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Developers Surety and Indemnity Co. v. Barlow

United States Court of Appeals, Tenth Circuit

October 15, 2015

DEVELOPERS SURETY AND INDEMNITY COMPANY, Plaintiff - Appellee,
v.
MATTHEW I. BARLOW, individually; LISA BARLOW, individually, Defendants-Appellants, and TERI HANSEN, individually, Defendant.

(D.C. No. 2:12-CV-00289-TC-DBP) (D. Utah)

Before HARTZ, PORFILIO, and PHILLIPS, Circuit Judges.

ORDER AND JUDGMENT [*]

Harris L Hartz Circuit Judge

Matthew and Lisa Barlow appeal pro se from the district court's judgment in favor of Developers Surety and Indemnity Company on Developers' claim that the Barlows breached their contractual obligations under an indemnity agreement. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I. BACKGROUND

In 1995, Matthew Barlow and Ben Hansen formed Network Electric, Inc. They were Network's sole officers, directors, and shareholders.

Anticipating federal construction contracts in Utah that would require bonds, the Barlows, Ben and Teri Hansen, and Network (collectively, the Indemnitors) entered into an indemnity agreement with Developers in April 2004 (the Agreement). Matthew Barlow and Ben Hansen signed the Agreement in their individual capacities and as officers of Network. Their spouses signed in their individual capacities. The Indemnitors agreed to jointly and severally indemnify Developers from "any and all liability, loss, claims, demands, costs, damages, [and] attorneys' fees and expenses" arising from bonds Developers might issue in the future on behalf of Network. R., Vol. I, pt. 1 at 278, ¶ 1. The Indemnitors warranted that they were "specifically and beneficially interested in obtaining each Bond." Id. at 283, ¶ 14.3. The Agreement defined "Bond" as any surety contract issued "before or after the date of [the] Agreement." Id. at 278. Under the Agreement the Indemnitors' obligations would continue "unless terminated as to future Bonds by written notice to [Developers] as . . . provided [in the Agreement]." Id. at 282, ¶ 13. The notice provision required an Indemnitor to give written notice to Developers "by certified mail, return receipt requested, addressed to [Developers] at [Developers'] address" and to state in the notice "the effective date . . . of the termination of the liability of such Indemnitor for any future Bond." Id. at 283, ¶¶ 13.1, 13.2.

By March 2006, Matthew Barlow had sold his stock and interest in Network, severed all ties with the company, and taken a new job. The Barlows moved to Arizona soon thereafter.

Between July 2008 and June 2009, Developers issued six performance and payment bonds on behalf of Network. Network paid a premium to Developers for each bond. Developers later received claims against the bonds in excess of $400, 000. It elected to pay the claims in full and then demanded that the Indemnitors meet their obligations under the Agreement. After Network paid Developers a little more than $75, 000, Developers filed this action in the United States District Court for the District of Utah, seeking to recover the remainder of its losses as well as expenses and legal fees from the Indemnitors.

The district court ultimately granted summary judgment against the Barlows for $485, 646.49 and denied the Barlows' motion for summary judgment. This appeal followed.[1]

II. DISCUSSION

We review de novo the district court's rulings on motions for summary judgment, viewing the evidence and drawing reasonable inferences from it in the light most favorable to the nonmovant. See Doe v. City of Albuquerque, 667 F.3d 1111, 1122 (10th Cir. 2012). Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Because the Barlows proceed pro se, we construe their filings liberally. See Yang v. Archuleta, 525 F.3d 925, 927 n.1 (10th Cir. 2008).

The gist of the Barlows' arguments is that they are not liable under the Agreement because they received no benefit from the issuance of bonds after Matthew Barlow severed ties with Network and Developers knew of that severance. They claim that the Agreement did not cover those bonds and even if it did, they cannot be liable because of lack of consideration and failure of consideration. They also claim that even if they are liable, the amount of the award is improper. We are not persuaded.

To begin with, the Barlows argue that they agreed to indemnify Developers only with respect to bonds in which they had a specific and beneficial interest. In support, they rely on two provisions in the Agreement. The first states that indemnification is given "[i]n consideration of the execution and delivery by [Developers] of a Bond or any Bonds on behalf of [Network]." R., Vol. 1, pt. 1 at 278, ΒΆ 1. The second provides that "[Network] and Indemnitor ...


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