SAN FRANCISCO – The U.S. District Court for the Northern District of California upheld an indemnity agreement Sept. 14.
U.S. Magistrate Judge Jacqueline Scott Corley authored the opinion granting summary judgment to defendants Patrick Coyle and Coyle Residential.
Traveler’s Casualty and Surety Co. of America filed a lawsuit against Coyle/Reno Joint Venture, formed by Coyle Residential and Reno Contracting, hoping to enforce an indemnity agreement it had with them. The Coyle defendants responded with a cross-claim against Reno under a defense and indemnity agreement those two parties had with one another.
The court previously granted a motion for summary judgment for Traveler’s, determining the defendants breached their contract to indemnify Traveler’s from any liability. The Coyle defendants subsequently requested a motion for summary judgement against Reno, now hoping the court will back and enforce their indemnity agreement. The court approved the motion.
“Because Reno agreed to indemnify Coyle for all losses under the parties’ indemnity agreement with Traveler’s, and there is no genuine dispute as to the validity or enforceability of the Coyle and Reno indemnity agreement, Coyle is entitled to judgment as a matter of law,” the court stated.
The legal issues started after Coyle Residential and Reno signed on to a $43 million contract with Riverview Capital Investments LLC in 2011 and Traveler’s issued the bond, but not before it required Reno and Coyle to sign an indemnity agreement.
Things went left after Riverview submitted in 2015 a further notice of default and intent to terminate the contract with Coyle and Reno over allegations they were in material default. It then terminated the contract, leading multiple subcontractors to take legal action.
Traveler’s lawsuit was filed in 2017 over allegations of breach of contract and declaratory relief.
Reno allegedly verbally reassured Patrick Coyle he would honor the indemnity agreement, but Reno had yet to respond to Coyle’s June request for defense and indemnity. As of late, Patrick Coyle alleges he has racked up $23,338 in legal fees and costs so he could defend himself in Traveler’s lawsuit.
While Traveler’s wanted to hold the defendants accountable for their indemnity agreement, its lawsuit triggered Reno’s obligation to back up the Coyle defendants in their separate agreement, the court decided.
The court also ordered Reno to pay Coyle the $22,338 he’s paid for legal fees as well as any judgement Traveler’s wants to collect from Coyle.