United States District Court, D. Maryland
THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE.
January 31, 2017, Plaintiff Travelers Casualty and Surety
Company of America ("Travelers") filed this breach
of contract action based on the alleged breach of an
indemnity agreement by Defendants C.R. Calderon Construction,
Inc. ("CRC"), Calderon I, LLC ("Calderon
I"), Carlos L. Calderon ("Mr. Calderon",, and
Ana P. Calderon ("Ms. Calderon".. Travelers alleges
that pursuant to a collateral security provision of that
indemnity agreemen,, Defendants were required, but failed, to
post a $228, 359.27 security deposit to cover Travelers'
potential losses stemming from a judgment issued by the
United States District Court for the District of Columbia
holding that Defendants and Travelers are jointly and
severally liable for unpaid wages. Pending before the Court
is Travelers' Motion for a Preliminary Injunction in
which Travelers seeks specific performance of the collateral
security provision of the indemnity agreemen.. Having
reviewed the Complaint and the briefs, the Court finds no
hearing necessary. See D. Md. Local R. 105.6 (2016).
For the reasons set forth below, the Motion is GRANTED.
underlying facts are not in dispute. In January 2011, CRC
entered into a subcontract to install drywall at the H. Carl
Moultrie Courthouse in Washington,
D.C. That subcontract was
"* conditioned on CRC providing a
payment bond. Travelers provided the required bond (the
"Payment Bond"), which covered, as relevant here,
payments to "all persons supplying labor." Compl.
Ex. 1 at 2, ECF NO. 1-1. Travelers, in turn,
conditioned the Payment Bond on Defendants' execution of
an indemnity agreement (the "Indemntty
Agreemen"" or "Agreement"). The Indemnity
Agreement was executed in Maryland by all four Defendanss on
March 14, 2011.
Indemnity Agreement extends to "[a]ny and all
bonds" executed or procured by Travelers on behalf of
any of the indemnitors, and indemnifies Travelers for loss
resulting from any bond, with "loss" defined as
"[a]ll loss and expense of any kind or nature, including
attorneyss and other professional fees, " such as loss
and expense incurred in "defending any action in
connection with any Bond." Compl. Ex. 2
¶ 1 ("Indemntty Agmt"), ECF
No. 1-2. The Indemnity Agreement contains a collateral
security provision, which states:
Indemnitors agree to deposit with Company, upon demand, an
amount as determined by Company sufficient to discharge any
Loss or anticipated Loss. . . . Sums
deposited with Company pursuant to this paragraph may be used
by Company to pay such claim or be held by Company as
collateral security against any Loss or unpaid premium on any
Bond. . . . Indemnitors agree that Company
would suffer irreparable damage and would not have an
adequate remedy at law if Indemnitoss fail to comply with the
provisions of this paragraph.
Id. ¶ 5. In a separate section
entitled, "Notice of Rights, " the Indemnity
Agreement provides that Travelers is entitled to specific
performance of "the terms of this Agreement."
id ¶16. Lastly, the Agreement grants Travelers
a security interest in Defendants' property, excepting
Mr. and Ms. Calderonss residence. In June 2013, Travelers
perfected its security interest in Defendants' property.
April 2012, 13 construction workers employed by CRC on the
courthouse project made a claim against the Payment Bond for
unpaid wages. On May 1, 2012, those workers filed suit
against CRC, Mr. Calderon, Ms. Calderon, and Travelers, as
well as against CRC's subcontractor on the courthouse
project, in the United States District Court for the District
of Columbia (the "D.C. Litigation".. On December
22, 2016, following a bench trial, the court entered judgment
against all defendants, jointly and severally, in the amount
of $207, 599.34 for unpaid wages, plus attorneyss fees in an
amount to be later determined by the court. Travelers'
liability was premised on its role as surety for CRC's
January 12, 2017, pursuant to the Indemnity Agreemen,,
Travelers demanded that Defendants deposit with Travelers by
January 17, 2017 collateral security in the amount of $228,
359.27, the amount required for Travelers to post a
supersedeas bond to stay the judgment in the D.C.
Litigation pending appeal. In that demand, Travelers also
informed Defendants that its own attorneyss fees for the D.C.
Litigation totaled over $80, 000, and that plaintiffs'
counsel in the D.C. Litigation would be seeking over $600,
000 in attorneyss fees and costs. On January 13, 2017,
Travelers filed its Notice of Appeal in the D.C. Litigation
and posted the required $228, 359.27 bond. To date, Travelers
has received no collateral security from Defendants.
filed suit against Defendants in this Court, asserting a
breach of the Indemnity Agreement based on (1)
Defendants' failure to reimburse Travelers $82, 167.79
for its legal fees arising from the D.C. Litigation; and (2)
Defendants' failure to satisfy Travelers' demand for
$228, 359.27 in collateral security. As to the latter claim,
Travelers now seeks a preliminary injunction requiring
specific performance of Defendants' obligation to post
the collateral security. In opposing the Motion, Defendants
do not challenge the validity of the Indemnity Agreemen..
Instead, they assert that the Indemnity Agreement does not
cover the posting of a supersedeas bond, the
collateral security provision does not provide specific
performance as a remedy, and their obligations under the
Indemnity Agreement can be satisfied by providing Travelers a
security interest in Defendants' property.
obtain a preliminary injunction, moving parties must
establish that (1) they are likely to succeed on the merits,
(2) they are likely to suffer irreparable harm in the absence
of preliminary relief, (3) the balance of equities tips in
their favor, and (4) an injunction is in the public interest.
Winter v. Nat. Res. De!. Council, Inc., 555 U.S. 7,
20 (2008); see Dewhurst v. Century Aluminum Co., 649
F.3d 287, 290 (4th Cir. 2011). A moving party must satisfy
each requirement as articulated. Real Truth About Obama,
Inc. v. Fed. Election Comm'n, 575 F.3d 342, 347 (4th
Cir. 2009), vacated on other grounds, 559 U.S. 1089
(2010). Because a preliminary injunction is "an
extraordinary remedy, " it "may only be awarded
upon a clear showing that the plaintiff is entitled to such
relief." Winter, 555 U.S. at 22.
Likelihood of ...