify Questions
of Law to the North Dakota Supreme Court, wherein Cincinnati
requests the court certify four questions to the North Dakota
Supreme Court. (Doc. No. 43). B & B Paving, Inc., Michael
Baumgartner, and Nancy Baumgartner (“the
Defendants”) oppose the motion. (Doc. No. 46).
court has previously set forth the entire factual background
of this dispute. (Doc. Nos. 27, 42); see also Cincinnati
Ins. Co. v. B & B Paving, Inc., No. 1-16-cv-340,
2017 WL 4246865 (D.N.D. September 25, 2017)
(“Cincinnati I”); Cincinnati Ins.
Co. v. B & B Paving, Inc. No. 1-16-cv-340, 2018 WL
504400 (D.N.D. January 22, 2018) (“Cincinnati
speaking, Cincinnati and the Defendants executed two surety
bonds for various construction services to be provided by the
Defendants. As is relevant to this case, those bonds are
identical. Cincinnati and the Defendants also executed
corresponding indemnity agreements, under which the
Defendants agreed to indemnify Cincinnati “and hold it
harmless from and against any and all liability, losses,
costs, damages, attorneys' fees, disbursements and
expenses of whatever kind or nature which the Surety may
sustain or incur by reason or in consequence of having
executed or procured the execution of the” Surety
Bonds. (Doc. Nos. 1-1, 1-2). The Defendants executed these
indemnity agreements jointly and severally. Cincinnati
ultimately received and paid out claims under the bonds
totaling $82, 064.95. (Doc. No. 33-1). Cincinnati also
incurred $13, 985.70 in costs, expenses, and attorneys fees
in discharging its obligations under the surety bonds and in
prosecuting this breach of contract case under the indemnity
agreements. In sum, Cincinnati sought judgment for
$96.050.65, which was inclusive of the paid bond claims,
attorneys' fees, and costs and expenses.
Cincinnati I, the court granted Cincinnati's
motion for summary judgment insofar as the Defendants
breached the indemnity agreements for not indemnifying
Cincinnati. The court further concluded Cincinnati was
entitled to judgment in the amount of $82, 064.95, which
represented the amounts paid out under the bonds. The court,
however, denied Cincinnati's motion as to the remaining
$13, 985.70 without prejudice because Cincinnati had not
itemized the requested expenses to the court's
satisfaction and the court had doubts about whether North
Dakota law allowed for the collection of that amount. The
court directed Cincinnati to provide supplemental briefing
and affidavits as to the itemization issue and the
court's collectability concerns.
Cincinnati II, the court considered the supplemental
briefing and affidavits submitted by Cincinnati. (Doc. Nos.
38, 41). The supplemental itemized statement of loss
indicated Cincinnati sought three categories of damages: (1)
amounts paid out under the surety bonds; (2) investigation
expenses; and (3) attorneys' fees. As concluded in
Cincinnati I, the court concluded Cincinnati was
entitled to $82, 064.95 under category (1). The court further
concluded Cincinnati was entitled to $27.00 under category
(2). The court, however, concluded Cincinnati was not
entitled to attorney's fees under category (3) because
N.D.C.C. § 28-26-04, as applied by the North Dakota
Supreme Court in Hartford Acc. & Indem. Co. v.
Anderson, 155 N.W.2d 728 (N.D. 1968), invalidated the
attorney's fees provisions Cincinnati sought to enforce.
Accordingly, the court concluded Cincinnati was entitled to
$82, 091.95 and directed Cincinnati to provide a calculation
of potentially applicable prejudgment interest under N.D.C.C.
§ 32-03-04 and N.D.C.C. § 47-14-05 for purposes of
entering final judgment. Instead of doing so, Cincinnati
filed the instant motion.
requests the court certify the following four questions to
the North Dakota Supreme Court under N.D. R. App. P. 47(a):
1. Is an indemnity agreement “evidence of a debt”
for purposes of N.D.C.C. § 28-26-04?
2. Does an indemnity agreement meet the definition of a bond
or note for purposes of N.D.C.C. § 28-26-04?
3. Does N.D.C.C. § 28-26-04 invalidate or void an
attorneys' fee provision in an indemnity agreement
executed in favor of a surety as consideration for the
surety's insurance of a surety bond?
4. Does N.D.C.C. § 28-26-04 permit a surety to recover
attorneys' fees and costs in an action based on
contractual indemnity, for losses incurred by a surety in
discharging its obligations under a bond and in enforcing the
terms of the indemnity agreement, where the indemnity
agreement provides for attorneys' fees and legal costs?
No. 43). Cincinnati argues certification is warranted because
of a “grave conflict in the precedent created by the
Supreme Court of North Dakota in whether attorneys' fees
provisions in indemnity agreements are subject to the
State's invalidation statute, N.D.C.C. §
28-26-04.” (Doc. No. 44 p. 2). The Defendants argue
certification is unwarranted because Hartford
plainly holds attorney's fees provisions contained in